Who Needs a High Risk Merchant Account?

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 pharmacy merchant services merchants the most popular, so in most cases cost effective, source is from an additional party merchant account provider.

A high risk processing account is required by businesses that, when compared along with ‘traditional’ goods/services business, are at a higher risk of:

Bankruptcy

Fraudulent Transactions

High lots 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 illegitimate in some jurisdictions.

Merchant Credit file – Some providers will not accept merchants with poor or no credit track record.

Due for the high risk classification, most banks will not provide a merchant account to people in a high-risk industry (such as adult entertainment, replica goods, pharmacy etc). For this reason some other providers offer their services to both general merchants and precarious merchants.

Merchant account providers that have been developed to service riskly merchants will normally provide the next step of fraud protection, so that you can decrease the cost their merchants incur. However, in order to cover the advanced level of risk, rates for a high risk merchant account will definitely be higher than their lower risk counter-parts.

When looking for high risk merchant account, there are a number of factors take under consideration. Rates will be one of the most basic factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You’ll need to look into fraud protection, customer service and reporting available you as a merchant.