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HomeInsights & AdviceFinding the high risk merchant account to fit your high risk needs

Finding the high risk merchant account to fit your high risk needs

by John Saunders
12th Jan 21 10:29 am

The merchant account is a contract between a company and a bank or financial institution. This contract ensures that the bank accepts payments for the products or services on behalf of the company. These merchant acquiring banks ensure that a merchant or business can accept payments from international customers for the products or services they deliver. Therefore, business accounts form a vital part of any e-commerce business.

There are two types of business accounts. First is the normal account, where the merchant can directly access the card and make sure they are a legitimate customer, so the risk involved is minimal. The second type of merchant account involves accounts where it is not possible to visually witness to the client. These types of accounts include adult entertainment merchants, online tobacco merchants, replica merchants, online gambling merchants, prepaid calling merchants, VOIP merchants, multi-level marketing merchants, or any transaction that is made with the physically absent client. In this way, the possibility of fraudulent activity is much higher with this type of business, which results in classifying this type of account as “high risk”. Naturally, these high-risk business accounts pose the risk of the dreaded chargebacks for the banks in question. Various investigations have shown that these high-risk processing transactions are more susceptible to fraudulent transactions.

These factors greatly reduce the number of banks willing to take on these high-risk processing accounts. These negatively affect the requesting business when setting up payment processing accounts. They are often faced with a situation where banks generally reject their request or impose heavy restrictions on account transactions, making normal business virtually impossible. Even if a merchant has established a payment processing account with a bank, he can never be sure that the relationship with the bank is secure. The bank could review its underwriting criteria at any time, and suddenly merchants are faced with a situation where payment processes negatively affect their business.

Today, many top-tier banks are ready to set up high risk merchant account. These accounts are highly personalized accounts. Banks study the system intensively and then draws conclusions about the transaction fees to be imposed. High-risk commercial acquiring banks take into account the technique the company uses to attract customers, the expected churn, and the types of customers that might engage with them. These banks also encourage merchants to open multiple accounts, ensuring a diversified payment process, and even if one account encounters a problem, the business can continue with the others active.

Imagine making your own purchase of a product only to find that the store will not accept your type of payment, that’s enough to lift your Hades. Nobody wants a very irate customer. A satisfied customer means a worthwhile sale, a potential future sale, and a great marketing tool. A happy customer usually tells friends about great products and services. So, always look to expand and update your trading options as much as you can, that includes applying for a high-risk merchant account. You will need it sooner or later. You can bet on

As the saying goes, you cannot achieve anything in life without taking risks; companies are looking for new lands that guarantee a healthy business. These companies may be a bit unconventional, but what counts in the end is the turnover that the company produces. Therefore, banks or financial institutions should study them carefully and try to help them go through the payment process, rather than classifying them as high risk and denying applications. Banks acquiring high-risk business accounts are indeed revealing in this regard.

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