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, plus most cases cost effective, source is from a third party merchant account provider.
A high risk merchant account is required by businesses that, when compared along with ‘traditional’ goods/services business, was 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 being a high risk are:
Merchants Location – Some merchant account providers won’t accept merchants from certain countries.
The Product/Service the merchant account providers for online pharmacy sells is unlawful in some jurisdictions.
Merchant Credit report – Some providers won’t accept merchants with poor or no credit history.
Due towards high risk classification, most banks won’t provide an account provider to those involved with a riskly industry (such as adult entertainment, replica goods, pharmacy etc). Because of this some vendor providers offer their services to both general merchants and heavy chance merchants.
Merchant account providers of developed to service high-risk merchants will probably provide the next step of fraud protection, with a purpose to decrease the cost their merchants incur. However, in order to cover the higher level of risk, rates high risk merchant account will always be higher than their lower risk counter-parts.
When hunting for a high risk merchant account, there are a number of factors that you should take under consideration. Rates will be one very sound factors, refund policy includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. Require need to contemplate fraud protection, customer service and reporting available a person as a merchant.