All You Need to Know About High Risk Merchant Account
By Angela Sanders Friday, October 04, 2013, 12:27 AM EDT
There are some types of business, which for some reason or the other are considered by banks and credit institutions as high risk. A number of online businesses are classified as high risk owing to the reason of high sales volumes and susceptibility to fraud.
Such merchants, in spite of being highly profitable, find it hard to accept credit card payments due to their inability to acquire high risk merchant account.
What businesses are considered high risk?
- Banks and credit companies have a classification list of types of businesses that they deem high risk, some of these include gaming, gambling, adult, apparels, downloadable software and health shops on the internet, among many others.
- Businesses with bad credit history or chances of chargeback
- Businesses with high sales volumes and multiple transactions making it susceptible to fraud.
What is high risk merchant account?
For merchants high risk merchant account can have diverse meanings. For an acquiring bank however, high risk merchant means a business with unpredictable cash flow and very high failure risk.
Acquiring banks also consider debt collection businesses, businesses with thin profit margins and risky online businesses as high risk. A high risk merchant account is therefore a merchant account, which is set up to be operated by high risk business to accept credit card payments in return for goods and services they provide.
Benefit of high risk merchant account
Merchants enjoy plentiful benefits with high risk merchant account some of which include:
- Providing the customers with a flexibility to make payments
- Facilitating the business to process credit cards payments, along with accepting payments through debit cards, checks, over the phone etc.
- Allows credit card processing for all major cards - Visa and MasterCard etc
- Facilitates payment processing in almost all currencies of the world
- Enhance sales volumes
- Facilitates organized transactions, thus minimizing chances of fraud
- It also provide around the clock customer support and technical back-up
Who provides high risk merchant account?
Since banks and credit institutions have strict criteria for high risk merchants and do not offer merchant accounts to them easily, merchants seek assistance from high risk merchant account providers. Merchant accounts providers have a huge network of banks, and they specialize in assisting merchants obtain high risk merchant account to process credit card payments. With hundreds of merchant account providers out there finding the provider who offers the best choice can be difficult to find. Selecting a good provider is important since processing of a high risk account can be tedious and the fees and charges involve are higher.
Things to consider when selecting high risk merchant account provider
- Research thoroughly for merchant account providers
- Compare all of them for the services offered by them and fees charged (also look for any hidden costs etc.)
- Make sure you choose a provider with low fees (set-up fees and recurring charges) and interest rates around the clock service support
Author bio: Author is a high risk merchant account holder, with years of experience in operating an account. The company distinguishes itself by ensuring low processing fees, assistance on lowering chargeback and quick application approval.