Certain high-risk industries are expected to boom in 2022. Much of the rise stems from a decline in the past few years.
Merchants looking to open up in these high-risk industries need to buckle down to keep their businesses up and running.
What is a High-Risk Industry in Banking?
Risk is measured by the likelihood of a high chargeback-to-transaction ratio. Fraud, average revenue, and other factors influence a business’s or industry’s chargeback rate. You can ask yourself a few questions to determine your business’s risk level.
Most financial institutions are not willing to work with high risk merchants unless they have the specific tools and knowledge. High-risk credit card processors like Revitpay help businesses lower chargeback rates and further decrease their risk levels.
The predicted industries to grow this year happen to be made up of high-risk sectors.
Which High-Risk Industries are Expected to Grow in 2022
Travel
The travel industry has a large number of sectors – most are expected to grow in the next few years. Travel businesses are the top industry that will see this revenue growth.
Revenue for some travel sectors are predicted to grow nearly 50%. However, this increase catches 2022 stats up to 2019 and 2020.
International and domestic travel becomes open as airlines and governments relax pandemic restrictions.
Some of the largest sectors expected to boom:
- Airports/airlines
- Hotels and resorts (lodging)
- Travel agencies
- Tourism
- Cruises
- Travel Insurance
Why are these industries high-risk?
Emergencies such as the pandemic proved how hard the travel industry gets hit by global change. The industry is unable to provide lodging, flights, and transportation for a large population that is not traveling.
Other external factors like weather contribute to a high risk of chargebacks as customers look to get their money back from cancellations.
The travel industry sells high-ticket items that cost more than a general transaction. The more an order costs, the bigger the chargeback if there is one.
The travel industry needs payment processing and other risk-reducing tools to catch on to this wave of growth. Entertainment and Recreation
Along with travel comes the world of entertainment. Performers and theaters look to a bigger audience than in the previous couple of years. Like travel, this industry would be growing as a rebound from revenue decrease.
Recreational destinations such as water parks rely on the travel industry to succeed. As the travel industry goes big, so does the recreational industry.
Why are these industries high-risk?
Entertainment and recreation have found ways to migrate online where the majority of their audience is. The transition is not transferable for most businesses in this industry, however. This leads to the loss of show tickets and passes, which can be expensive, resulting in hefty chargebacks.
Are You a High-Risk Business?
If you’re in the travel or recreation industry, then you are considered a high-risk business. However, many other industries and companies also get turned down from merchant accounts due to their risk level. Revitpay can provide merchant services with specialized attention to the unique problems your business faces.