Merchant accounts are required 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 issuer.
A high risk merchant credit card is required by businesses that, when compared to a ‘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 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 unlawful in some jurisdictions.
Merchant Credit history – Some providers won’t accept merchants with poor or no credit history.
Due for the high risk classification, most banks will not provide a merchant account to people in a danger industry (such as adult entertainment, replica goods, pharmacy etc). As such some vacation providers offer their services to both general merchants and precarious merchants.
merchant account providers for online pharmacy account providers which developed to service perilous merchants will probably provide to the next stage of fraud protection, with a purpose to decrease expense of their merchants incur. However, in order to cover the advanced of risk, rates for virtually any high risk merchant account will definitely be higher than their lower risk counter-parts.
When hoping for a high risk merchant account, there are a number of factors to be able to take into mind. Rates will be one of the biggest factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. Require need to think about fraud protection, customer service and reporting available you as a merchant.