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![*]()
Understanding High Risk Merchant accounts
![*]() Due to the stiff competition amongst merchant
account providers, it is much easier to locate high risk
merchant account providers.
In fact there is probably a provider out there for almost
all types of high risk businesses. It may take longer
to obtain the account - and there may be some perhaps
uncomfortable conditions imposed upon you - but it almost
always possible.
Certain businesses have been classified as high-risk because
of nature of the business that they conduct and because
of the risks involved.
You will find it difficult, if not impossible, to obtain
a merchant account for the following products, services,
or businesses, to name a few:
Employment agencies, Mortgage brokers, Airlines, outbound
telemarketing, check cashing establishments, gambling,
travel certificates, lotteries, adult business etc.
Some of the factors that lead to a high-risk tag are the
likelihood of a chargeback, the credit history of the
merchant account owner and the number of years that a
business has been operational.
But it is not impossible for high risk merchants to procure
a merchant account. Banks have made special arrangements
to enable high risk merchants with merchant accounts.
Banks normally take a nominal guarantee from the merchant
to cover for charge backs and also limit the volume of
transactions.
But by taking certain precautions and following some of
the pointers mentioned below, one can easily get a merchant
account.
- High-risk merchants should always keep their books
of business in order along with balance sheets and
profit and loss statements.
- If the merchant had an earlier account, they must
keep all processing statements ready so banks can
evaluate their transaction history.
- Merchant account applicants must also maintain their
credit rating high by clearing any past discrepancies
and by paying any outstanding fees that may be pending.
- Research various credit card processors that are
available and pick up the one that suits your needs
the best.
While shopping for your credit card processors take into
consideration some of the factors like:
- Transaction Fees that are charged for high risk
merchant accounts.
- Chargeback fees, as some processors my have a different
structure for high risk merchant accounts.
- Discount Fees, the percentage that is paid to merchant
account on per transaction basis.
- Fees or any other costs involved in using the high
risk merchant account for e-commerce transactions.
- Closely scrutinize all literature and lookout for
any hidden fees.
Study the processors, take precautions as mentioned above
and follow the above mentioned broad steps and there will
be no stopping you in obtaining a high-risk merchant account
quickly.
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