Who Needs a High Risk Merchant Account?

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 pharmacy merchant services merchants the most popular, and in most cases cost effective, source is from another party merchant account organization.

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

Bankruptcy

Fraudulent Transactions

High amount of sales

High rate of refunds

High rate of charge-backs

Other reasons a merchant may be categorized as a high risk are:

Merchants Location – Some merchant account providers won’t accept merchants from certain countries.

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

Merchant Credit record – Some providers won’t accept merchants with poor or no credit foundation.

Due into the high risk classification, most banks won’t provide an account provider to people in a danger industry (such as adult entertainment, replica goods, pharmacy etc). Consequently some third party providers offer their services to both general merchants and high-risk merchants.

Merchant account providers that have been developed to service high risk merchants will most likely provide the next step of fraud protection, so that you can decrease expense of their merchants incur. However, in order to cover the advanced level of risk, rates for a high risk merchant account will always be higher than their lower risk counter-parts.

When looking for a high risk merchant account, there exist several factors that you should take note. Rates will be one of the most basic factors, this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. Then you will need to think about fraud protection, customer service and reporting available you as a merchant.