High Risk Merchant Account
What is a High Risk Merchant Account?
Acquiring a high risk merchant account from one of these sources will facilitate easy processing of credit cards online for receiving payments due to the vendor rather quickly. In case a business is not considered as a high risk type it is rather easy to acquire a standard eCommerce merchant account, which can facilitate easy processing of credit cards and other such instruments.
Such an account can be obtained from a domestic merchant account provider such as a designated bank or a credit card processor or from any international/offshore agency engaged in similar activity. However, if a business has a high risk content, it is never possible to procure a standard eCommerce merchant account at all. A vendor operating a high risk business is never allowed to have his own high risk merchant account by bulk of the merchant account providers. Under such a condition the best course of action is to apply for a high risk merchant account from international or offshore sources.
Businesses Warranting High Risk Merchant Account
A high risk merchant account is invariably needed by a business that has a very high turnover with large volumes of sales and, tends to have enhanced risk of fraud. Even though there is a horde of such online businesses, which will warrant procurement of a high risk merchant account, the major ones are:
* Online casinos and other gaming/ gambling agencies including sports wagering.
* Adult services and products.
* Pharmaceutical products.
* Travel services.
* Telemarketing businesses.
* E-wallet and E-cash.
* ISP and hosting services.
* Online cigarette or tobacco vending.
* Online auctions and debt services.
* Online dating services.
* Online sale of replica products.
Some other products and services that are also considered as high risk online businesses and require high risk merchant accounts include:
* Lotteries.
* Amusement/recreation services.
* Automobile rental.
* Used automobile sales.
* Coin shops.
* Computer stores.
* Shopping clubs.
* Sale of telecommunications equipment.
* Cell phones and beepers.
* Gun dealers.
* Online custom jewelry sale.
* Water purifiers.
* Check cashing services.
* Collection agencies.
* Custom products.
* Detective services.
* Downloading of software.
* Escort services.
* Massage parlors.
* Hair restoration services.
* Weight loss centers.
* Home-operated business.
* Mortgage services.
* Pawn Shops.
* Horoscope/fortune telling services.
* Insurance Products.
* Meat provisions/freezer/lockers.
* Multi-level marketing.
* Educational seminars.
* Time share sales.
Cost of Obtaining a High Risk Merchant Account
The rates/fees chargeable for a high risk merchant account are relatively much more than a standard merchant account. A heavy setup fee is charged for the high risk merchant account whereas fees for the other type of accounts are very small, some of them with no setup fee at all. Similarly the credit card processing rates for high risk merchant accounts are also comparatively very high.
The reason for these high charges in respect of a high risk merchant account could be attributed to the increased risk taken by the high risk merchant account provider in approving the account. Another reason for the larger fees could also be assigned to the fact that high risk merchant account is not normally available with the domestic account providers.
The Last Alternative
In case, for some reason or another, a vendor could not manage to acquire a high risk merchant account in spite of best efforts, he can approach a third party credit card processor. He should be able to get such an agency to provide him with a high risk merchant account unless his business seemingly has more serious problems.
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