subject: High Risk Businesses in Merchant Account Sales [print this page] High Risk Businesses in Merchant Account Sales
If you are planning to apply for a merchant account, you need to assess whether your business is considered as a high risk business inmerchant account sales. So, how would you know if your business is not a desirable candidate for a merchant account?
Basically, there are industries and specific businesses that are immediately considered as unacceptable merchants inmerchant account sales. There are numerous reasons for this. First, of course, is the risk you pose to their company, and second, there are legality issues. Some businesses cannot accept credit cards because of local and in rare occasion, national laws.
For instance, merchant accountsalesare impossible if the business is dealing with illegal products (illegal drugs or unregistered firearms). Gambling sites also cannot process credit card transactions due to national laws preventing the use of credit cards in such sites.
Meanwhile, there are others which are not deemed unacceptable, but are considered as high risk. Online movie providers, those engaged in the adult entertainment industry, online magazines, and video games, for example, are considered as high risk merchants. The problem here isn't whether the business is legal or not. Here, it is the chargeback that makes the business a risk.
So, what does it mean if a business, according tomerchant account salesprotocol, is unacceptable or high risk? Does it mean the business cannot get a merchant account? Obviously, this isn't the case, although the set-up is different from the usual.
Many financial institutions can still offer a high business an account, granted that the business has a superb sales track record and is willing to give a reserve. The reserve is a percent of the monthly charge volume, stored in escrow, and deducted only when the business comes across with chargeback problems. There are also third party processors that provide business in these industries with credit card processing feesfor a price.
There are manymerchant account salesoptions for businesses that are in unusual situations (such as being in an industry considered as high risk). One only has to stop for these options.
