Merchant accounts are required in order for a business to accept credit card payments. As a merchant, there are two places you can obtain a merchant account; a bank, or a third party provider. For online pharmacy merchant services merchants the most popular, in addition as in most cases cost effective, source is from a third party merchant account issuer.
A high risk merchant card account is required by businesses that, when compared to a ‘traditional’ goods/services business, have a a higher risk of:
High quantity of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized to be a high risk are:
Merchants Location – Some merchant account providers won’t accept merchants from certain countries.
The Product/Service the merchant sells is unlawful in some jurisdictions.
Merchant Credit standing – Some providers won’t accept merchants with poor or no credit track record.
Due towards the high risk classification, most banks will not provide your free account to those involved with a riskly industry (such as adult entertainment, replica goods, pharmacy etc). Therefore some outside providers offer their services to both general merchants and high-risk merchants.
Merchant account providers that are developed to service high-risk merchants will normally provide a higher level of fraud protection, so as to decrease might their merchants incur. However, in order to cover the advanced level of risk, rates high risk merchant account will continually be higher than their lower risk counter-parts.
When purchasing a high risk merchant account, there exist several factors to be able to take into consideration. Rates will be one of the most basic factors, this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. You will need to take into account fraud protection, customer service and reporting available you as a merchant.