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 provider.
A high risk merchant credit card is required by businesses that, when compared together with ‘traditional’ goods/services business, was at a higher risk of:
High lots of sales
high risk pharmacy merchant account 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 will not accept merchants from certain countries.
The Product/Service the merchant sells is unlawful in some jurisdictions.
Merchant Credit record – Some providers will not accept merchants with poor or no credit account.
Due towards high risk classification, most banks won’t provide an account provider to those who are in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some outside providers offer their services to both general merchants and high risk merchants.
Merchant account providers which developed to service precarious merchants will normally provide to the next stage of fraud protection, you will notice that decrease the cost their merchants incur. However, in order to cover the higher level of risk, rates high risk merchant account will possibly be higher than their lower risk counter-parts.
When hunting for a high risk merchant account, there are several factors to be take note. Rates will be one of the biggest factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. You’ll need to adopt fraud protection, customer service and reporting available a person as a merchant.