For various kinds of companies to accept payments and help their visitors access their debit or credit card, companies need a merchant account. However, for companies that are classified as companies functioning in high-risk industries need to pay more for their merchant accounts and for the service in comparison to the fee paid by other companies that are not potentially high-risk.

Why do high-risk merchant accounts exist?

A high-risk merchant account is required by those companies who are at high risk of:

  • The high rate of charge-backs
  • The high volume of sales
  • Bankruptcy
  • Fraudulent Transactions
  • The high rate of refunds

Furthermore, there are other reasons why businesses may be considered high-risk, and they are:

  • Because of the product or service: These services or products could be illegal in some jurisdictions.
  • Merchant locations: some merchant providers do not accept merchant account requests from companies located in certain countries.
  • Merchant Credit history: Some providers for merchant accounts do not accept requests from companies with poor or no credit history.

There are various businesses that are considered as high-risk. These companies or businesses may deal in:

  • Replica goods
  • Adult content,
  • Pharmaceutical supplies and much more.

Furthermore, the risk is also calculated by the presence of a risk of the websites and the companies. More the chances of hackers on your company’s website, the higher the risk.

How can one get a merchant account?

When it comes to finding merchant accounts, there is no shortage for providers and banks. Both online providers and banks offer to help businesses that are not classified under the high-risk radar. However, for those companies or businesses that do fall under high-risk industries, the choices for accounts are extremely low.

Most banks do not offer any options, there may be some, but most of them are too expensive. Furthermore, there are multiple online providers that offer high-risk companies or businesses a choice of merchant accounts.

Furthermore, these high-risk accounts come with higher fees, which makes the growth of your business a bit hard. Additionally, you may find it hard to find the apt ROI for your business. Along with this, the fact that most companies think twice before offering you a merchant account makes matters worse for all businesses.

If you are looking for a high-risk merchant account, here is how you can find the correct provider for your business:

  • Know your providers before you select one.
  • You should always compare the fees and the price of the account.
  • Additionally, have a look at the money you have. Most likely, you will need to have a reserve of money to pay for your merchant accounts.
  • What’s more is that understand the basics of merchant accounts and high-risk accounts to know what works for you.

With that being said, find the best suitable account for your business only after you do research. Understand your market and find the apt service provider for you. Furthermore, make sure you read all the documents carefully before an agreement.

Author's Bio: 

30+ acquiring banks for high risk, MOTO & recurring payments from 0.95% Global e-commerce and high risk merchant services.