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, plus most cases cost effective, source is from a 3rd party merchant account provider.
A high risk merchant credit card is required by businesses that, when compared to a ‘traditional’ goods/services business, close to a higher risk of:
Bankruptcy
Fraudulent Transactions
High lots 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 illegal in some jurisdictions.
merchant account for online pharmacy Credit file – Some providers will not accept merchants with poor or no credit track record.
Due to the high risk classification, most banks will not provide an account provider to those invoved with a high-risk industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some vacation providers offer their services to both general merchants and precarious merchants.
Merchant account providers that have been developed to service perilous merchants will probably provide a higher level of fraud protection, with a purpose to decrease the cost their merchants incur. However, in order to cover the more fantastic range of risk, rates for virtually any high risk merchant account will definitely be higher than their lower risk counter-parts.
When hunting for a high risk merchant account, there are many factors that you should take into account. Rates will be one of the most basic factors, this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. Then you will need to take into account fraud protection, customer service and reporting available you r as a merchant.
