Merchant accounts are needed 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, so in most cases cost effective, source is from another party merchant account provider.
A high risk credit card merchant account is required by businesses that, when compared to a ‘traditional’ goods/services business, are at a higher risk of:
High amount of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized for a high risk are:
Merchants Location – Some merchant account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is unlawful in some jurisdictions.
Merchant Credit record – Some providers will not accept merchants with poor or no credit account.
Due for the high risk classification, most banks will not provide business relationship to those invoved with a riskly industry (such as adult entertainment, replica goods, pharmacy etc). For this reason some third party providers offer their services to both general merchants and heavy risk merchants.
Merchant account providers that have been developed to service high-risk merchants will probably provide the next stage of fraud protection, so that you can decrease charge their merchants incur. However, in order to cover the advanced level of risk, rates high risk pharmacy merchant account risk merchant account will always be higher than their lower risk counter-parts.
When hoping for a high risk merchant account, there are many factors take note. Rates will be one of the biggest factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. Then you will need to adopt fraud protection, customer service and reporting available you as a merchant.