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, with the most cases cost effective, source is from a 3rd party merchant account offerer.
A high risk credit card merchant account is required by businesses that, when compared along with ‘traditional’ goods/services business, have a a higher risk of:
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 won’t accept merchants from certain countries.
The Product/Service the merchant sells is against the law in some jurisdictions.
Merchant Credit history – Some providers will not accept merchants with poor or no credit account.
Due towards high risk classification, most banks won’t provide your free account to people in a danger industry (such as adult entertainment, replica goods, pharmacy merchant account payment gateway etc). Consequently some vendor providers offer their services to both general merchants and high risk merchants.
Merchant account providers that happen to be developed to service perilous merchants will broadly speaking provide to the next stage of fraud protection, with a purpose to decrease expense of their merchants incur. However, in order to cover the more fantastic range of risk, rates for a high risk merchant account will always 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 note. Rates will be one very sound factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. Require need to adopt fraud protection, customer service and reporting available you as a merchant.