If you do business online, then you must have heard of merchant accounts. For those who don’t know the meaning of merchant accounts; these are business accounts given to normal or low risk business owners by merchant service providers to use for their payment processing.
But what is a high risk merchant account? And why are they referred to as “high risk”? High risk merchant accounts are accounts issued by high risk credit card processors to businesses deemed risky in terms of chargebacks and many other factors. Traditional banks or any other low risk merchant account provider may view you as high risk for the following reasons:
- If you’re on either the MATCH or TMF lists
- Fear of taking a huge loss on your business account in the worst-case scenario as a result of poor personal credit or insufficient company finances unable to hold up the volume of sales you are applying for
- Your business falls in an industry with a history of high levels of chargebacks. The sponsor bank fears that after using too many resources supervising your account, they’ll eventually have to terminate it when/if you exceed the set chargeback thresholds
- The product or service you offer is susceptible to long chargeback liability periods. E.g. for annual membership services that allow customers a span of up to 6 months from the date of completion of service.
All merchants branded risky used to have a difficult time finding a merchant account until High risk credit processors came to their rescue. So if your business falls or is related to any of the businesses below, then you need a High Risk Merchant Account
- Electronics (sold online)
- Annual memberships
- Adult products/ adult related services
- Bail bonds
- Business opportunities
- Online dating sites
- Software downloads
- Firearm dealers
- Mail order or telephone order
- Timeshare Advertising
- Travel services
- Debt service
- Home-based businesses
- Horoscope/Fortune telling
- Multi-level marketing (MLM)
- Online auctions
Luckily, these days there a number of high risk merchant service providers to support all risky industry categories. So you being one of them is no reason to give up on your business venture.
Electronic payments expert, Blair Thomas, co-founded eMerchantBroker in 2010. His passions include writing/producing music, and travel. eMerchantBroker is America’s No.1 High risk Merchant Account Company serving both traditional and high-risk merchants.