High Risk Merchant

The Best Places To Look For A High Risk Merchant Account

A high risk merchant account will be needed if you fall into a category of business which is considered to be high risk by the banks, or if your credit profile is classified as being high risk. Some of the categories which are considered to be high risk are predictable enough, but others will probably surprise you. In many places, even being an Internet based business is considered a high risk, despite the fact that running a business on the Internet involves less financial risk than running a bricks and mortar business, and despite the fact that virtually every big business now has an online presence.

The traditional high risk industries are also ones which produced a great many wealthy and successful people. These include the adult industry, pharmacies, especially online pharmacies, and anything which involves speculation or gambling. Although these can be highly profitable business areas, they also have a high degree of chargeback transactions and incidences of fraud. Offering merchant account facilities is always a risk factor for banks, and they want to cut that risk to the minimum.

There are inherent risks in every merchant account, because there is always the possibility of a chargeback. Banks know they have to assume risk, but as long as those risks are pooled and the overall business is profitable, they will still offer the service. This can only be achieved by ruthlessly culling accounts which have too many chargebacks, and taking every precaution against credit card fraud. In many cases, the bank will simply not even consider an application from someone working in what has statistically been a high risk industry.

You have a far greater chance of being accepted for a high risk merchant account if you shop around online. There are specialist merchant account providers who are used to dealing with Internet based businesses, and many of them will have dedicated packages for the high risk areas of business. As it 8is quick and easy to perform an Internet search for these providers, this is obviously the first place you should look. Don't judge the providers on price alone, but look for good customer service as well.

If you have an established business and a good credit rating, you should be able to qualify for a high risk merchant account provided your turnover is at a reasonable level. If you are a start up business, or trade on a low turnover, you may not pass the test even of a specialist company. In this case, you will usually be offered a third party solution which will get your business up and running. Later, when you have reached the turnover threshold, you will be upgraded. The interest rates charged by these providers are less than you might expect, especially given that you are classed as a high risk merchant.

 

 

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Technorati Tags: Credit Card Processing, Merchant Account, High Risk Merchant

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