What Is a Merchant Account?
While running a business, you’ll eventually need a merchant account.
If you are doing business online, all your transactions will come through your merchant account.
The merchant provides efficient processing of payments. Electronic payments are sent through your terminal to the merchant bank.
They will check for available funds and provide a variety of security checks.
- Your business is charged .5% o 5% of the transaction amount.
- There will also be a $.20 to $.30 per transaction.
- Most merchants also require a monthly fee.
What is a High-Risk Merchant Account?
Many businesses are considered high risk and will require a high-risk merchant account.
There are a variety of factors that could cause your business to be high risk.
Online businesses, shops that have a high risk of chargeback, large average credit card transactions, and bad credit history could cause you to require a high-risk merchant account.
Examples of industries that are considered high risk include:
The travel industry, airlines, airplane charters, tour operators Hotels, restaurants, moving companies Antiques, auctions, electronics, pawnshops, Casino, gambling, adult-related, drug paraphernalia, vape companies, fantasy sports websites Bankruptcy law, debt collection, financial planning Social media services, SEO services, VoIP services Multi-level marketing, horoscope services.
There are many more high risks industries as well.
Not sure if your business is in a high-risk industry?
5 Star Processing can help.
Their team has years of experience helping companies get a merchant account that meets your needs and budget.
When do I Seek out a High-Risk Merchant Account?
If you are in a high-risk industry, you’ll need to seek out a high-risk merchant account.
Traditional merchant accounts will deny service to almost every high-risk industry.
If your average monthly sales volume is over $20,000 and your average credit card transaction is over $500, you’ll need a high-risk merchant account.
If you accept multiple currencies, your merchant will normally require a high-risk merchant account.
Do you offer subscription services, digital products, software downloads, or seasonal items? Your company will need a high-risk merchant account.
Chargebacks and Poor Credit Problems
If your company has an excess of charge backs or poor credit problems, you may need to seek out a high-risk merchant account.
Chargebacks can cause a variety of problems for online companies.
If you sell products online, you run a greater risk of accumulating chargebacks.
Stolen cards and credit card fraud is a huge problem.
Certain industries are prone to chargebacks and will require a high merchant account.
Does your business have credit problems?
If you’ve had problems acquiring a merchant account due to credit problems, it might be time to seek out a high-risk merchant account.
A high-risk merchant account might be your only option is your business has poor or bad credit.