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 with ‘traditional’ goods/services business, was at 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 being 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 Credit report – Some providers will not accept merchants with poor or no credit account.
Due to the high risk classification, most banks won’t provide a forex account to those involved with a riskly industry (such as adult entertainment, replica goods, pharmacy merchant account payment gateway etc). Because of this some outside providers offer their services to both general merchants and heavy chance merchants.
Merchant account providers that happen to be developed to service perilous merchants will broadly speaking provide to the next stage of fraud protection, so as to decrease the price of their merchants incur. However, in order to cover the more fantastic range of risk, rates with a high risk merchant account will always be higher than their lower risk counter-parts.
When looking for high risk merchant account, there are a number of factors if you want to take into account. Rates will be one of the most basic factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. You must need to look into fraud protection, customer service and reporting available a person as a merchant.
