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 3rd party merchant account provider.

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

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

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

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

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

merchant account for online pharmacy account providers that happen to be developed to service riskly merchants will generally provide the next stage of fraud protection, you will find that decrease the price of their merchants incur. However, in order to cover the higher level of risk, rates for virtually any high risk merchant account will continually be higher than their lower risk counter-parts.

When looking for high risk merchant account, there 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 recurring fees. You’ll need to take into account fraud protection, customer service and reporting available to you as a merchant.