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there are many ways of load balancing chargebacks below the allowable threshold. ;) there is also rolling reserves to help prevent the processor from holding t

• PeterisP 10y ago
  You definitely can make money from risky merchants. However, the policies, processes, partner selection, pricing and marketing required to do that well are very different, and sometimes entirely opposite, from what you need to serve the normal businesses well and with low expenses. If you're focusing on the general market, then all your internal business is ill-suited for doing that, and if you target the "risky markets" then you'll be ill-suited for handling the normal markets because e.g. you'll not be able to get as cheap deals (or any deals) from various institutional partners. Your comment about load-balancing chargebacks below an arbitrary "threshold" is a prime example of behavior which (or suspicion of which) alone would make some institutions to not deal with you, because gaming that threshold is costing them real money that is comparable or in excess of the fees they can earn from you. If you can get and maintain a better reputation, then it directly translates to lower rates you can get, so a larger profit margin and/or more competitive prices for your customers.