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 a third party merchant account offerer.

A high risk merchant card account is required by businesses that, when compared to a ‘traditional’ goods/services business, have a 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 like a high risk are:

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

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

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

Due for the high risk classification, most banks will not provide your free account to people in a danger industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some other providers offer their services to both general merchants and heavy risk merchants.

Merchant account providers which developed to service high-risk merchants will generally provide the next stage of fraud protection, so that you can decrease expense of their merchants incur. However, in order to cover the advanced of risk, rates for a high risk merchant account will possibly be higher than their lower risk counter-parts.

When purchasing a high risk merchant account, there exist several factors take under consideration. Rates will be one of the most important factors, refund policy includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. Require need to contemplate fraud protection, customer service and reporting available you as a merchant.