High Risk Merchant Processor
Merchant account is a contract between a business and a bank or a financial institution. This contract guarantees that the bank accepts payments for the products or services on behalf of the business. These Merchant acquiring banks guarantees that a merchant or company can accept payment from international customers for the goods and services they deliver. Thus merchant accounts form a vital part of the E-commerce business.
You will find two kinds of merchant accounts. First is the normal account, where the merchant can directly access the card and ensure that it's a legitimate customer, thereby the risk involved is minimal. The second sort of merchant account involves the accounts where it's not possible to visually testify the customer. These kinds of accounts include adult entertainment merchants, online tobacco merchants, replica merchants, online gambling merchants, pre-paid calling merchants, VOIP merchants, multilevel marketing merchants, or any transaction that takes place with the customer physically not present. Thereby, the possibility of fraud activity will be much greater with this kind of business which results in classifying these kinds of accounts as "high risk" ones. Naturally, these high risk merchant accounts present the risk of the dreaded charge backs for the banks in question. It has been proved by various researches that these high risk processing transactions tend to be more vulnerable to fraudulent transactions.
These factors considerably reduce the number of banks prepared to take up these high risk processing accounts. These adversely affect the applying company in setting up payment processing accounts. They often come across a situation where the banks generally decline their application, or impose high restrictions on the account transactions which virtually makes it impossible to conduct normal business. Even if a merchant has established a payment processing account with a bank, he can never make sure that the relationship with the bank is secure. The bank might revise their underwriting criteria anytime, and suddenly merchants are facing a situation where the payment processes adversely affect their business.
Today, many top notch banks are ready to establish high risk merchant accounts. These accounts are highly personalized accounts. The banks study the system intensively and then draw conclusions on the rates of transaction that should be imposed. High risk merchant acquiring banks take into consideration the technique the company uses to draw customers, the expected turn over as well as the types of customers that could to take part in them. These banks also encourages merchants to open up multiple accounts thereby ensuring a diversified payment process, and even if one account encounters an issue, business can proceed through the other active ones.
As the saying goes, you can't achieve anything in life without taking risks; companies are on the look-out for novel grounds that ensures a healthy business. These ventures may very well be a little unconventional, Keep Reading but what counts eventually is the turnover the company produces. Therefore, banks or financial institutions should study them carefully and try to help them carry out the payment process, rather than classifying them as high risk and denying applications. The high risk merchant account acquiring banks are in fact eye-openers in the regard.
