With more businesses accepting Bitcoin as payment for various products and services, cryptocurrency has become widely accepted as having real-world value. And to make it even more enticing for people, merchants have developed ways to make Bitcoin mining more accessible to those hoping to use the digital currency.
But of course, to use those services, individuals would have to pay. The only problem is that Bitcoin mining merchants fall under the high-risk category, making merchant accounts inaccessible to most of those who operate in the industry.
Digital payments don’t just happen. To be able to accept cashless transactions, businesses need what’s called a merchant account. Granted by merchant acquiring banks, these accounts work to facilitate cashless payments.
But conventional banks are conservative by nature, which means they’ll shy away from partnerships that are likely to cause losses. And that’s why some merchants fall into the ‘high-risk category.
Essentially, a high-risk merchant is one that banks perceive as having a significant predisposition to fraud and chargebacks. For the most part, financial service providers hiss as chargebacks because they cost money for everyone involved in the transaction.
Not wanting to work with businesses with a higher risk of chargebacks, banks categorize merchants intending to open a merchant account based on their potential risk. They assess applications based on a number of factors and calculate just how much of a liability they might become.
That said, opening a high-risk merchant account has become a struggle itself, leading high-risk merchants down a dark, dreary path of waiting, frustration, and rejection.
Cryptocurrency in general tends to get the side eye from traditional financial institutions. Identified as having significantly high risk, Bitcoin mining merchants often struggle to get approval from merchant acquirers. And they have their fair share of logical reasons for barring these businesses from accessing cashless payments.
Despite being quite a widespread currency, Bitcoin isn’t as well regulated as an actual, real-world currency. There aren’t any real laws that govern its use, sale, and storage. This makes it the ideal channel for all sorts of illegal activity.
From money laundering to the trade of illicit products and services, businesses involved in Bitcoin find themselves in a vacuum with limited regulations that control violations of the law.
And wherever there’s a potential for litigation, banks, and conservative financial service providers won’t dabble.
There’s a reason why furniture merchants, apparel brands, and grocery stores fall into the low-risk category. The presence of real, physical products makes it easy to detect order and transaction fulfillment.
That means you can tell if the business has satisfactorily completed a transaction because the buyer would be in possession of a real, tangible product. In the case of Bitcoin mining merchants, everything happens on the internet with digital products.
Without any real items being traded through the platform, the entire operation becomes susceptible to fraud. And when customers feel like they’ve been conned out of their money, you best believe they’re filing a chargeback.
The whole point of a merchant account is that it lets people pay without cash. In-store, that happens by way of point-of-sales terminals. So buyers simply swipe their card through the terminal and their card gets charged for payment.
It doesn’t happen quite the same way online, though. Since merchants can’t swipe a physical card through a terminal when customers shop through the web, they’d have to facilitate a card-not-present transaction. This allows businesses to take card payments even without having a physical card in hand.
The problem here is that card-not-present transactions open the gates to fraud. Anyone can steal card information and use them to pay for services and products online. And when the actual cardholder discovers the unauthorized transaction, they’re going to want their money back.
Yes, despite all the challenges, it’s still possible. In fact, you could even open up a high-risk Bitcoin mining merchant account with a conventional merchant acquiring bank, but not without a few strings attached.
For instance, to offset the risk, banks would likely impose steep penalties and strict contract stipulations that force merchants to make payments on the slightest indication of chargebacks. They may also require unreasonable rolling reserve terms that sap most of your revenue.
On top of that, these acquirers can stifle payouts. That means you can only get your hands on credit and debit card payments months after the transactions are completed. This makes sure that the banks won’t have to worry about you failing to make payments on chargebacks.
Fortunately for high-risk Bitcoin mining merchants, banks and traditional financial service providers aren’t the only options. And that’s where Shark Processing comes in.
It’s tough to fight for approval when you’re up against strict, conservative merchant acquirers. But with Shark Processing, you won’t have to. Our team of merchant specialists champions your business and advocates to find you the perfect merchant acquirer to provide your high-risk Bitcoin mining merchant account.
We connect our clients with a wide network of trusted, reputable merchant account providers that openly and willingly accept the unique challenges of working with high-risk merchants — with no strings attached.
Skip the long waits, forget the frustration, and quit worrying about approval that might never come — at Shark Processing, we make a high-risk merchant accounts easy and safe, regardless of the risk.
Contact us today to find out how we can step in and help you get approval in as little as 24 hours, or send in your pre-application form today to get started on your high-risk Bitcoin mining merchant account.