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 an additional party merchant account provider.
A high risk merchant card account is required by businesses that, when compared together with ‘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 being a high risk are:
Merchants Location – Some merchant account for online pharmacy account providers will not accept merchants from certain countries.
The Product/Service the merchant sells is against the law in some jurisdictions.
Merchant Credit standing – Some providers will not accept merchants with poor or no credit details.
Due to the high risk classification, most banks won’t provide an account provider to those in a high-risk industry (such as adult entertainment, replica goods, pharmacy etc). As such some outside providers offer their services to both general merchants and high risk merchants.
Merchant account providers which developed to service riskly merchants will generally provide to the next stage of fraud protection, so that you can decrease charge their merchants incur. However, in order to cover the more fantastic range of risk, rates for a high risk merchant account will possibly be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there exist several factors that you should take note. Rates will be one very sound factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. Require need to think about fraud protection, customer service and reporting available you r as a merchant.