The Complete Guide to High-risk merchant account providers in the USAPosted by eMerchantPro on October 20th, 2021 What is a high-risk merchant account?A high-risk merchant account is a business account or merchant account that allows the business to accept online payments though they are considered to be of high risk nature by the banks and credit card processors. The industries that possess this account are Adult Industry, Travel, Forex trading business, Multilevel Marketing business. High-Risk is the term that is used by the acquiring banks to signify industries or merchants that are involved with the higher financial risk. Who needs a high-risk merchant account?If you can match your business with any of the below-listed conditions, then it is suitable for you to take the Merchant Account Service Provider in USA .
What are the differences between low-risk and high-risk merchant accounts?When you start a new business you are going to start accepting credit cards. And when you do it, you are going to be classified under two categories: a high-risk or low-risk merchant account. So what is the difference between a low-risk and high-risk merchant account? Being tagged as a high-risk merchant account means that the payment service provider will consider you are at high risk of having higher chargebacks and refunds on your credit card transaction while with the low-risk merchant account, you are considered to be less prone to chargebacks. Here are some of the attributes from both the low-risk and high-risk merchant account.
High-risk merchant account feesSetup FeesInitially, you are required to pay the initial setup cost whether you are a high-risk merchant or a low-risk merchant. This is the fee that is charged for integrating the services to the merchant application. Though, high-risk merchants need to pay extra than the traditional merchants. Discount feeThe discount fee has simply two models associated with it. First, we will take MDR Merchant Discount Rate (MDR) is simply calculated based on the percentage of your turnover. While the other model is the Interchange Plus pricing model which is completely transparent which reflects how much the processor is making off you as profit. Authorization FeesWhenever a transaction is initiated there is an authorized fee to validate that transaction. If the card information is authenticated then the issuer bank allows the transaction to process and the transaction enters the settlement phase. If the transaction fails for any reason this fee is still charged even as the declined transaction. Chargeback feeA chargeback fee is a cost charged by your acquiring bank. When a chargeback happens, the merchant is hit with the chargeback fee, which is typically ranged from to 0. The more you get the chargeback higher will be the fee. If you have higher chargeback in a short duration of time then you could probably lose your merchant account. So how you can prevent chargebacks? The best way to get rid of the chargeback is to stick to the policies and guidelines of each payment processing network. It may involve adhering to the PCI rules and current security standards. How do I apply for a high-risk merchant account?The merchant with varying needs requires different payment solutions for their business. A merchant classified as a high-risk business has distinguished needs from the merchant who is classified as the standard risk. So depending on the nature of the business, the requirements vary. Now financial institutions don’t provide the flexibility to merchants that are associating with higher risk hence they don’t easily provide the payment gateway facility to high-risk merchants. Even though the merchant can get the required services from the dedicated service provider. Certain documents need to be submitted at the time of applying for the payment gateway services. These documents are:-
The service provider will allow you to have payment processing facilities within 5 to 7 business working days. Once you submit the required documents to them. The pros and cons of a high-risk merchant accountThere are various Pros and Cons associated with the high-risk merchant account. Let’s check them out. Pros
Cons of High-Risk Merchant Accounts
What to consider when looking for a high-risk merchant accountCertain things need to be considered while looking for a high-risk merchant account facility. Support: The merchant needs to have support from the service provider. In case if something goes wrong you can rely on your partner. Prices: Prices may vary from provider to provider. Ensure that you are not paying any extra or hidden costs. Professionalism: When getting in touch with the payment company, you need to find out for how long they have been in this business. Get to know the need of your business so that you can avail the best payment services from the service provider. If you are looking for a Merchant Account Service Provider in USA then eMerchantPro is providing a unique payment solution to the merchants when it comes to high-risk business. Like it? Share it!More by this author |