Understanding Merchant Account Fees: A Comprehensive Guide Introduction Let's face it: merchant accounts can be confusing. There are a lot of different types of fees, and you're not always sure what they'll cost. To make things even more difficult, different providers use different terminology to describe their rates. But as a merchant account provider ourselves, we know how to help our clients navigate these waters. We want to share some of our knowledge with you so that you can learn about merchant account fees—and how to avoid getting caught up in traps that could cost your business big-time money! What are merchant account fees? Merchant account fees are the costs associated with accepting credit cards. They can include interchange, assessment and monthly fees. Interchange: This is the price you pay to your processor for every transaction that goes through their network. It's regulated by Visa, MasterCard and American Express. The fee varies depending on which card...
high-risk merchant account
What is a merchant account?
A merchant account is a type of account, approved by a bank or financial institution, that allows businesses to accept credit or debit card payments from their customers. However, the type of business applying for a merchant account may affect the level of risk associated with that merchant account.
What is high risk merchant account?
Some business-models are more prone to chargeback in-respect to other standard risk accounts or they have a history of chargebacks, refunds, or frauds.
The bank in that case will categorize your business/merchant account as a high-risk merchant account which is basically a rolling reserve that will cover the possibility of chargebacks or frauds.
Which industries are commonly considered as high risk?
Okay, so there is no specific parameter on how anyone can calculate the probability of chargebacks or loss. However, some examples of industries considered as high risks.
Adult Industries - Payment processing for the adult industry which includes online adult entertainment, webcams, streaming media, & adult-oriented products.
Affiliate Marketing Industries - High volume payment processing for affiliate marketing networks.
Travel Industries - Payments processing for charters & tour companies, travel agencies, hotels, timeshares, cruise lines, airlines, and hospitality.
And the list can go on. However, every bank has its own criteria of categorizing business according to the potential risk they hold.
One important fact is recurring and subscription billings tend to have greater risk in comparison to one-time sales.
How a high-risk merchant account impacts your entity?
Well, speaking of this high-risk merchant account you should be prepared to pay extra payment processing fees or processing rates due to the risk associated with your merchant account. It is also possible that some providers may even refuse to work with you. It is also certain that you will be designated a limited amount of transaction since the risk associated.
It seems that running a high-risk business is hard and comes with many limitations. So, are there any benefits of having a high-risk merchant account?
Global coverage. As a high-risk merchant, you can grow your business performance by accepting transactions in multiple currencies and sell to clients outside countries considered low risk. This means you can access larger markets.
High chargeback protection. This means that you have bigger chances of keeping your merchant account in good shape. For instance, when a merchant with a regular account crosses the chargeback threshold, they even may end up with a terminated account. They need to look for a high-risk merchant account, which usually equals a pause in taking credit card payments.
What to look for when considering high-risk merchant account?
You should surely look for these features when you look for a high-risk merchant account
Accepted business models
Transparent pricing
Responsive support
Expertise
High-risk merchant account payment processor
Processing fees
Overview
As you can see, there are many reasons why your business can be considered a high risk. But if you set up a high-risk merchant account through a reliable payment platform, the process will be simplified without headaches.
Launching a Payment Gateway Services with eMerchantPro’s High Risk payment gateway Solutions makes your business streamlined. No bottlenecks, no hefty prices, and complete control of each module make the solution worth every dollar. eMerchantPro provides a dynamic solution for your business with a feature-loaded and secure payment gateway. A payment processing channel that is fraud protected with state-of-the-art Fraud Protection Tools. Get in touch with our expert Merchant assistance team today to get a personalized solution for your business!
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