High-risk merchant services are integral to industries but are more susceptible to chargebacks, frauds, regulatory scrutiny, and businesses processing high-ticket items. Payment processors like Host Merchant Services and High-Risk Pay cater to these industries to facilitate secured transactions via point-of-sale or virtual and online payments.
Both companies are focused on facilitating automated clearing house (ACH) and eCheck transfers, which are suitable for medium- and large-scale businesses. They also offer advanced fraud detection and chargeback management.
Even though High-Risk Pay specializes in high-risk industries only, its services compete with Host Merchant Services. Host Merchant Services takes a step further by offering better solutions for the high-risk sector and doubling down to the general industry.
So, which payment partner is right for your business? Which option justifies the amount they are charging? This article will compare both providers’ features, services, and pricing to help you evaluate and select the right one according to your business’s needs. Let’s start with High-Risk Pay!
An Overview of High-Risk Pay
Founded in 1997, High Risk is a financial services company headquartered in Ladera Ranch, California. High-Risk Pay provides payment processing and merchant account solutions to businesses with a “high-risk” label only. These merchants are often deemed as “risky” by the banks and other financial providers based on chargebacks by the customers, reputation of the industry, credit history, and ticket value of the items the businesses are selling.
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The company claims 99% approval rates for merchants across different high-risk merchant category codes, with swift approval within 24-48 hours of the application submission. This makes it an attractive option to secure a merchant account for merchants in industries like online gaming, adult entertainment, dating platforms, travel, nutraceuticals, and subscription-based services.
From their roster of products and services, highlights include terminals and payment gateways, chargeback and fraud management, ACH processing, eCheck processing, mobile payment processing, and credit card processing.
High-Risk pay promises zero setup costs, no contracts, and no cancellation fees if you want to switch. It’s a good option for high-risk merchants who don’t like to be bound by long contracts and are looking for a fast, affordable setup to run the business off the ground.
Pros and Cons of High-Risk Pay
Pros
- Has A+ rating on BBB with zero complaints.
- With a 99% approval rate, it’s a great and reliable option for high-risk businesses facing rejections from popular processors like PayPal and Square.
- Offers 24/7 customer support option, which is needed for online businesses and retail stores working round the clock.
- With the guarantee of “instant approval,” you can set up and accept payments as fast as 24-48 hours.
- Your business can accept a wide range of payments, which includes credit, debit card, ACH and eCheck transfers, and digital wallets (like Apple Pay).
Cons
- Processing fees, although competitive within the industries it competes in, are high.
- Important contract and pricing terms are not disclosed on the website.
An Overview of Host Merchant Services
Host Merchant Services is a leaner, transparent, modernized, and advanced counterpart of High-Risk Pay. Founded in 2010 by Lou Honick, who is an entrepreneur with a strong background in the hosting industry dating back to 1997 when he first founded HostMySite.com.
Established in Newark, Delaware, Host Merchant Services is a registered Independent Sales Organization (ISO) with Visa (US) and MasterCard (International) with bank sponsorships from Wells Fargo Bank, Walnut Creek, CA.
The company, too, offers merchant accounts and payment processing solutions specifically targeting small and medium-scale businesses across different industries like retail, restaurants, e-commerce, and other high-risk sectors.
Host Merchant Services stands tall from competitors like High Risk by offering transparent pricing, commendable and fast customer support, and innovative payment solutions. Key products and services include payment gateways and terminals, point-of-sale systems, merchant services, payment processing, eCommerce and mobile processing, EBT payment processing (SNAP), merchant cash advance, and QuickBooks integration, among others.
Pros and Cons of Host Merchant Services
Pros
- Host Merchant Services also has an A+ rating with zero complaints on BBB.
- Uses an exclusive interchange-plus pricing model.
- It’s a transparent and cheaper option for businesses processing more than $10,000.
- Host Merchant Services is known for flexible contracts with zero cancellation fees.
- Services catered to both general and high-risk industries. Level 1 is PCI-compliant and includes security features like tokenization and 3D secure.
- Zero PCI compliance charges are in contrast to High-Risk Pay, where the prices are not disclosed.
Cons
- Might not be a great option for businesses generating less than $10,000 in revenue due to the interchange pricing model.
- Limited to the US and Canadian businesses only.
Key Features of High-Risk Pay
- Payment Processing:
Specializing in high-risk payment handling, the company processes major debit and credit cards. High-Risk Pay extends its services to various industries including, but not limited to, eCommerce, eCigarettes, travel, adult businesses, MLM, CBD/hemp, travel, tech, non-profits, firearms, etc.
High Risk’s services cover payment gateway access, virtual terminals, mobile solutions, faster approval, eCommerce solutions, POS and card terminals, B2C and B2B payment processing, recurring billing, and data analytics.
- Chargeback Prevention:
Businesses can be stress-free, given that High Risk offers essential support to help companies to manage, prevent, and cover chargebacks. Chargebacks result from disputes raised by cardholders after the purchase without informing the merchant. The company aims to reduce losses and maintain the stability of the accounts for all high-risk businesses by proactively alerting merchants to address the ticket before it escalates.
