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What are high risk merchant account services and how does it work?

A high risk merchant account is a type of payment processing account that is specifically designed for businesses that have been deemed as “high risk” by the credit card companies. This could be due to a number of reasons, such as the nature of the business, the size of the business, or the history of the business with regards to credit card processing.
Due to the increased risk associated with these businesses, credit card companies often require them to pay a higher percentage of transaction fees and can also be more restrictive in terms of the products and services that they are allowed to offer. In order to get a high risk merchant account, you will need to work with a payment processing company that specializes in this type of account.
There are a number of benefits to using a high risk merchant account, including:

  • Increased acceptance rates - since credit card companies are more likely to accept transactions from businesses that have a high risk merchant account, you will be able to process more payments through your website.
  • Reduced processing fees - since the credit card companies are taking on more risk by working with high risk businesses, they will often charge lower processing fees.
  • More product and service options - thanks to the increased flexibility that is often offered to high risk businesses, you will be able to offer a wider range of products and services on your website.

What are the disadvantages of high risk merchant account services?
There are a few potential disadvantages of using a high risk merchant account, including:

  • Higher processing fees - as mentioned earlier, the credit card companies often charge higher processing fees for businesses that have been deemed as high risk.
  • Restrictive product and service options - as mentioned earlier, the credit card companies can be more restrictive in terms of the products and services that are allowed to be offered by high risk businesses.
  • Increased chance of chargebacks - since there is an increased risk associated with high risk businesses, there is also an increased chance of chargebacks. This means that you will need to be prepared to deal with the financial consequences if a customer disputes a charge with their credit card company.

Overall, using a high risk merchant account can be a great way to increase your acceptance rates and reduce your processing fees, but it is important to be aware of the potential disadvantages that are associated with this type of account.
If you are a business that has been deemed as “high risk”, it is important to work with a payment processing company that specializes in this type of account. By using a high risk merchant account, you will be able to take advantage of the many benefits that are associated with it, including increased acceptance rates, lower processing fees, and more product and service options.