High Chargeback Merchant Account
Chargebacks are one of the biggest fears for banks and payment processors. All businesses have chargebacks however the allowed amount of chargebacks is usually under 1% and offshore under 2%. Banks worry about chargebacks for two main reasons. First off chargebacks can end up costing the bank or payment processor money. If the merchant has too many chargebacks, the merchant may go out of business and leave the bank or payment processor to deal with the chargebacks. Too many chargebacks is also able to shut down a payment processor’s account. For example if the payment processor sets up a number of merchants in a third party or aggregate account also know as placing merchants inside one account that is managed by the processor. If one of these merchants has a high amount of chargebacks, the whole account will be closed losing substantial revenues for all merchants processing within along with the payment processor. Lastly, if the bank or payment processor receives a number of chargebacks they will be on the radar with; Visa, MasterCard and possibly the government. All of which the payment processor and bank would like to avoid.
Many high risk merchants that receive high amounts of chargebacks will need to be setup in an aggregate account with a payment processor. It is not possible for these merchants to receive a bank direct account since the chargebacks will go over 2% and they will be closed down. The merchant will definitely be paying a higher rate with an aggregate account that is masking the business’ real chargebacks. The reason for this is to water down the chargebacks in the account with other merchants. This requires more management than normal.
Offshore Merchants has been setting up high chargeback merchant accounts since 2007 and will be able to have your business setup and processing within 2 weeks.
Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.
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