HIGH RISK MERCHANT
ACCOUNT
Getting a merchant
account is not as easy as it sounds to
be. There are several reasons for a bank
to reject your application for a
merchant account which includes the
nature of your business being very risky
or high number of credit card charge
backs or low turnover or even, not
having enough experience in the
industry. However, the most number of
times a company has been rejected from
getting a merchant account is due to the
fact that their company deals with or
are involved with businesses which are
risky such as gaming. But there is a
very old belief in business which is
“The higher the risk the higher the
returns”, which makes it impossible for
the banks to totally ignore such
businesses.
In such a case the only
solution would be to apply for a “High
Risk Merchant Account”. Businesses which
are considered risky are tobacco
companies, online cigarette companies,
sports wagering, travel services,
pharmaceutical products, adult services
and online gambling or any other
business which has an unusually large
turnover and high risk of fraud. But, if
you think that your company does not
deal with such risky businesses then you
are better off with the standard account
or the offshore account. Once obtained,
the “High Risk Merchant Account” will
enable your business to accept credit
card payments over the net for the “High
Risk Services” provided by you.
The Rates and fees for
High Risk Merchant Accounts are not the
same as for the standard account or the
offshore account. While getting your
“High Risk Merchant Account”, you should
not be surprised if you have to pay a
high setup fee, while this is not
required for the standard account. This
is necessary because the provider of
such an account is at a higher risk than
the user. Very obviously, you also have
to pay much higher rates to process the
credit cards used by your customers.
There are several
difficulty issues in obtaining a “High
Risk Merchant Account”. If you have
tried to get it directly from a bank and
were rejected due to the obvious
reasons, then you should contact a 3rd
party processor of credit cards. The
providers or banks rejected your
application because they are not willing
to take the risk of chargeback’s in your
business. Thinking that, you will not be
able to obtain a merchant account since
your line of business is very risky, is
absolutely incorrect. You only have to
do proper research to get your business
the edge over your competitors.
“Low Cost High Risk
Merchant Accounts” are a myth and do not
exist. The providers only use this
phrase to attract customers. It is
better if you accept the fact that your
line of business is risky and therefore,
you have to pay high rates for the
processing of credit cards used by your
customers. However, all hope is not
lost. Since there are several providers
in this line too, you many get a good
deal due to the competitive edge.
