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, so in most cases cost effective, source is from a 3rd party merchant account organization.
A high risk merchant card account is required by businesses that, when compared into a ‘traditional’ goods/services business, have a a higher risk of:
High volume 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 offshore merchant account for pharmacy account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is illegitimate in some jurisdictions.
Merchant Credit standing – Some providers will not accept merchants with poor or no credit history.
Due towards the high risk classification, most banks won’t provide a forex account to those in a perilous industry (such as adult entertainment, replica goods, pharmacy etc). As such some vendor providers offer their services to both general merchants and heavy risk merchants.
Merchant account providers which developed to service riskly merchants will normally provide the next stage of fraud protection, with a purpose to decrease the price of their merchants incur. However, in order to cover the advanced level of risk, rates high risk merchant account will definitely be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there are several factors that you should take into consideration. Rates will be one of the most important factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. You’ll need to adopt fraud protection, customer service and reporting available you r as a merchant.