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, so in most cases cost effective, source is from a 3rd party merchant account provider.
A high risk merchant credit card is required by businesses that, when compared to a ‘traditional’ goods/services business, have a a higher risk of:
High quantity 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 prohibited in some jurisdictions.
Merchant Credit history – Some providers won’t accept merchants with poor or no credit account.
Due towards high risk classification, most banks will not provide a forex account to those involved with a high-risk industry (such as adult entertainment, replica goods, pharmacy offshore merchant account etc). Therefore some vendor providers offer their services to both general merchants and precarious merchants.
Merchant account providers which developed to service high risk merchants will broadly speaking provide the next step of fraud protection, with a purpose to decrease the price of their merchants incur. However, in order to cover the more fantastic range of risk, rates for just about any high risk merchant account will possibly be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there are many factors to be able to take into mind. Rates will be one very sound factors, refund policy includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. Then you will need to think about fraud protection, customer service and reporting available for as a merchant.