Who Needs a High Risk Merchant Account?

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 merchants the most popular, and in most cases   high risk merchant account    cost effective, source is from a third party merchant account provider.

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

Bankruptcy

Fraudulent Transactions

High volume 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 providers will not accept merchants from certain countries.

The Product/Service the merchant sells is illegal in some jurisdictions.

Merchant Credit History – Some providers will not accept merchants with poor or no credit history.

Due to the high risk classification, most banks will not provide a merchant account to those in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). As such some third party providers offer their services to both general merchants and high risk merchants.

 

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