What Does It Mean to Have a High-Risk License?
A high risk licence is a photographic licence provided to someone who has been authorised to work in a high-risk industry. A high-risk merchant account is one that a payment processor assigns to a company that has a higher risk of fraud and chargebacks. Payment processors make this decision based on variables such as the business’s nature, financial history, and geography.
A payment processing company must receive a number of certifications and licences in order to be able to accept payments.
To begin, you’ll need to build partnerships with an acquirer and the processors that it supports. Second, you must register with credit card organisations (Visa, MasterCard, etc.).
The global economy is increasing as a result of all industries working together to accomplish a single goal: the maximum number of transactions with the highest possible income (which is directly proportional to the number of sales).
To engage out regulated financial service activities and offer credit to customers, firms and individuals must be authorised by the Financial Conduct Authority ( FCA ).
However, the equation is not as straightforward as it appears. Customers, businesses, and financial institutions cannot collaborate if they are not receiving the value for which they are paying.
Because banking institutions bear the risk of processing online payments and because it costs them money, they aim to keep it as low as feasible. As a result, they divide businesses into three risk categories: low, medium, and high. Because they carry huge risk for all three parties, high-risk enterprises are the least likely to get an account with the bulk of acquirers.
To be approved to perform a controlled function, you must first convince the FCA that you can fulfil and maintain the approval standards (the Fit and Proper Test FCA), and then you must.
perform that controlled function in accordance with a set of standards (the Approved Persons’ Statements of Principle and Code of Practice (APER))
How Long Does FCA Approval Take?
It takes between 6 to 12 months to become FCA approved. The timeline is determined by how soon the major FCA application forms and accompanying papers (such as a business plan and financial predictions) are collected, as well as how long it takes to assign an FCA case officer.
What is the difference between PRA and FCA?
Although we work closely with the FCA Opens in a new window on some issues/firms, the PRA and the FCA are two independent institutions. The fundamental distinction is that the FCA works with businesses to ensure that customers are treated fairly.
Why is the FCA important?
The FCA is also in charge of encouraging effective competition, ensuring that key markets operate smoothly, and regulating the behaviour of all financial services firms. This involves taking steps to avoid market exploitation and ensuring that financial firms provide consumers with a fair bargain.