Merchant Accounts

What is a High Risk Merchant Account?

Online credit card processing is a fast and easy way for your customers to pay for goods and services. Customers not only appreciate online shopping because it’s fast and convenient, they appreciate the security as well. Ecommerce sales in the United States have enjoyed a 400% increase over the last 10 years from $72 billion in 2002 to $289 billion in 2012, according to Statista.com. One thing is clear: ecommerce credit card processing online is a thing of the future and will only become more prevalent as time goes on.

That’s why if you’re a high risk merchant, it’s extremely important to use a trusted merchant account provider to ensure the reputation of the high risk merchant remains in high regard.  What qualifies your need to have a high risk merchant account depends on a number of factors, and is spread across multiple industries.

There are five main reasons why your business may be considered a high-risk account:

1. Your personal credit or company finances would not be able to support the sales volume that you are asking for in the worst-case situation.
2. Longer charge-back liability periods.
3. The bank feels it spends too many resources on you because of a repeated history of charge backs.
4. Being involved in an industry that may affect the reputation of the merchant account service to other, more conservative merchants.
5. Having a listed terminated merchant file (TMF) that resulted in not honoring term agreements. This is also called a MATCH list.

Examples of these could be adult productions, business opportunities, home-based business, online auctions, telemarketing, and debt services and so on. If your business does accept credit cards and you may be a high risk merchant, you need to find a merchant processing company that tailors specific plans for high-risk merchants. You will need a company that has the best terms and fees that they can offer for your business.