High Risk Merchant Account
In order to compete successfully businesses today need be able to accept payments made by credit and debit cards. To allow transactions using credit cards businesses must have a merchant account. But some businesses such as coin shops, software sellers, cosmetic surgeons, insurance brokers, investment brokers or many other businesses are considered high risk businesses. Because of the nature of their activities they cannot qualify for a regular merchant account. They must use a high risk merchant account.
Even though high risk businesses must pay higher fees for the processing of credit card payments, the high risk merchant account offers them the ability to accept credit card payments. This type of account offers many benefits to high risk businesses. These benefits are:
• The business can function even when it may have many cardholders wanting a refund.
• Customers can pay online, by phone or mail order.
• Merchants do not have to process their credit card sales within a specific limited time frame.
• Businesses may be located outside the United States and still accept credit cards.
• Business can accept credit cards denominated in a variety of currencies.
• Location does not prohibit the business from accepting payments from credit cards.
• A business is permitted to function even if it has a poor credit rating.
• There is no penalty if it a business does a high volume of sales.
• New startup business have the chance to compete with older, established businesses.
The analysis process that banks use to evaluate and eventually categorize a business as a high or low risk business is in fact a useful tool for businesses. They will alert the business to the facts and potential problems they must guard against in order to protect their company. Some of these problems are customers not being happy with the service or having unfulfilled expectations. Other problems might be delivery terms not being complied with, use of fraudulent or stolen credit cards or unclear refund and return policies. Needing to use a high risk merchant account forces a business to be very careful and very aware the risks in its business.
These types of accounts do have a lot to offer a business that might otherwise not be able to function due to the nature and risk involved with them. Any business owner that is having a hard time finding a company that will process their payments may want to consider a high risk merchant account for their company.
