High Risk Merchant Accounts

If you operate an online business with a higher risk of chargebacks and want to prepare credit card transactions, you need a high-risk merchant account. Exactly whatever is a high risk merchant account and how do you understand you want one?

To open a high-risk merchant account, you need to find an acquiring bank that will sign your business. However, to increase your chances of getting an account, it is better to ask a reliable payment service provider. At PayKings Team can make you approved today for low to high risk merchant accounts for B2B, eCommerce, or Retail at reduced rates and fees.

A high-risk merchant account is a payment account for companies considered to be at high risk for the banks. As high-risk companies are more prone to chargebacks, they come with the need to pay higher fees for merchant services.

If a business has a large potential for chargebacks, or history shows many chargebacks and refunds, the bank may be able to put a rolling reserve on your account. It is the amount that covers the possibility of chargebacks or fraud.

Before applying for a merchant account, it is good to know if you are a high-risk merchant or a low-risk account. Merchant account providers have their criteria for categorizing companies based on their potential risk, but there are several features for both groups of merchants.

So what are the differences between low-risk and high-risk trading account?

Note that each payment processor has its own set of guidelines, but some characteristics are common to all players in the market.
General indicators of low-risk merchants are as follows (but there are many other factors and this is based on the overall evaluation of compliance.

The more chargebacks a company brings, the higher the risk. Therefore, the most important factors that matter are the reputation and treatment history of the industry (it is recommended to keep your chargeback ratio lower than 0.9% of your total transactions).

Here are the overall characteristics of a high-risk retailer, but be aware that it is very different based on a particular payment processor's guidelines.

Who needs a high-risk purchase account? An example of high-risk companies in the travel industry, as various factors can cause cancellation. This usually ends up with multiple refunds and customers filing chargebacks. Some others are gambling, forex trading, and adult-themed sites, to name a few.

There are many other industries or business models that are prone to chargebacks, so here is the list of the most common types of businesses that need high-risk retailer accounts.

So if you run a business in any industry, you need a high-risk purchase account to accept credit card payments on your site. If you are a high-risk retailer, you will have to deal with the higher costs of a merchant account than regular merchants.

Speaking of fees, the hard truth is that high-risk retailer accounts cost more than accounts for low-risk companies. There are inevitable costs that you have to face, so you have to prepare to pay more in processing costs and account fees.

Though you should be knowledgeable that high fees for high risk merchant accounts were set as a standard many years ago, and today you can find payment processors that offer competitive pricing tailored to your business. 15% commission or even higher fees adhere to the dated approach. You don't have to get stuck in long contracts that run from three to five years. The same goes for extra costs.

Several high-risk payment providers may still charge an installation fee, a monthly and annual fee, or even a PCI fee, so read the contract correctly. There may also be an early termination fee when you want to close the account before the date of the contract. The termination fee information must be included in the contract, so be sure to read it carefully before signing the agreement.