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, and in most cases cost effective, source is from a third party merchant account provider.
A high risk merchant account is required by businesses that, when compared together with ‘traditional’ goods/services business, have reached 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 like a high risk are:
Merchants Location – Some merchant account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is illegal in some jurisdictions.
Merchant Credit report – Some providers won’t accept merchants with poor or no credit foundation.
Due into the high risk classification, most banks will not provide an account provider to those who are in a riskly industry (such as adult entertainment, replica goods, pharmacy etc). Because of this some other providers offer their services to both general merchants and heavy chance merchants.
Merchant account providers that happen to be developed to service precarious merchants will probably provide a higher level of fraud protection, with a purpose to decrease the price of their merchants incur. However, in order to cover the level up of risk, rates for a high risk merchant account providers for online pharmacy account will definitely be higher than their lower risk counter-parts.
When hunting for a high risk merchant account, there many factors if you want to take into account. Rates will be one of the most important factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You must need to contemplate fraud protection, customer service and reporting available for as a merchant.
