What Is a High-Risk Merchant Account & How Does It Work?
High-risk merchants are those operating in industries that are more prone to fraud, financial failure, or chargebacks. The most popular high-risk merchants include weight loss products, nutraceuticals, telemarketing, adult entertainment, and online gambling. Those selling easily resalable goods, credit repair and debt consolidation companies, subscription-based businesses, and travel & ticketing companies also fall into the high-risk category.
The most common characteristics of high-risk businesses include:
- Appearance on the MATCH or TMF (merchant blacklist) list because of excessive chargebacks
- Business dependence on seasonality or periodic sales
- Poor or no credit history or a small history of credit card transactions
- Selling goods or services to customers in countries associated with the risk of financial loss or a high level of fraud
- Average monthly sales exceeding $20K and the average credit card transaction being over $500
You know what to do now !
If your business falls into the category of high-risk businesses, you can contact a provider of high-risk payment gateway or high-risk payment processors to open a merchant account online. Ideally, the high-risk merchant account provider should offer full-fledged solutions for merchants who already have a high-risk business and are looking for a high-risk payment gateway or those who are starting a high-risk online business. These providers can help these businesses with a wide range of traditional and alternative payment solutions, such as dynamic currency conversion, multi-currency processing, and White-label payment gateway solutions.
Why Do You Need a High-Risk Merchant Account?
A high-risk merchant account can be described as a sustainable payment solution for businesses that are prone to fraud, identity theft, and other risks. High-risk merchant processors offer services to high-risk businesses so they can easily accept payments in multiple payment methods and currencies while selling their products and services to customers across the world, including regions or countries that are considered high-risk.
High-risk merchant accounts are also useful to avail better risk management tools and strategies to significantly minimize the chances of chargebacks, money mismanagement, and fraud. Moreover, payment processors specializing in high-risk merchant account solutions also adhere to strict KYC norms and abide strongly by regulatory compliances in a fully secure PCI-DSS compliant environment. These account solutions can be used to accept different types of payments, including recurring payments. It also helps merchants handle high sales volumes or high-value transactions while receiving better chargeback protection.
We hope that this guide on high-risk merchant accounts was useful to you.