A high risk merchant account is a merchant account that involves the processing of credit and debit card transactions in particular industries. A high risk merchant account is purposefully set up for businesses that provides goods and services that involve high chargeback possibilities.
High risk merchant account explained
When obtaining a merchant account, you will need to assess the amount of money being processed by your company, the nature of your business and where your clients are located, in order to ascertain which merchant account you will need to obtain. Some businesses are considered higher risk than others and it is therefore important to obtain the right merchant account for your business needs.
A high risk merchant account is an account that involves businesses within certain industries, including telemarketing, the travel industry and multi-level marketing, amongst others. It includes businesses that have very high turnover rates, along with large volumes of sales. In addition, a high risk merchant account tends to have enhanced risk or fraud, and therefore the rates and fees are higher than a standard merchant account, which is attributed to the higher risk taken by the merchant account provider.
If you are in a business that sells goods and provides services online within the industry sectors listed above, and have a high chargeback history, your business will be classed as a high risk business. Nevertheless it is still possible to obtain a merchant account.