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, plus most cases cost effective, source is from a 3rd party merchant account doctor.
A high risk processing account is required by businesses that, when compared into a ‘traditional’ goods/services business, are at a higher risk of:
High lots of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized as a high risk are:
Merchants Location – Some merchant account for online pharmacy account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is illegitimate in some jurisdictions.
Merchant Credit report – Some providers will not accept merchants with poor or no credit foundation.
Due towards high risk classification, most banks will not provide your free account to those who are in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). Consequently some other providers offer their services to both general merchants and high-risk merchants.
Merchant account providers that happen to be developed to service riskly merchants will normally provide to the next stage of fraud protection, you will find that decrease might their merchants incur. However, in order to cover the advanced level of risk, rates with a high risk merchant account will always be higher than their lower risk counter-parts.
When looking for high risk merchant account, there exist several factors to be able to take into consideration. Rates will be one very sound factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You must need to think about fraud protection, customer service and reporting available to you as a merchant.