Businesses who wish to accept credit and debit cards need to open up a merchant account. A merchant account is basically a contract in which a bank extends a variable line of credit to a merchant, who can then begin accepting card transactions from major credit card companies. Obtaining an account is basically as simple as finding a bank or other institution that offers them, applying for an account and completing the signup process.  

However, as any high risk merchant will tell you, the reality of signing up for an account is not always so easy. There are two different types of merchant accounts: high and low risk; and the process of applying for and obtaining each of these accounts is very different. 

The Need for High Risk Merchant Accounts

Any business has the goal to minimize risk and maximize profits, right? Well, banks and processors are not different; which is why they have established a high risk category for certain types of merchants. Merchants that deal with high volume sales, phone sales, and eCommerce are likely to be designated as “high risk” because they might have a high rate of chargebacks. Chargebacks occur more often when the merchant does not actually see and swipe the credit card, so traditional retail merchants are able to avoid a large percentage of them, whereas Internet merchants are not. Further, many of these businesses function within industries with reputations for low product or service quality, minimal authenticity and order fulfillment failures. 

In order to provide high risk merchants with accounts, and protect themselves at the same time, high risk processors have created accounts that allow for the possibility of chargebacks. These accounts offer the same services as low risk accounts—transaction processing, automatic deposit, address verification and fraud prevention—but they may differ in the following ways: 

·         Higher transaction fees

·         Higher monthly fees

·         Security deposits, which are necessary to cover inevitable chargebacks

·         Limits to processing volume 

Some merchants who are limited to applying for high risk accounts become frustrated with their limited options and wonder if they will ever be able to apply for a low risk account. The reality is that if your industry is well established as a high risk category, you will likely require a high risk merchant account for the life of your business. If, on the other hand, your credit history and business practices are the reason for your high risk designation, you may be able to make responsible choices in the future and qualify for a low risk account in the future.

High Risk Processor specializes in High Risk Merchant Accounts, High Volume Merchant Accounts and Offshore Merchant Accounts. High Risk Merchant Accounts could include the following industries: mail order, telephone orders, adult entertainment, MLM businesses, dating and escort services, outcall services, travel industry companies, telecom, timeshares companies, herbal, vitamin and diet supplements, subscription services, membership services and recurring product clubs, ticket sales, MLM accounts, multi-level marketing, bail bonds, gun and pawn shops, water filtration systems, collection agencies, auto rental agencies, rare coin and collectible shops, custom design items, computer software sales and service, detective services, door to door businesses, massage parlors, hair restoration services, cosmetic surgery businesses, high-end ticket sales, high volume merchants, home based companies and  telecommuting organizations, fortune tellers, infomercial merchant accounts, insurance and personal investment products, custom jewelry sales and repair, phone sales and internet businesses, educational institutions, personal seminars, sports collectibles, used auto sales, water purifier sales, weight loss centers, international merchants, companies with high chargeback rates, and others.