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 another party merchant account organization.

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

Bankruptcy

Fraudulent Transactions

High quantity of sales

High rate of refunds

high risk merchant account for online pharmacy rate of charge-backs

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

Merchants Location – Some merchant account providers will not 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 history.

Due into the high risk classification, most banks will not provide your free account to those who are in a perilous industry (such as adult entertainment, replica goods, pharmacy etc). For this reason some other providers offer their services to both general merchants and heavy chance merchants.

Merchant account providers which developed to service perilous merchants will generally provide the next step of fraud protection, so that you can decrease charge their merchants incur. However, in order to cover the advanced level of risk, rates for just about any high risk merchant account will definitely 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 of the most basic factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. You will need to adopt fraud protection, customer service and reporting available you as a merchant.