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Spotlight Innovators

or over two decades Humboldt Merchant Services
has been the premier provider of credit card pro-
cessing solutions for high-risk or hard-to-place
F merchants, offering competitive pricing and first
class service. Combining dedication with knowledge and a
primary focus on customer satisfaction, HBMS has grown
to become a leader in the credit card processing industry.
Offering superior processing, and the latest in payment
acceptance solutions, we are at the forefront of innovative
payment thinking.

What’s New:
Understanding specialty merchant selling

any sales representatives in the payments industry overlook merchants that can be difficult to board, com-
pletely missing out on a viable opportunity to expand their portfolio and residual income. In many cases,
this scenario occurs simply because there is a lack of knowledge about what makes a merchant’s business
M model more difficult to underwrite and how to go about qualifying a merchant that doesn’t fit into the low-
risk mold. Additionally, if the sales professional doesn’t already have a relationship in place with a reputable merchant
services provider that concentrates on managing restricted MCC/specialty merchant accounts and providing additional
underwriting reinforcement, it can be tough for them to know where to turn when an opportunity arises.
A fair chance for all

Many merchants with legitimate business types that require extra application review and attention are often left to fend
for themselves. This can leave them with sub-par merchant services providers and very high rates just to be able to accept
payments electronically. When a merchant in a restricted MCC bracket finally connects with a mainstream payments
advisor who is familiar with the merchant services risk landscape, it is generally well appreciated. Hence, payments
representatives who provide specialty merchants with affordable alternatives through a well-regarded specialty provider
can establish long-lasting relationships with successful businesses.

“Many sales representatives are not pursuing out-of-box merchant types due to a preconceived belief they cannot be
boarded or supported, yet there is tremendous opportunity in the specialty merchant market when a representative
knows how to recognize, evaluate and place these accounts,” said Leonard Garcia, vice president of sales at Humboldt
Merchant Services.
Know your merchant codes
According to Garcia, there are many business types that are legitimate but also fall into risk brackets deemed by the card
brands as needing added review and risk oversight. “A restricted MCC account isn’t necessarily bad. It just means there
can be a higher probability of risk, which translates into additional handling and mitigation,” counseled Garcia. The key
to supporting this merchant bracket is learning which businesses can be boarded under the card brand mitigated risk
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
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