August 23, 2022
by David Goodale
How to get approved to process high value transactions
(Slightly edited from video transcript for greater readability)
Hello, David at Merchant-Accounts.ca. Today I'm tackling a pretty simple topic, what to do if you need to process transactions for big-ticket items and you're not getting approved. Think amounts approximating $20,000 per transaction or even greater but you're not getting approved to process those amounts. Stay tuned, I'll tell you how to do it in one second.
The problem with large transactions is a chargeback risk
There are a lot of legitimate businesses that sell very large ticket items. If you process large transactions, the reason why it may be hard to get approved to do that is the payment processor is worried that something may go wrong.
If a merchant is doing meal delivery and it's a $20 or a $50 transaction, and there's a dispute, it's only $50 at risk. However, if a merchant is selling Rolex watches and it's a $20,000 or $30,000 transaction, if there's a dispute, that is a substantial risk. If the merchant is unable to return the funds to the cardholder, it doesn't matter, the payment processor is still on the hook for the money. In this scenario, I'm describing the concept of chargeback risk. I have other content about chargeback risk on the channel and our website. The point being the payment processor is worried about a dispute.
How to get your transaction limit approved
If you need your transaction limit increased for large transactions, you need to provide evidence that there won't be a dispute. First of all, communicate well with your payment processor. Hopefully, you have a payment processor that you have a relationship with. You can speak to the folks at risk whenever there's an issue and they get to know you.
Then what you're going to communicate to the merchant is something like this:"I have these large ticket value transactions I want to process from a return customer. They've purchased from me several times before. I saw them in person recently and now they're about to buy this Rolex watch. They've decided to go ahead with the purchase and I'm ready to ship it out."
This is just a made-up example, but you can tell what you're supposed to do is explain to the payment processor in plain English, why there won't be a dispute.
You should take these concepts and apply them to your business. Are they return customers? If they're not returning customers, how do you know they're legitimate? You don't want to process a large transaction for multiple thousands of dollars and then get hit with the chargeback.
What are you doing to help prevent a chargeback? Are you, for example doing a Google meet every time you're doing a big transaction? Maybe you video call the customer to see the person's face and you're getting them to hold their ID up to the camera.
If you can say to the payment processor, I've done a video interview, they validated their ID for me, we've had three conversations and they're going ahead. That should give the processor some confidence. If you need your transaction limit increased, you can explain to the payment processor what you're doing and why it won't be a problem.
In general, it's not impossible to be approved for large tickets, but you need to have controls in place to protect both your business, and the payment processor. I hope that you now have a plan of action that you will implement to increase your transaction limit. You should communicate with your processor and actively try to prevent fraud. If you have a good payment processor, they should help you. If they won't, I hope you talk to us at Merchant-Accounts.ca. I hope you found this video helpful. Thanks for watching and have a great day. Bye now.
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