Startups are always challenging, especially in high-risk industries. To successfully get such a business off the ground and avoid the various risks and pitfalls that tend to crash most other startups, one should make good use of the various innovative fintech solutions out there, especially where payment processing is concerned.
Modern payment processors designed for businesses and startups in high-risk industries offer a lot of innovative solutions that are so helpful for new businesses and are outright must-haves if a startup is to succeed.
5 Ways Innovative Payment Platforms Can Help High-Risk Startups
If you take a look at Paycompass.com or another similar payment processor specializing in working with businesses in high-risk industries, you’ll quickly find out the various ways in which such a solution can help a high-risk startup.
1. Protect Sensitive Payment Data
An innovative payment processor will utilize new and effective methods to protect the sensitive data of your customers. These include innovative encryption methods, tokenization technology, multi-factor authentication (MFA), and more.
For example, tokenization replaces the credit card details of customers within the system with unique tokens, which ensures that no sensitive information is stored on local servers that can be hacked into. Encryption, on the other hand, encrypts the data while it is in transmission, which makes it unreadable to anyone outside of the authorized users.
A proper payment processor for a high-risk startup will also be compliant with the Payment Card Industry Data Security Standard (PCI DSS) and will take all the necessary steps outlined by that standard.
2. Improve Customer Trust
Customers are very sensitive when it comes to fraud, transaction speed, ease-of-use, and stolen data, and other quality-of-life features or issues payment processors can have or deal with. As such, the right innovative and effective high-risk payment processor is excellent at improving customer trust and retention.
3. Employ Real-Time Fraud Detection and Prevention
Fraud is an ever-present danger in high-risk industries, especially so for startups. Hackers and fraudsters are in a never-ending “arms race” with payment processors to develop new ways to steal or protect the data and money of the customers of high-risk businesses.
This is exactly why it is crucial to use an innovative payment processor that keeps their fraud detection and prevention tools and algorithms up to date. Proper fraud detection doesn’t just save your business money, it is also key for customer satisfaction and retention, brand building, and general stability.
4. Scale and Grow Business Effectively
A startup needs to be able to scale and be free to grow by definition. What’s more, the software tools and payment processors that startup uses shouldn’t constrain that growth in any way but should be able to stimulate it and make it more effective. Unfortunately, many older payment systems aren’t quite scalable, meaning that they don’t handle rapid increases in traffic very well, leading to slowdowns or even crashes.
This can be very hampering for any business that’s looking to grow by using promotions, seasonal discounts, and other similar and effective marketing tools and strategies. Fortunately, there are innovative cloud-based payment solutions for high-risk businesses that are incredibly scalable and are excellent at promoting effective and efficient business growth.
5. Manage and Reduce Chargebacks
Similarly to dealing with fraud, a modern and innovative payment processor will have various tools and algorithms for detecting, preventing, and dealing with chargebacks. This is essential both for reducing the number of chargebacks your high-risk startup has to deal with dealing with the ones that happen in the quickest and most efficient way possible.
Chargebacks can have a nasty bleeding effect on any business and can be especially detrimental to a startup. What’s worse, a large number of chargebacks can lead to account shutdowns or issues with your bank, so, a good payment processor that knows how to deal with them is essential.
The payment processing landscapes changes every few months, but that doesn’t mean a high-risk business should change the payment processor they use every few months too. What it means, however, is that using a payment processor that isn’t constantly innovating and making efforts to constantly stay at the top of the game and up to date with all new trends is at best ineffective and at worst a security risk and a potential startup-breaker.
