Why you might need a high risk merchant account

by Alisha Wilson Merchant Services

Any business that wants to accept card payments will want to have a merchant account. Some types of transaction and types of online businesses must apply for a high risk merchant account rather than a standard account because their business is deemed to have a high risk of charge backs, refunds, or volumes of card payments where the cardholder is not present at the time the transaction is made. These financial transactions are usually managed by high risk merchant account providers offering online payment processing for their clients.

If your online business is deemed to be high risk, then you will likely pay higher charges for accepting payments and related transactions than high street retailers; however, being able to accept credit card payments will be much more advantageous to your online business, especially where you are able to operate worldwide.

Most high risk merchant account providers will be able to offer scalability in handling small to large volumes of online payment processing. If you start small and suddenly your business increases its sales volume, you will have support to accept payments over the internet, by phone or by mail order. Your merchant account will be able to accept payments in different currencies and seamlessly manage refunds and charge backs.

Certain businesses attract high risk merchant account providers such as currency trading, gambling, adult sites, file sharing and other services. These services are not usually supported by traditional bank accounts. Many high risk merchant accounts are held offshore and are less stringent on making sure you match certain selection criteria or worry themselves about your credit score. This makes it easy to apply for an account.

Accepting online payment processing for your business will increase your sales volume; but being categorized as a high risk business might not be as acceptable to the business owner. It is likely to be inevitable that your business could be considered as a high risk and this would be explained to you when the merchant is assessing your application.

As with all decisions regarding financial services, do your homework and compare options for online payment processing from a variety of high risk merchant account providers to make sure that what you are offered matches your needs. Then compare fees and charges that will be applied to transactions against the volume of card payments to gauge the overall payment processing costs.

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