Setting Up a High-Risk Merchant Account

Setting Up a High-Risk Merchant Account

A merchant account is a contract between a company and a bank. The merchant account enables businesses to accept credit or debit card payments.

If you are running an e-commerce business you need a merchant account to process payments.

Types Of Merchant Accounts

There are two kinds of merchant accounts:

First is the traditional account, where the merchant can instantly process the payment and be rest assured that it is a genuine client. In this case, the risk associated is minimum. Thus these merchants will fall under the low-risk merchant account category.

In the second kind of merchant account, it is not possible to visually recognize the customer. These kinds of accounts involve fun, online merchants, model merchants, multilevel marketing merchants, or any action that takes place with the customer not present. Underwriters consider these types of businesses in the high-risk category.

The businesses are categorized as high-risk merchant accounts based on the risk factor. Mainly because these businesses are more prone to chargeback or fraud.

Many types of research have confirmed that these high-risk processing transactions are more sensitive to dishonest dealings.

Is it possible to get a merchant account if the business falls under the high-risk category:

If your business falls under the high-risk category it is very difficult to find a merchant account. That’s because it is almost impossible to get a merchant account with a traditional bank. So these businesses need to apply for a high-risk merchant account.

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Note: High-Risk businesses usually face trouble where the banks usually reject their merchant account application or impose significant limitations on the account activities, which practically makes it challenging to handle regular trading.

If a merchant has set a payment processing account with a bank, he can never be assured that the connection with the bank is safe. The bank might update its underwriting rules anytime, and suddenly merchants will have to face issues where the payment methods do not favor their companies requirements.

Banks Are Adopting High-risk Merchant Accounts

Now, several top-notch banks have started providing high-risk merchant accounts. These accounts are incredibly personalized. The banks will examine the business type and then decide the transaction rates.

Note: High-risk merchant acquiring banks consider the company practices to attract consumers, the required turn-over amount, and the kinds of consumers that might engage with them.

These banks also support merchants to open various MID’s(Merchant Identification Number), thereby assuring smooth transaction processing.  If one account faces a problem, the business can continue with different active MID.

Conclusion:

There are several factors that determine if your business falls under the high-risk category. However, it is not impossible to get a merchant account. High-Risk merchant account providers such as iPayTotal can help you with a customized high-risk merchant account.

Questions? Visit us at www.ipaytotal.com or email us at [email protected] or call us at +44 800 776 5988. We will be happy to help you!