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, so in most cases cost effective, source is from a third party merchant account organization.
A high risk merchant account is required by businesses that, when compared to a ‘traditional’ goods/services business, have a a higher risk of:
High sum of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized for 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 report – Some providers will not accept merchants with poor or no credit foundation.
Due to the high risk classification, most banks will not provide an account provider to those in a perilous industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some vendor providers offer their services to both general merchants and heavy risk merchants.
Merchant account providers which developed to service high-risk merchants will broadly speaking provide to the next stage of fraud protection, so that you can decrease might their merchants incur. However, in order to cover the advanced level of risk, rates high risk merchant account will continually be higher than their lower risk counter-parts.
When hunting for a high risk merchant account, there are several factors to be take under consideration. Rates will be one of the most important factors, this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and recurring fees. Require need to adopt fraud protection, customer service and reporting available a person as a merchant account for online pharmacy.