Merchant accounts are needed in order for a business to accept credit card payments. As a merchant, there are two places you can obtain a merchant account; a bank, or a third party provider. For online merchants the most popular, and in most cases cost effective, source is from one third party merchant account doctor.

A high risk merchant account is required by businesses that, when compared into a ‘traditional’ goods/services business, have reached a higher risk of:

Bankruptcy

Fraudulent Transactions

High lots of sales

High rate of refunds

High rate of charge-backs

Other reasons a merchant may be categorized being a high risk are:

Merchants Location – Some merchant account providers will not accept merchants from certain countries.

The Product/Service the merchant sells is prohibited in some jurisdictions.

Merchant Credit standing – Some providers won’t accept merchants with poor or no credit track record.

Due for the high risk classification, most banks will not provide your free account to people in a danger industry (such as adult entertainment, replica goods, pharmacy offshore merchant account etc). Therefore some third party providers offer their services to both general merchants and high risk merchants.

Merchant account providers of developed to service precarious merchants will broadly speaking provide the next step of fraud protection, you will find that decrease the cost their merchants incur. However, in order to cover the more fantastic range of risk, rates with a high risk merchant account will continually be higher than their lower risk counter-parts.

When hunting for a high risk merchant account, there exist several factors that you should take into consideration. Rates will be one of the most important factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. Require need to think about fraud protection, customer service and reporting available a person as a merchant.