High Risk Merchant Accounts

Written by Samuel Wong
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High-risk merchant accounts are becoming more common in the host of services provided by credit card processors. High risk merchant accounts charge a higher per-transaction fee, higher transaction amount/percentage-based fees, and have more restrictive terms. There are several types of businesses that qualify for use of high risk merchant accounts, due to the nature of their clientele, industry, or extenuating circumstances.

Gambling websites, one of the most commonly defrauded of all merchant accounts, are often holders of high risk merchant accounts. Despite higher fees and more restrictive terms, these companies account for this in their highly profitable business model. Even though they may not retain as much profit as they would like, the only alternative for these companies is to accept checks or money orders. With today's publicized rates of fraud, many are leery of funding an online gambling account via these methods.

High Risk Merchant Accounts Offer Protection

Based on the clientele in bars, many liquor serving locations are eligible for high risk merchant accounts. The higher rates and fees are based on the possibility that a customer may not be fully aware of how much they are spending on their credit card, who is adding to their tab, and how much they left as a tip. All of these details come back, albeit fuzzy, the next day to the individual who can then initiate a chargeback, should he feel he was overcharged for any services.

For establishments or industries wherein there is a high risk of chargeback or fraud, high risk merchant accounts are their best and only option, for obvious reasons. Most establishments can justify these higher costs, based on the high profitability of their business. If this situation describes your business, look into these types of merchant accounts.

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