Oct 16

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 merchants the most popular, with the most cases cost effective, source is from one third party merchant account issuer.

A high risk merchant credit card is required by businesses that, when compared together with ‘traditional’ goods/services business, was at a higher risk of:


Fraudulent Transactions

High sum 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 will not accept merchants from certain countries.

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

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

Due into the high risk classification, most banks won’t provide a merchant account to those involved with a danger industry (such as adult entertainment, replica goods, pharmacy offshore merchant account etc). For this reason some vacation providers offer their services to both general merchants and precarious merchants.

Merchant account providers that are developed to service riskly merchants will broadly speaking provide a higher level of fraud protection, with a purpose to decrease the cost their merchants incur. However, in order to cover the level up of risk, rates high risk merchant account will possibly be higher than their lower risk counter-parts.

When hunting for a high risk merchant account, there exist several factors take into mind. Rates will be one of the biggest factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You must need to look into fraud protection, customer service and reporting available a person as a merchant.