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TYPES OF HIGH RISK CREDIT CARD MERCHANT ACCOUNTS

To give your business the competitive edge you need to provide a way for your customers to pay by credit cards. In order to do that, you have to have a “Credit Card Merchant Account” provider to process your transactions. The provider has to give you a solution with incentives, service, terms, rates and features suitable for your business. Prior to choosing the best solution for your business, it will help to known the various types of Credit Card Merchant Accounts that are available in the market. Having a good understanding of the various types of merchant accounts and its features, services and rates will take you one step closer in choosing the best credit card processing soln. needed for your business.

Credit Card Merchant Accounts can be broken down into 2 main categories:

  • Card – Present Merchant Accounts
  • Card – Not – Present Merchant Accounts

The fees and rates on these accounts are based on the outcome of a simple rule:

Higher fees and rates are applicable to businesses with higher risk. Therefore, one immediate conclusion can be that, card not present merchant accounts will attract much higher rates than card present merchant accounts.

Let’s look into each type in more detail:

The “Card – Present Merchant Account” requires that both the customer and the credit card are physically present at the POS. The administrator takes the customers credit card and swipes it in machine, which captures the details from the magnetic stripe of the credit card. For that reason, the holder of the card – present merchant account should have some kind of hardware installed at his business location.

The Card – Present Merchant Account is further sub – categorized in to 2 categories:

  • Portable processing solution and
  • Non – Portable processing solution

Non – Portable solutions, as the name suggests, will be installed at a place and then cannot be moved. This solution is preferable at retail locations. The processing hardware is linked to the modems or phones. When the card is swiped, the date is captured which goes through a real – time authorization procedure. The costs are lesser than portable processing solution.

The Portable Processing solution cannot guarantee a real – time authorization. An example of portable processing solution is the wireless merchant account, which needs a wireless card reader, attracting higher monthly rates and hardware costs.

Another form of a portable solution is “Store – and – Forward” merchant account. This has a similar hardware as the previous one but also has a memory which will store the details of credit card at the POS and later forward it for processing. The rates applicable here are lesser when compared to the wireless merchant account. This type is also more affordable.

The cheapest is the “Card – Not – Present” merchant account which is a “Mail Order Merchant Account” abbreviated as “MOTO”. All that is required is the hardware which is used to key information in about the credit card of the customer. The best example of such an account is the “Internet Merchant Account”.

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.