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, in addition as in most cases cost effective, source is from one third party merchant account doctor.

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

Bankruptcy

Fraudulent Transactions

High sum of sales

High rate of refunds

High rate of charge-backs

Other reasons a merchant may be categorized for a high risk are:

Merchants Location – Some merchant account providers for online pharmacy account providers will not accept merchants from certain countries.

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

Merchant Credit file – Some providers will not accept merchants with poor or no credit track record.

Due towards high risk classification, most banks won’t provide a merchant account to those who are in a high-risk industry (such as adult entertainment, replica goods, pharmacy etc). Because of this some third party providers offer their services to both general merchants and precarious merchants.

Merchant account providers that happen to be developed to service high-risk merchants will most likely provide a higher level of fraud protection, so that you can decrease expense of their merchants incur. However, in order to cover the advanced of risk, rates with a high risk merchant account will be higher than their lower risk counter-parts.

When looking for high risk merchant account, there are many factors to be able to take note. Rates will be one of the most basic factors, like 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 you r as a merchant.