High Risk Experts LLC

Merchant Account for GOLD & SILVER COINS, Precious Metals COLLECTIBLES

What is collectible?

Certain items like antiques, rare toys, coins etc. possess more worth than its original value because of popular demand. These offer a good investment avenue. Collectibles can be sold at a huge profit when the investor patiently waits for a few years. Normally these items are produced in limited edition and are not widely available. Gold, silver coins and precious metals have been most sought-after collectibles owing to their huge value.

People get into this as it is an enjoyable investment. The collectibles are a source of pride too. All the other assets that people accumulate may last for a short period. Gadgets become obsolete due to fast-moving technology. Cars, utensils, etc. last only for a few years. Collectibles are long-lasting. These do not wear out. The older they are, the more value they accumulate.

The gold, silver and precious metal collectibles is a global market. Online trading is also done in large volumes these days. The perspective of collectibles dealers is completely different from that of individual collectors. Dealers do not hold the goods for a long duration. In order to make a profit during the short term holding, the dealers sell these at premium prices.

Why do precious metals collectibles business need a merchant account?

In order to enjoy the advantage of E-commerce and website selling these businesses definitely need an online merchant account. Customer base can be enlarged by introducing iPhone/Droid Mobile Apps for selling the collectibles. Only when a merchant account is opened the buyers will be able to make payments using Visa/Mastercard/Discover/Amex cards. The business can have a virtual terminal in addition to physical showrooms. The merchant account offered by various banks ensures fast payment processing. They provide additional services like recurring billing, check drafting, ACH Processing/Check Processing, etc. The customers can simply make their orders in the terminals and make the payment using the gateway setup.

What are the present challenges of opening a merchant account:

For normal risk-free client profiles, the banks provide various offers like the following:

1. No rolling reserve requirement.

2. Low fees and rates

3. No setup fees

4. No application fees

5. Quick billing cycle

6. Simple application process without delay

Besides the friendly attitude of banks, the low-risk category profiles enjoy low underwriting premium from multiple underwriting banks. But a high-risk profile client like precious metal collectible seller can never get any of the above benefits.

Silver, gold and precious metals collectible merchant accounts are treated as very high-risk clients due to the following reasons:

1. The industry faces high risk from forgeries. The forged goods evade even the most experienced appraiser.

2. Verifying the authenticity and legality of the seller is very tough. Even reputed dealers engage in banned collectibles in all categories.

3. The income from sale proceeds of precious metal collectibles is taxed at very high rates. This makes the profit margin very thin.

4. In a few nations, the online platform is not regulated. This creates a lot of financial and legal issues.

5. The inventory involves huge maintenance cost.

6. This industry is wrongly misunderstood as mafia business in a few societies. Hence the high risk of banning is faced frequently. The associated risk with the card not present and chargeback disputes involve huge amounts.

7. The inventory does not enjoy market readily available to buy. Converting the goods to money takes considerable time. Liquidity is very poor.

Though the precious metal collectibles are coupled with a huge fortune, the industry faces the following concern points:

1. Huge risk and cost involved in safeguarding the inventory.

2. When not maintained in good condition, any deterioration may depreciate their value. Most small players may not be aware of this surprising fact.

3. When this industry grows it severely impacts the economy. Hence the governments try to indulge in curbing activities. Such measures during the peak climb of the market can result in the unimaginable quantum of loss.

4. Huge fluctuation in prices that reflects across global markets.

5. The market is dominated by a handful of powerful players. Hence entry for small players is tough.

This does not boost the economy and create jobs like other businesses. Governments do not support this market. Hence legal regulations always aim at discouraging and restricting the business activities related to precious metals collectibles.

When the context of high-risk vs low risk arises, the banks prefer a low-risk client. The merchant account applications of precious metal collectibles are Denied/Shutoff/Closed by Other Credit Card Processors like First Data, Paypal, Square, Stripe.

Startups:

When the precious metal collectible is a start-up business it becomes even tough. Any startup business will naturally not have historical data. Unfortunately for the merchant accounts rates Vary by Startup vs History. The underwriters insist for at least three years of data. Underwriting for clients without data is risky for the underwriting banks. They would be reluctant to do this even for a high premium. They reject startup merchant account applications as a matter of policy.

In spite of all the above difficulties, there are a few banks which offer excellent merchant services for the precious metals collectibles.

Domestic and offshore merchant accounts for collectibles

:

Getting an offshore merchant account is much easier for collectibles. Domestic acquirers have a low-risk appetite. Hence the chances of rejecting the merchant account application are high.

Few countries which play a leading role in precious metal market implement lighter legal regulations for the collection industry too. Hence the under-writing banks located in such countries do not face many restrictive guidelines. It is possible for them to render services to collectibles at a low premium. Hence opening a merchant account with an offshore acquirer involves an easy process. The charges of an offshore acquirer would be reasonable. The client can enjoy other related benefits like low tax rate, fast payment collection etc.

Technically speaking the acquirer should have good compatibility and strength to handle a huge volume of financial data without delay. Since any subsequent closure can result in a substantial loss, the precious metal collectibles business should choose the right acquirer in the start itself.