High Risk Merchant Accounts

Although all merchant accounts charge fees from account holders, it charges a higher fee for high risk merchant accounts. This is because high risk businesses are more prone to fraud. Such businesses include travel agencies, those providing gaming and dating service; those involved in jewelry sales, web-based pharmaceutical products, adult sites and adult products, as well as alcohol and weight-loss products.

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High risk merchant accounts are typically divided into the following categories:

As stated earlier, restricted business include travel agencies, web-based pharmaceutical industries, businesses providing gambling and dating services, and outbound telemarketing businesses. Most merchant account providers do not approve applications from these businesses as they are prone to risks of charge back. Usually, a merchant involved in these businesses open an offshore merchant account - an account outside the US. With an offshore merchant account, the merchant can accept and process credit cards from anywhere around the globe. As with most high risk merchant accounts, an offshore merchant account may charge excessive fees and usually charge a reserve cost, which ranges from 10 to 20% of your total monthly sales.

Account providers often have problems with merchant accounts that process a high volume of transaction. The higher the volume of transaction, the more prone the business is to fraud. The merchant cannot afford to waste a lot of time assessing orders because he's going to lose a lot of revenue in the process. If there are a lot of fraud cases, the merchant will also lose revenue by dealing with chargebacks. Merchants that process a high volume of transaction must balance the risk of losing sales versus losing customers. The merchant must not set too stringent rules or he also risks losing legitimate orders. A merchant account that specializes in high volume transactions must be able to assist a retailer in reducing incidences of fraud.

A few years back, there was almost no provider that would approve an application from somebody with bad credit. Banks were known to impose stringent application regulations. Nowadays, independent service organizations (ISO's) are flourishing and are giving more people with bad credit to obtain a merchant account. Of course, just like in ordinary credit cards, bad credit merchant accounts charge more than their good credit counterparts.

Just like bad credit merchant accounts, merchant accounts from foreign businesses were perceived to be high-risk by banks because the laws in a different country may differ from US laws. Furthermore, chargeback claims from these businesses may be higher than resident businesses. Fortunately, ISO's are giving a chance for foreign businesses to open a merchant account without the severe regulations imposed upon by banks.

Regardless of your business type, there are payment options available and NCC Processing can help with your unique situation. Please give us a call today. 1-888-215-9822