High Risk Merchant AccountsHigh-risk merchant accounts allow “riskier” businesses to process credit cards.
The “high risk” of these types of businesses (discussed below) are:
- the payments or funds may not go through,
- they have a higher history of fraud,
- they receive numerous chargebacks,
- they sell services which are not tangible and cannot be measured.
When you take orders over the Internet, everything is digital and this significantly increases the chance for fraud.Some banks will still do business with a high-risk merchant but it usually comes at much higher fees than for non-high-risk merchants. Here are a few different ways banks decide whether your business is high risk:
- If you have had a previous application denial by a Merchant.
- If you have bad business credit or credit scores below their standards.
- If you are an international merchant doing business outside of the country.
- If you’ve experienced a large number of high chargebacks or a growing number of chargebacks in general.
- If your business is a high-risk industry like a debt collector, online pharmaceutical company, or sees a lot of high ticket sales.