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What are high risk merchant accounts?
High risk merchant accounts are specialized merchant accounts that are set aside for businesses that are considered high risk. A high risk business is one that is more likely to encounter fraud, theft and chargebacks as a result of the type of products or services being sold. These incidents involving fraud, theft and chargeback are not only time consuming, costly and inconvenient to the business owner, but they also involved the merchant account provider, and cost them their time and often their money as well. High risk merchant accounts are set up to accommodate some of these risks.
Who is eligible to apply for high risk merchant accounts?
Any type of business that is deemed high risk but is operating a legal operation will be eligible for a high risk merchant account. As stated earlier in this article, a high risk business is one whose products and/or services result in a high percentage of fraud, thefts and chargebacks. Some business types that fall into this category include adult stores and websites, payday loan companies, car insurance companies, travel agencies, amusement parks and casinos.
Please note that while being a high risk business means you are eligible to apply for a high risk merchant account, this does not automatically guarantee approval. There are other factors considered when processing merchant account applications.
