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, in addition as in most cases cost effective, source is from another party merchant account organization.
A high risk merchant card account is required by businesses that, when compared together with ‘traditional’ goods/services business, have a a higher risk of:
High lots of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized to be a high risk are:
Merchants Location – Some merchant account providers for online pharmacy account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is unlawful in some jurisdictions.
Merchant Credit history – Some providers won’t accept merchants with poor or no credit history.
Due to the high risk classification, most banks won’t provide an account provider to people in a riskly industry (such as adult entertainment, replica goods, pharmacy etc). Consequently some vacation providers offer their services to both general merchants and high risk merchants.
Merchant account providers that are developed to service perilous merchants will generally provide the next stage of fraud protection, so as to decrease expense of their merchants incur. However, in order to cover the higher level of risk, rates for just about any high risk merchant account will continually be higher than their lower risk counter-parts.
When purchasing a high risk merchant account, there are several factors take into account. Rates will be one of the most basic factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. Then you will need to think about fraud protection, customer service and reporting available you r as a merchant.