high-risk merchant account can be described as a subset of services which grant high-risk merchant account owners the access to allow their businesses to accept card payments from customers. Most often than not, the credit card processors will assign some merchants to one of the two categories; low risk or high risk (normal) accounts. As crucial as this high-risk merchant accounts can be, they tend to face limited choices in processors, higher fees and stricter contracts and this makes being labeled as high-risk sound awful. It is practically impossible for e-commerce high-risk merchant services to operate without accepting debit or credit cards. Always bear in mind that you need the services of a payment processor who will act as link between you, the bank and credit card networks.
A high-risk merchant business include but is usually not limited to; Adult Entertainment, Dating Services, Attorneys, Bail Bonding Services, Casinos, Gambling, or Gaming, Credit Repair/Debt Reduction Counseling, Pharmaceuticals, Online Drug Providers, Subscription Services (Magazines, Collectibles, etc.), Telemarketing, Calling Cards, VoIP and Travel, Accommodations, Ticketing Agents.
CHARACTERISTICS OF HIGH-RISK MERCHANT ACCOUNTS
The characteristic features of a high-risk merchant account make it stand out in the crowd. These specific characteristics include but are not limited to the following;
- Provision of customized solutions: Not just in special high-risk merchant accounts, any form of business requires customized solutions. These customized solutions provided for eCommerce high-risk merchant accounts tend to create the best avenue for unique business needs and can go a long way in boosting production. Unique business solutions are great at procession payment options on high-risk merchant accounts
Excellent level of customer service: One of the most important factors to consider when choosing the best high-risk merchant account is the level of professionalism, accessibility offered by the customer services. The customer service should be available when needed, and they should be able to provide the necessary guidelines on what needs to be done on the accounts to stay safer. High-risk merchant accounts possess an excellent customer service which cannot be underestimated. The customer service is available to provide the necessary help.
Room to grow: All forms of high-risk merchant account agency are aware of the need for your company to expand and grow thus increasing the needs and requirements. High management accounts are usually created with a high level of flexibility which allows it to grow together with your business. It has a large room to accommodate all your business needs thus giving you more time to focus on other aspects of running your business such as attracting more clients.
Provision of Added features: The best high-risk merchant account should have the basic ability to service what you want out of high-risk merchant.
EXCELLENT SECURITY : Safety of funds is one aspect of business nobody wants to compromise. It determines the financial health of your business. The best high-risk merchant account should provide top-line security and a proven track record of keeping the customer and business owner abreast with the latest information on how to improve this security. Always discuss the options available to you with the credit card company before proceeding to seek for high-risk merchant account instant approval.
What to Expect with a High-Risk Merchant Account
Having seen the reasons why you need a high-risk merchant account, it is good to have a look at some of the things you should expect after your high-risk merchant account instant approval. Please note, this is regardless of the provider you deal with because the privileges of accepting credit cards usually come at a price. The price of a high-risk merchant account will always be higher in many ways which include;
- Possibilities of Excessive Fees and Terms: Most of the services providers who specialize in high-risk merchants tend to charge higher-than-average fees with highly strict contract conditions. There are a few of the providers who specialize in backing merchant accounts that have been turned down by high-risk processors although this is done at a higher price.
- Presence of Predatory Practitioners: These scammers tend to target merchants who have shown desperation in their need for a merchant account. These scammers swing into action to offer help at a higher-than-normal price. Although high-risk merchant accounts possess a high level of security, it is recommended that you conduct your research, read customer reviews on the merchant, study Better Business Bureau reports and always update yourself with enough information from the fine print. You could also get your attorney to read the terms of the contract before appending your signatures on them.
- Revenue-Limiting Reserves: Payment processors tend to secure their payment by creating a revenue-limiting reserve so that they can get their money in an event when something goes wrong with your account.
High-risk merchant accounts offer three basic types of reserves which are;
- Up-front reserve: this is the type of reserve which grants the processor, the permission to withhold all funds from credit card transactions until a reserve balance is met.
- Rolling reserve: the providers tend to withhold only a percentage of your daily revenue for a limited period. All the restricted funds are released once the funds become available.
- Fixed reserve: also known as a capped reserved, it differs from the first two reserves since it sets the reserve to a certain limit and once this reserve cap is reached, the acquirer will not withhold any additional funds except in cases where the reserve is tapped or tampered with.
Apart from the forms mentioned above of demerits associated with owning a high-risk merchant account, it is critical that all high-risk business needs a special merchant account due to the level of security, flexibility, nd accessibility it grants to them. It makes fund management easier and highly secured.