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 3rd party merchant account organization.

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

Bankruptcy

Fraudulent Transactions

High amount 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 illegitimate in some jurisdictions.

merchant account providers for online pharmacy Credit record – Some providers won’t accept merchants with poor or no credit details.

Due towards the high risk classification, most banks won’t provide business relationship to those in a riskly industry (such as adult entertainment, replica goods, pharmacy etc). Because of this some other providers offer their services to both general merchants and heavy risk merchants.

Merchant account providers that have been developed to service perilous merchants will probably provide the next step of fraud protection, with a purpose to decrease the cost their merchants incur. However, in order to cover the advanced level of risk, rates high risk merchant account will be higher than their lower risk counter-parts.

When hunting for a high risk merchant account, there are a number of factors that you should take into account. Rates will be one of the biggest factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. Then you will need to look into fraud protection, customer service and reporting available for as a merchant.