High Risk Merchant Account Companies

When you run what banks consider a “high risk” business, you need a merchant account specifically tailored to mitigate risk. High risk merchant account companies setup accounts to help businesses who struggle to get a merchant accounts from regular banks. These high risk accounts may cost more to set up initially, but they will save you money in charge backs, returns and fraudulent purchases later.

Lots of online businesses are considered high risk because of their relative anonymity and because the customers are more likely to commit various fraudulent transactions. Banks tend to shy away from these types of businesses, and the owners can have a hard time finding companies to process their transactions.

A merchant account is very similar to a bank account, but it acts as a line of credit for a business. A merchant account allows a business or individual to accept credit and debit card payments. The card transaction transfers money from one account to the other using a payment gateway to send information from one bank to the other.

When you use high risk merchant account companies, extra safety measures are put into place to make sure that the payments are valid. Merchant settlements are usually delayed when using a high risk account to offset the risk of fraudulent transactions.

High risk merchant accounts will slowly release your money over time while keeping some in reserve to cover any fraudulent transactions that may occur. Usually this money is held anywhere between 30 and 180 days before it is released. Once the reserve time has passed, the money gets sent back to the business or organization.

This process stops people from using stolen or fake credit cards on your site. When you use a regular merchant account and this type of fraud occurs, your business has to reimburse the bank its cost and any fees associated with the transaction. This can put a huge burden on business owners, especially if they are not prepared for the extra costs.

If business check processors work with a bank and has too many of these transactions, the bank will close their account. It is important to get a high risk merchant account, especially if you do not want to wake up one morning with no way to process payments.

It is possible to negotiate rates with high risk merchant account companies based on many factors. A business owner should always request many quotes from different providers before they choose to work with one company.

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