Requirements for opening SPORTSBOOK merchant accounts

Before getting into the details about the requirements for opening a merchant account, it is important to know the basics account merchant accounts.

What are merchant accounts?

In simple words, merchant accounts are a kind of financial arrangement between a merchant and a financial institution where the latter grants the former a new credit line. Every time business transactions are made, the financial institution will transfer after collecting the payment to the savings account. The interchangeable and processing costs will automatically get deducted from the amount that is deposited. In addition to this, the merchant banks also submit requests to the bank which has provided the customer card for payments. The primary objective of merchant accounts is to perform business transactions proficiently and completely.

Why does a merchant account need so many safeguards and cross-checks?

Merchant accounts are typically linked with a number of risks such as liability risk, fraud risk and credit risk. In order to reduce these risks, many cross-checks and safeguards are implemented. One will understand the importance of these safety measures after the unpredictability of the risks will be understood.

-       Credit risk – a credit risk is taken by a merchant bank with respect to the money that a merchant owes to the bank. A merchant account is usually given to a person with no credit or poor credit rating. Hence, the risk taken by a bank is considerably high.

-       Fraud risk – If a trade is business-oriented, then the chances for the occurrence of a fraud is very high. A typical instance of a fraud risk is the transactions made by credit cards by a credit card holder who is unauthorized. Fraud risks are fully preventable but unavoidable.

-       Contingent liability risk – A contingent liability risk is considered the most awful risk which could even force a merchant to close his/her business. The best instance of this type of risk is when several consumers ask a merchant to return their money. A contingent liability risk is disastrous and unforeseeable for any merchant.

When is a person eligible for a merchant account?

If a merchant owns a high risk business such as online pharmacy, video gaming, etc. then there will be difficulties in obtaining merchant accounts. Moreover, the transaction fees as well as the set-up fees are exceptionally high.

What geographical requirements are needed for the setting up of merchant accounts in US?

Following are the geographical requirements needed for setting up merchant accounts in US:

-       The business needs to be an American corporation.

-       The merchandise can be stored as well as deported from America.

-       A valid postal address must be present in America.

-       The transactions of the business should take place in American dollars.

-       The bank guarantor must possess authentic SSN and should not have a bad credit rating.

-       Finally, the server of the business website should also be American-based.

In addition to the above requirements, a business also needs to be regulated by the state or federal government and should also have a business license. 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.