- Fraud Prevention:
Offers necessary tools to safeguard transactions from fraudulent activities. The security measures set in place ensure safe and secure payment processing for both merchants and customers.
- ACH Processing:
High-Risk Pay offers ACH processing services that allow businesses to use their consumers’ routing and account numbers to make web check payments. This enables fast transfer of funds, which usually takes 24 to 48 hours for settlement, which assists the company’s cash flow and operating activities efficiency. It is important to note that ACH processing costs are usually charged a certain fee for each transaction, which is a good way because of the fixed costs associated with credit card payments, which are fees based on a percentage.
- Instant Approval:
High-Risk Pay claims to have a 99% acceptance rate for high-risk merchant accounts, ensuring businesses are functional within the shortest time possible. They do not charge any application and set-up fees, and no contracts are required. Applications are approved within 24 hours for those who have bad credit as well as for those who have good credit, and the package includes next-day funding.
Key Features of Host Merchant Services
Unlike High-Risk Pay, which offers limited basic features and focuses on only a few high-risk industries, like adult products and services, Host Merchant Services offers a suite of features designed to meet the needs of various business types across industries. Host Merchant Services provides all the standard facilities like eCheck, ACH transfers, fraud detection and prevention tools, and chargeback management, so we will focus beyond these below:
- Merchant Services and Payment Processing:
Host Merchant Services offers both merchant services and payment processing solutions. With merchant accounts, you get an exclusive interchange plus pricing model, which is a better option for both online and in-store. Plus, if you are a non-profit, you will get a chance to get better rates.
- Proprietary and Featured Payment Gateway Support:
HMSPay is the proprietary payment gateway for the Host Merchant. With this web-based system, businesses can accept all major credit and debit cards, ACH transfers, and eCheck payments, and it includes recurring billing, surcharging capability, and batch processing. This full virtual terminal also integrates with top carts like Magento, WooCommerce, and Shopify, as well as other CRM and ERMs. Additionally, HMSPay can handle level 3 transactions for businesses with high-ticket sales.
However, if you prefer a third-party payment gateway option, Host Merchant Services supports featured payment gateways like Transaction Express, Authorize.Net, and NMI.
- Payment Terminals:
With Host Merchant Services, you get the latest payment terminal tech from the top brands for NFC/EMV and other digital payments. Major line-ups include the Valor VL series, First Data FD series, Ingenico Desk and Move series, Pax A series, and Dejavoo Z series, among others.
If your business is processing over $20,000 in revenue during the sign-up process, you may qualify for at least one complimentary credit card terminal.
- Small Ticket Program:
It offers inclusive services catering to all circles, whether small, medium, or large-scale businesses. Payment processors often tend to ignore small businesses; keeping this in mind, Host Merchant Services launched the “Small Ticket Program” for companies with small ticket transactions – typically under $15.
Under this program, merchants are offered lower per-item fees. For Visa, 5 cents at an interchange rate of 1.6%. And for MasterCard, 4 cents at 1.55%. This saves significant transaction charges for merchants processing thousands of small ticket sales in a single day.
- Third-Party Integrations:
Compatible with major third-party software like Revel, Lightspeed Retail, TouchBistro, Braintree, NetSuite, QuickBooks, HostBill, etc – Host Merchant Services doesn’t hold you back if you want to customize your existing system for maximized potential. Host Merchant Services also does not force its proprietary products on the client, making it a more flexible choice than High-Risk Pay.
- POS Systems:
Bonsai is a proprietary POS system offered by Host Merchant Services. The system provides advanced tools in most modern systems, like labor management, sales analytics, inventory tracking, and online ordering capability. This POS system is designed for various industries and Host Merchant Services targets.
Apart from Bonsai, Host Merchant Services offers Clover and Vital POS systems. Top choices include Clover Station Solo, Clover Flex, Clover Mini, Vital Select E15, Vital Select X8, Vital Mobile C4 and C3.
- Merchant Cash Advance:
Host Merchant Services offers cash advances up to $500,000 for eligible customers. With a 90% approval rate, businesses can get themselves pre-qualified within 24 hours and access the funds in as little as 3-5 working days. For amounts up to $20,000, companies can experience even faster funding in as little as 48 hours.
Businesses are not bound to use funds in a specific manner; they can choose where to spend, whether it’s for managing payroll, purchasing new equipment, expanding operations, or hiring new staff.
Pricing of High-Risk Pay
High-Risk Pay offers merchant accounts tailored explicitly for businesses with varying credit standings; the same goes for how they price different companies. For example, their transaction fees for retail merchants with good credit start at 1.79% + $0.25 for every transaction (2.19% + $0.25 for keyed-in transactions), in contrast to 2.95% + $0.25 for high-risk businesses with bad credit history. A monthly fee of $9.95 is also charged with zero setup fees. Clients in specific business categories (like adult entertainment or international) may face an extra charge of $0.50 per transaction.
