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Texas Laws About High-Risk Merchant Accounts

High-Risk Merchant Laws in Texas

Everything’s bigger in Texas, so they say, and that includes the opportunity to start a successful business. As one of the best states for startups, Texas offers the perfect environment for entrepreneurship, from its favorable geographic location to its deep talent pool and amiable tax benefits.But like any other state in America, the financial institutions in Texas are also critical of businesses that are tagged as high-risk merchants. Now, if you’re one of those who are looking to start your business in the Lone Star State, you should understand the laws about high-risk merchant accounts, fees, and what to look for in a merchant service provider.

Local Payment Processing Laws in Texas

Before you can apply for a high-risk merchant account, you have to be familiar with local payment processing laws first. Texas follows most of the same rules as the other states in the country; however, a few years ago, the State overturned its law banning surcharges for credit card payments. This means that if you’re a merchant, you can now charge customers a swipe fee if they choose to pay using their credit cards.

Although this has been frowned upon by customers because it’s an additional expense for them, you can actually make things work by encouraging them to pay in cash, check, or prepaid card instead so they can get a discount or additional loyalty points. This way, you get to reduce potential chargebacks while keeping the loyalty of your customers.

High-Risk Merchant Account Fees

When you’re a high-risk merchant in Texas, you can expect to have limited options when it comes to payment processing fees. But that doesn’t mean that you shouldn’t look for the best deal for your business. Pricing will vary depending on how you conduct business and the risks associated with it. For instance, you could expect to pay a bigger processing fee if you’re purely dealing with online transactions because the risks are higher.You should also learn about transaction limits, higher rates, and reserve requirements so you know exactly what plan and provider would fit your business best.

Research Merchant Service Providers

Whether you live in Texas or not, it’s very important to find the right credit card processor to offer you a high-risk merchant account. To make sure that you will get the best value from this investment, it’s important to do some research on different providers before deciding on the right one.

Start by visiting their websites and reading reviews. You should also ask around for recommendations from other merchants within your industry. Of course, it’s essential to read contracts and review them with an attorney to determine if it works for your business or not.

Texas is definitely one of the best states in the country to start a business. So don’t waste the opportunity to be one of its successful startups by making sure that you follow the rules as a high-risk merchant. In due time and with good performance, you’ll surely enjoy more privileges as a company, especially with payment processing.

Contact us to learn more regarding the Texas laws about high-merchant accounts.

( Merchant Account Specialist )

Mitchell Fardell is a highly experienced payment processor who has worked for First Card Payments since 2019. In that time, he has worked on large accounts, small accounts, and everything in between.

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