High-risk merchant accounts are payment processing accounts used by businesses for example if you running an online business that has a high risk of refunds and also you wants to process credit cards transactions, then your business needs a high-risk merchant account.
If your business comes under the risk of chargebacks and the history of the business shows many chargebacks and refunds, in this scenario the bank can keep rolling reserve on that account. It is that amount, the bank will cover in case of refund or fraud.
If you apply for a merchant account then it is necessary to clarify whether you are a high-risk merchant or a lower-risk merchant. If you need a high-risk merchant account for your business then you can expect to pay more for each processed payment. You may be charge 1-2% more per transaction in a high-risk merchant as compared to the low-risk merchant account. But if you don’t want to pay more per transaction fees then you can use a merchant like Paypound merchant account. Because Paypound provides the best high-risk merchant services at an affordable price.
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Difference between high and low risk merchants?
Every payment processer has its standard and set of guidelines. But some characteristics are common between all merchant account service providers.
You consider for low risk merchant when(Some general factors):
- Less than $20,000 processed monthly.
- When your credit card transaction average is less than $500.
- If you belong to low risk industry.
- Almost zero chargebacks ratio.
- The country in which your company operates business comes under the low risk like USA, Canada.
As I already say if your business has a high risk of chargebacks then you come under high risk merchant. Because the main factor that matter is your business industry reputation and its processing history.
Some general characteristics of high risk merchants:
- Higher than $20,000 processed monthly.
- The credit card average transaction is more than $500.
- Bad credit industry and high chargebacks.
Benefits of high-risk merchant account:
You have a better chance of maintaining your merchant account in excellent shape if you have a high-risk merchant account. When a merchant has a long history of refunds and surpasses the chargeback limit, their account may be canceled. It’s easier to keep a high-risk merchant account in excellent working order with a high-risk processor. However, this does not imply that you may continue to ignore repeated chargebacks.
With high-risk merchants, you may expand your company operations internationally by accepting a variety of currencies from diverse low-risk nations. This worldwide reach might help you expand your company in new directions. Access to the global market involves a significant level of risk. Low-risk merchant accounts, on the other hand, have many limitations and are restricted to domestic use only.
Conclusion: As you can see, why do businesses need a high-risk merchant account. So if you want to create a high-risk merchant account with a reliable payment platform then chose a Paypound merchant account is best for you. You can mail them – firstname.lastname@example.org and directly call them – +44 800 832 1733.