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, plus most cases cost effective, source is from another party merchant account organization.
A high risk credit card merchant account is required by businesses that, when compared together with ‘traditional’ goods/services business, was at a higher risk of:
High quantity 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 illegal in some jurisdictions.
Merchant Credit history – Some providers will not accept merchants with poor or no credit history.
Due for the high risk classification, most banks will not provide a forex account to those invoved with a danger industry (such as adult entertainment, replica goods, pharmacy etc). As such some vendor providers offer their services to both general merchants and high risk merchants.
Merchant account providers that happen to be developed to service perilous merchants will generally provide the next step of fraud protection, you will notice that decrease the price of their merchants incur. However, in order to cover the higher level of risk, rates with a high risk pharmacy merchant account risk merchant account will definitely be higher than their lower risk counter-parts.
When looking for high risk merchant account, there many factors that you should take into account. 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 ongoing fees. You will need to contemplate fraud protection, customer service and reporting available a person as a merchant.