Who Needs a High Risk Merchant Account?

Merchant accounts are needed 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, with the most cases cost effective, source is from a third party merchant account issuer.

A high risk merchant account is required by businesses that, when compared into a ‘traditional’ goods/services business, close to a higher risk of:

Bankruptcy

Fraudulent Transactions

High volume of sales

High rate of refunds

High rate of charge-backs

Other reasons a merchant may be categorized to be a high risk are:

Merchants Location – Some merchant account providers won’t accept merchants from certain countries.

The Product/Service the merchant sells is prohibited in some jurisdictions.

Merchant Credit file – Some providers won’t accept merchants with poor or no credit history.

Due towards the high risk classification, most banks won’t provide a merchant account to those in a high-risk industry (such as adult entertainment, replica goods, pharmacy merchant account payment gateway etc). For this reason some outside providers offer their services to both general merchants and precarious merchants.

Merchant account providers of developed to service high risk merchants will most likely provide the next step of fraud protection, you will notice that decrease charge their merchants incur. However, in order to cover the more fantastic range of risk, rates with a high risk merchant account will definitely be higher than their lower risk counter-parts.

When looking for a high risk merchant account, there are several factors if you want to take into consideration. Rates will be one very sound factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You’ll need to contemplate fraud protection, customer service and reporting available you as a merchant.