Do you have an online business, and you would like to have the capability of processing credit card transactions, but you are at a higher risk of facing chargebacks? If so, then you may need what is known as a high risk merchant account. The more that you know about a high-risk account for merchants, the easier it will be to determine if this is the right choice for your business.
In order to open up such an account, it is imperative that you locate an acquiring bank that will be willing to underwrite your business. If you want to increase your odds of obtaining an account, you need to be sure that you seek assistance from a reliable payment service provider.
High Risk Merchant Account – What Is It?
This is a type of payment processing account that businesses use when they are considered high-risk in the eyes of the banks. Such businesses can be prone to chargebacks, so they often see higher fees in terms of merchant services. Whenever the history of a business shows a great deal of refunds or chargebacks, there could be a rolling reserve put onto your account by the bank. This is money required to help cover the potential for fraudulent activity or chargebacks.
Are You A High-Risk Merchant?
The more your business comes with chargebacks, the higher the risk. The major factors that go into determining this will be your processing history as well as industry reputation. It is usually a good idea to have a chargeback ratio that comes in under .09% of all transactions. Some of the factors that go into high-risk determination include:
- Over $20k in sales volume each month
- Average transactions on credit cards that come in over $500
- Selling services or products to countries that have a reputation for higher fraud levels
- Poor credit history or showing excessive chargebacks
Businesses within the travel industry often get labeled as being high-risk because of all of the factors that may lead to cancellations. When this happens, there can be a lot of customers filing chargebacks or refunds requested. Other businesses include websites with an adult theme, forex trading, gambling, and more.
High Risk Merchant Account Benefits
If you are interested in a high-risk account for your business, there will be higher processing rates and fees due to the risk involved. However, there are certain benefits, such as:
- Protection from chargebacks – With this level of protection, it is easier for you to keep your account in good shape as a merchant.
- Global coverage – When you are a high risk merchant, you have the ability to grow by accepting transactions spanning multiple currencies while selling to clients that live in countries that are considered to be higher risk.
No matter what questions you may have regarding high risk merchant accounts, we are here to help at Merchant Focus! You can use our convenient online contact form by clicking here to inquire about our services or simply give us a call at (800) 895-4085, and we can go over the details with you.