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, plus most cases cost effective, source is from another party merchant account organization.
A high risk merchant credit card is required by businesses that, when compared together with ‘traditional’ goods/services business, have a a higher risk of:
High volume 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 will not accept merchants with poor or no credit history.
Due towards the high risk pharmacy merchant account risk classification, most banks will not provide business relationship to people in a danger industry (such as adult entertainment, replica goods, pharmacy etc). For this reason some other providers offer their services to both general merchants and high-risk merchants.
Merchant account providers which developed to service riskly merchants will broadly speaking provide a higher level of fraud protection, you will find that decrease might their merchants incur. However, in order to cover the advanced of risk, rates for just about any high risk merchant account will be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there exist several factors to be able to take into account. Rates will be one of the most basic factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. You must need to think about fraud protection, customer service and reporting available you r as a merchant.