High Risk Merchant Account and How it works?

A high risk merchant account is required by businesses that are at a higher risk of chargebacks and frauds. High-risk merchants often pay more processing fees than usual to reimburse for the risk involved in their business.

Let’s understand more about high-risk merchant account and how it works. 

A payment processor marks a merchant’s account high risk if your business is at high risk of returns, fraud and chargebacks. There are plenty of reasons this could happen—you might be a new business that hasn’t processed payments before or has a likelihood of fraud due to controversial products. 

A high-risk merchant account is required to pay high processing fees to compensate for the risks. 

Reasons your business may be considered high risk: 

There could be many reasons a payment processing platform might consider you a high-risk merchant. While some reasons are obvious, others could be more nuanced. Every provider has a different set of standards for high-risk merchant accounts, here are some common ones: 

 

  1. Low credit score 
  2. High-risk industry 
  3. New Merchant 
  4. Accepting international payments 
  5. High transaction volume 

Types of businesses considered high-risk 

It is better to understand ahead of time whether your business comes into the list of high risk so that you can plan accordingly. Some common businesses that fall under this category include: 

  • Electronics and furniture store 
  • Travel including vacation, cruises and airlines planners 
  • Adult Industry 
  • Gambling 
  • MLM (multilevel marketing) 
  • E-commerce 
  • Online dating 
  • Debt collection 
  • Subscription services 
  • Vape, CBD and E-cigarette shops

 

If you’re seeking professional help from a high-risk merchant account processor, visit www.highriskmerchantaccount.us

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