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ARE YOU ELIGIBLE FOR A HIGH RISK MERCHANT ACCOUNT IN THE US?

 A merchant account allows you to accept credit card payments from your customers. According to experts this is an easy way to increase the sales volume of your business and thereby increase your profits. In the competitive business world of today providing a convenient means for your customer to pay their bills is compulsory or else you will be risking of losing them. However, obtaining a merchant account is not as easy as it sounds, especially in the United States.

MasterCard and Visa, which are the major credit cards in the world and the U.S., forbid some companies to establish a US based account to accept debit card and credit card payments because of the line of business the company is in. The important task of creating a black list of companies is compulsory for every acquiring bank, which are members of MasterCard and Visa networks. Even the “merchant service providers” should have a black list. The meaning of this is that, no merchant bank in the United States is allowed to do business with the organisations in the “Black List”.

The largest factor to determine whether a business should be black listed or not from setting up a merchant account in the United States is, its chargeback potential. It means that the line of business where there are high probabilities of charge backs will not be allowed to obtain a merchant in the US. The historical data shows that some industries have unacceptable high levels of charge backs. Even those businesses which already have a US based merchant account cannot relax as the chargeback level is very closely monitored for each merchant. If they increase to over one percent of the monthly transactions, for 3 consecutive months, then the merchant will have to surrender his merchant account. Also, the providers of merchant services get penalised for the high levels of chargeback by their merchants, which motivates them to keep strict checks on the levels. Of course, those penalties are directly passed on to the merchants by the merchant account providers.

Applications of companies involved in the following businesses will not get approved for the “US based merchant accounts”, because historical data shows that these businesses get a high level of charge backs:

  • Any merchant involved in illegal activities.
  • Adult oriented services or products through printed material, telephone, internet and all other media types.
  • MO/TO and online pharmacies where the patient does not visit a physician in person. He just consults the doctor over the phone or the internet, where the fulfilment of the medication is performed.
  • Re – importation of pharmacy products from other countries.
  • MO/TO and online weapon or firearm sales, including ammunitions.
  • Gambling, raffles and lotteries.
  • Escort services
  • Occult materials.
  • Online gambling.
  • Collection agencies that involve in collecting of the uncollectible debt
  • Agencies that help their clients to repair their credit
  • Odds making or sports forecasting

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.