A high risk merchant account is a type of account that allows businesses to process credit and debit card payments, even if they are considered to be high risk. High risk merchant accounts are usually more expensive than regular merchant accounts, and they often come with higher fees and stricter terms. However, they can be a valuable tool for businesses that might not be able to get approved for a regular merchant account. If you’re thinking about applying for a high risk merchant account, it’s important to understand how they work and what you can expect. In this article, we’ll give you an overview of high risk merchant accounts and how they work.
What is a high risk merchant account?
A high risk merchant account is a credit card processing account that is considered to be high risk by the merchant acquirer or bank. This can be due to a number of factors, including the type of business, the industry, the size of transactions, or the history of the business.
High risk merchants typically pay higher fees for their merchant accounts than businesses that are considered to be low low-riskis is because there is a greater chance that these businesses will charge back on their credit card transactions, which can cost the merchant acquirer or bank money.
There are a number of different types of businesses that are considered to be high risk. These include online gambling websites, adult entertainment businesses, and businesses that sell products or services that are considered to be high risk. If you are a business owner in one of these industries, then you will likely need to get a high risk merchant account in order to accept credit cards.
Who needs a high risk merchant account?
There are a number of businesses that may be considered high risk by credit card processors and acquirers. These businesses may be classified as high risk for a number of reasons, including:
- Businesses that sell products or services that are considered to be high risk, such as adult entertainment, gambling, or firearms.
- Businesses with a high rate of chargebacks or refunds.
- Businesses that sell products or services that are considered to be high risk, such as digital products or services.
- Businesses that have been previously flagged for fraud.
If your business falls into one of these categories, you may need a high risk merchant account in order to process credit card payments. High risk merchant accounts come with a number of benefits, including:
- Higher approval rates than traditional merchant accounts.
- Lower fees and rates than traditional merchant accounts.
- Access to specialized payment processing features and services.
How do I get a high risk merchant account?
There are a few things you need to do in order to get a high risk merchant account. The first is to find a merchant account provider that specializes in high risk businesses. Next, you’ll need to provide some basic information about your business, including your average monthly sales volume and the type of products or services you sell. Finally, you’ll need to have a good credit score in order to qualify for a high risk merchant account.
If you’re not sure where to start, there are a few resources that can help you find the right merchant account provider for your business. The Merchant Account Providers directory on firstcardpayments.com is a good place to start your search. You can also read reviews of merchant account providers on sites like CNET and TrustPilot. Once you’ve found a few providers that seem like a good fit for your business, compare their fees and terms before making your final decision.
Why do you need a high risk merchant account?
There are a few reasons why you might need a high risk merchant account. If you’re in an industry that is considered to be high risk, such as gambling, adult entertainment, or pharmaceuticals, you’ll likely need a high risk merchant account.
Another reason you might need a high risk merchant account is if you have a history of credit card chargebacks. Chargebacks are when a customer disputes a charge on their credit card statement. If you have a lot of chargebacks, your merchant account provider may label you as high risk and require you to open a high risk account.
Lastly, if you’re just starting out in business, you may need a high risk merchant account because you don’t have any established credit yet. This is common for new businesses and is usually not a permanent designation. If you think you might need a high risk merchant account, reach out to your merchant account provider or bank to see if they offer this type of account.