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Spotlight Innovators

requirements and how to guide a specialty merchant through a more stringent application and boarding process. “It’s
important that sales representatives understand all of the risk types so they can evaluate up front what the process for
boarding the account will be,” continued Garcia. “A good rule of thumb is to consider any factors that have the potential
for falling into a greater reputational or transactional risk profile in the eyes of the processor.”

Reputational risk, which is often a result of controversial news, the current political climate or some social stance around
a product or business type, has impact on the application review process. How a business presents itself and openly
manages reputational conflict, as well as its longevity and independent reputation in the marketplace, are all key factors
when analyzing whether the account has any additional boarding factors. Firearms, adult entertainment and even tobacco
fall into this type of MCC category.

The other type of risk is directly associated with the merchant’s payment account activity. Industries, products and
selling methods that have historically produced higher percentages of chargebacks and/or disputes require additional
scrutiny and reinforcement during underwriting. In this case, the account will generally require an additional layer of
chargeback mitigation and fraud prevention tools to manage these vulnerabilities and qualify the account. Some examples
include: subscription services, businesses that offer recurring billing models, and card-not-present accounts with monthly
transaction volumes over $50,000. In some risk cases, the card brands also require a specialty merchant to register with
them. For example, an adult online content streaming company must register with all the card brands as a restricted MCC
merchant, but merchants selling cigars online are only required to register with one of the card brands. Knowing when
this registration requirement applies enables sales professionals to inform the merchant early on where they stand.

Straight to “GO”
One of the toughest calls when supporting restricted MCC/specialty merchant accounts on the sales side is selecting a
processor that can be trusted to assess the application fairly. It is important to know how to guide the merchant, application
and account through the mitigation process as efficiently and professionally as possible. Humboldt Merchant Services has
decades of experience and has demonstrated thought leadership when it comes to supporting restricted MCC/specialty
merchant business. As a result, Humboldt has become known as a safe harbor for merchants selling legal products that
also have reputational risk. Certain banks and acquirers have made the business decision to prohibit these businesses,
but Humboldt has built a sound reputation on expertly evaluating these accounts and taking worthy applications all the
way to the finish line.

“We’ve made it our primary business to understand and manage transactional and reputation account mitigation better
than anyone in the business, and we will work with a merchant to establish the tools they need to help mitigate, monitor and
recognize their own vulnerabilities,” Garcia assures. Humboldt also helps sales partners recognize businesses considered
by the card brands as a restricted MCC, but which also process “clean transactions,” meaning they do not carry unusually
high chargeback or dispute ratios. Some of these accounts are required to register with the card brands, but Humboldt has
the training expertise to help its sales partners know when this is necessary, how to submit the registration addendums
and when to assist with tools that scrub unwanted transactions out of their systems before they reach the settlement stage.

“It’s tremendously important that merchants and sales professionals understand the commonalities and where
the miscoding pitfalls are,” Garcia adds. “Business owners get solicited on a daily basis for merchant processing,
and uneducated sales representatives can make the boarding process even more difficult for them by miscoding or
misclassifying specialty merchant accounts.”

Garcia urges sales partners to contact the Humboldt support team and consider them business partners. The team can
share which documents are required and where to submit them, and they can help set expectations up front for merchants
regarding the process and turnaround time.

“Sales support on a restricted MCC portfolio is not as intimidating as it may seem,” concluded Garcia. “It sim-
ply takes a little knowledge, a strong team that understands the landscape, and people willing to take the time to
guide merchants through the process step-by-step.”

For more information on becoming a Humboldt Merchant Services sales partner and to learn more about the
Humboldt thought-leading business model, please visit the Humboldt Merchant Services website or contact the
team directly at 877-387-5642.

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