Who Needs a High Risk Merchant Account?
Merchant accounts are required in order for a business to accept credit card payments. As a merchant, there are two places you can obtain a merchant account; a bank, or a third party provider. For online merchants the most popular, so in most cases cost effective, source is from an additional party merchant account issuer.
A high risk processing account is required by businesses that, when compared with ‘traditional’ goods/services business, are at a higher risk of:
Bankruptcy
Fraudulent Transactions
High quantity of sales
High rate of refunds
high risk pharmacy merchant account rate of charge-backs
Other reasons a merchant may be categorized like a high risk are:
Merchants Location – Some merchant account providers will not accept merchants from certain countries.
The Product/Service the merchant sells is unlawful in some jurisdictions.
Merchant Credit history – Some providers will not accept merchants with poor or no credit foundation.
Due towards the high risk classification, most banks will not provide business relationship to those in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). As such some vendor providers offer their services to both general merchants and heavy chance merchants.
Merchant account providers that have been developed to service precarious merchants will probably provide to the next stage of fraud protection, you will notice that decrease the price of their merchants incur. However, in order to cover the more fantastic range of risk, rates for virtually any high risk merchant account will possibly be higher than their lower risk counter-parts.
When hunting for a high risk merchant account, there many factors that you should take into consideration. Rates will be one of the most important factors, this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You’ll need to take into account fraud protection, customer service and reporting available you as a merchant.
