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, in addition as in most cases cost effective, source is from one third party merchant account provider.
A high risk credit card merchant account is required by businesses that, when compared with ‘traditional’ goods/services business, was at 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 to be a high risk are:
Merchants Location – Some merchant account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is prohibited in some jurisdictions.
merchant account providers for online pharmacy Credit record – Some providers will not accept merchants with poor or no credit foundation.
Due into the high risk classification, most banks will not provide a forex account to people in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some outside providers offer their services to both general merchants and heavy risk merchants.
Merchant account providers which developed to service perilous merchants will broadly speaking provide the next stage of fraud protection, so as to decrease charge their merchants incur. However, in order to cover the more fantastic range of risk, rates for virtually any high risk merchant account will be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there many factors to be able to 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 continuing fees. You will need to adopt fraud protection, customer service and reporting available for as a merchant.