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, so in most cases cost effective, source is from one third party merchant account issuer.
A high risk merchant account is required by businesses that, when compared into a ‘traditional’ goods/services business, close to 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 account for pharmacy sells is against the law in some jurisdictions.
Merchant Credit record – Some providers will not accept merchants with poor or no credit history.
Due to the high risk classification, most banks won’t provide a merchant account to those involved with a perilous industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some other providers offer their services to both general merchants and high-risk merchants.
Merchant account providers that are developed to service precarious merchants will normally provide to the next stage of fraud protection, you will notice that decrease might their merchants incur. However, in order to cover the advanced level of risk, rates high risk merchant account will possibly be higher than their lower risk counter-parts.
When looking for high risk merchant account, there are a number of factors that you should take into mind. Rates will be one of the most important factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. Require need to adopt fraud protection, customer service and reporting available for as a merchant.