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 third party merchant account doctor.
A high risk processing account is required by businesses that, when compared to a ‘traditional’ goods/services business, have reached a higher risk of:
Bankruptcy
Fraudulent Transactions
High sum of sales
high risk pharmacy merchant account 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 unlawful in some jurisdictions.
Merchant Credit record – Some providers will not accept merchants with poor or no credit details.
Due towards 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). For this reason some vacation providers offer their services to both general merchants and precarious merchants.
Merchant account providers which developed to service riskly merchants will probably provide the next stage of fraud protection, you will find that decrease the cost their merchants incur. However, in order to cover the advanced level of risk, rates with a high risk merchant account will be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there are many factors if you want to take into mind. Rates will be one of the most important factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. You’ll need to take into account fraud protection, customer service and reporting available you r as a merchant.