Other pricing terms are not disclosed on their website. Businesses have to reach out to High-Risk Pay for detailed pricing information.
Pricing of Host Merchant Services
As mentioned, Host Merchant Services extends its services to both high- and low-risk industries through interchange pricing models. This model is a cost-effective option for many businesses.
- For the retail transactions: Interchange + 0.25% + $0.10 per transaction.
- Restaurant Transactions: Interchange + 0.20% + $0.09 per transaction.
- E-commerce Transactions: Interchange + 0.35% + $0.10 per transaction.
Apart from the per transaction rates, Host Merchant Services charges businesses a monthly fee of $14.99. There is no setup or application fee. It is free of cost. With Host Merchant Services, you can also avoid PCI compliance fees, address verification fees, and PIN debit fees. The company offers next-day funding for all of its plans.
Additional costs that you could face include batch fees, voice authorization fees, payment gateway fees (optional), and annual reporting fees, which are $0.20 (per batch), $0.75, $5 (per month), and $24 (per year), respectively.
High-Risk Pay: Customer Support Options
HighRiskPay.com offers customer support through various channels to assist merchants with their payment processing needs, including a knowledge base and domestic phone number, which is available during business hours.
Merchants can reach out via email or phone for personalized assistance. Additionally, the company provides an online contact form for inquiries on its website.
Host Merchant Services: Customer Support Options
Host Merchant Services is dedicated to providing exceptional customer support to its clients. Merchants can access assistance through multiple channels, including:
- Phone Support: Available 24/7, ensuring that help is always just a call away.
- Email Support: Prompt responses to inquiries sent via email.
- Live Chat: Real-time assistance is available through their website’s live chat feature.
- Online Contact Form: Accessible on their website for submitting questions or concerns.
Host Merchant Services emphasizes quick and effective communication, with calls answered within three rings by a U.S.-based support person every time.
Which Is the Best Option for Your Business?
Host Merchant Services offers much more than High-Risk Pay. While High-Risk Pay provides basic features like payment processing, ACH and eCheck transfers, fraud, and chargeback management, Host Merchant Services takes the lead by offering solutions catering to today’s requirements of different industries. From advanced analytics, proprietary payment gateways, and POS systems to easy integration with third-party popular software and solutions like Clover, NMI, and QuickBooks – Host Merchant Services creates an ecosystem to adapt, grow, and maximize the potential for businesses looking to scale and be at the front of the competition.
In terms of pricing, again, Host Merchant Services is for the win, given the transparency provided by Host Merchant Services for every service on the roster. While monthly fees are slightly cheaper than High-Risk Pay, the difference is offset by the interchange pricing model offered by Host Merchant Services. Businesses with revenue of more than $10,000 can significantly dent payment processing charges.
In terms of the contract, both offer short-term “easy-to-cancel-at-zero-cost” flexibility, which is great for businesses not looking for any long-term commitments.
Conclusion
High-Risk Pay and Host Merchant Services offer essential payment processing solutions tailored to specific business needs. High-Risk Pay serves high-risk industries, offering swift approval and basic features like ACH, eCheck transfers, and fraud management. However, its services are less transparent, with limited third-party integrations and fewer advanced tools.
Host Merchant Services, on the other hand, provides a more comprehensive and modernized approach. With transparent interchange-plus pricing, robust third-party integrations, proprietary POS systems, and additional services like merchant cash advances, Host Merchant Services caters to a broader range of industries while maintaining flexibility for high-risk businesses. It also provides exceptional customer support and a transparent pricing structure, making it a more attractive option for companies seeking scalability and efficiency.
While High-Risk Pay may be suitable for businesses seeking a quick and straightforward setup, Host Merchant Services offers more excellent value, especially for businesses looking for advanced features, scalability, and transparent pricing.
Frequently Asked Questions
How do the pricing structures of High-Risk Pay and Host Merchant Services compare for high-risk businesses?
High-Risk Pay uses a flat rate starting at 2.95% + $0.25 per transaction with a $9.95 monthly fee, making it suitable for lower volumes. Host Merchant Services offers an interchange-plus model (e.g., interchange + 0.35% + $0.10 per transaction) with a $14.99 monthly fee, often more cost-effective for higher transaction volumes.
What are the differences in services and features between High-Risk Pay and Host Merchant Services?
High-Risk Pay focuses on high-risk merchant accounts, offering payment gateways, virtual terminals, and fraud prevention. Host Merchant Services provides a broader range, including proprietary POS systems, QuickBooks integration, and merchant cash advances, making it ideal for businesses seeking advanced tools and scalability.
How do High-Risk Pay and Host Merchant Services differ in contract flexibility and customer support?
Both providers offer flexible contracts with no long-term commitments or cancellation fees. Host Merchant Services excels in customer support with 24/7 U.S.-based representatives. High-Risk Pay also offers reliable support, though fewer details about availability are provided.
