Who Needs a High Risk Merchant Account?
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 pharmacy merchant services merchants the most popular, and in most cases cost effective, source is from an additional party merchant account issuer.
A high risk credit card merchant account is required by businesses that, when compared into a ‘traditional’ goods/services business, have a 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 illegal in some jurisdictions.
Merchant Credit history – Some providers will not accept merchants with poor or no credit track record.
Due towards the high risk classification, most banks won’t provide business relationship to people in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). Because of this some other providers offer their services to both general merchants and heavy risk merchants.
Merchant account providers which developed to service precarious merchants will generally 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 for a high risk merchant account will possibly be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there exist several factors to be take into consideration. Rates will be one very sound factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. You will need to adopt fraud protection, customer service and reporting available to you as a merchant.
