Today many companies are applying for high risk merchant accounts because of the different nature of their businesses. There are many reasons why merchants are considered high risk. If you are in an industry that has a history of charge backs, you are considered high risk. Your bank feels they need to spend too many resources to manage your account and eventually have to turn you off when you exceed chargeback thresholds. Another reason can be when your product or service has a longer chargeback liability period. A merchant account is also considered high risk is if your account has in a high risk industry, for example, if you belong to adult or online pharmacy industry. Some examples of another type of businesses that qualify as high risk merchant accounts are Nutra re bills, online casino and poker, payday loans, VOIP services, debt service, telemarketing, travel services, Pc tech support, Anti-Virus software down loads, online dating websites, online auction sites, electronics sold online and more.
Any of the following features can turn a business into high risk merchant accounts.
- The sponsor of the business has poor personal credit
- The merchant sells expensive items like furniture, auto parts, etc.
- The merchant sells deliverable products such as a hotel reservation , ticket to an event , and more
- Businesses with traditionally high charge backs
- Memberships with automated recurring billing
- Companies with high sales volume without having recognized company financials to hold chargeback liability
While hiring a merchant account service provider, you will have plenty of options to choose from but many providers will require merchants to pay a high set-up fee. The whole process of selecting can be a perplexing experience for you. You should look for a merchant account service provider that serves your business’s customized needs. You should conduct an assessment to make a list of the services you require. While some services can be your standard requirements, you may also need add-ons like recurring billing. When you are evaluating the cost of the service, ask questions to find hidden and extra charges. Find out if they will require you to sign a lease or contract, If so, read the contract properly to understand the user terms before you start using their services.
Before you choose a merchant account service provider, learn everything you can about the company. Ask for references so that you can call them personally to find whether they were happy with the level of the services or not. Visit their websites to know more about their services and their customer service. Choosing the perfect merchant account service provider is critical to your business. So make a move sensibly.