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What
are High Risk Merchants?
High
Risk Merchants are specific types
of businesses that have a higher
than normal charge back ratio and
risk of returns or customer sales
disputes. Usually more that 1% of
total monthly sales are considered
high-risk by most processors.
Other
types of high-risk merchants
There
are a wide range of businesses that
are considered high risk just by
the type of industry they are in
or as a group. The list is long.
Examples of this are - Membership
Websites that offer their customers
recurring billing such as weekly,
monthly, or yearly billing for access
to information, services, products,
etc.. Often the member/customer
cancels a membership but is again
billed or their account is charge
because of poor book keeping or
other reasons. This causes a chargeback
in most cases to be initiated by
a customer directly to their credit
card provider. If the 1% charge
back threshold is exceeded a pre-defined
alert is triggered and the merchant
account is red-flagged by the processor.
Normally an internal investigation
by the processing bank's security
team is triggered and the merchant
account becomes the focus of review
by the bank. ** This is just
one example of a high-risk merchant
business type.
Merchants
who run businesses that fall into
the high risk category have fewer
credit card processing options than
the normal low risk brick and mortar
merchant. Very few online ecommerce
merchant account providers are willing
to take the risk to support the
high risk merchants, and if they
do the charges applied are so high
that it is at times not possible
for the merchant to make an acceptable
profit.
Our
business is based on the ability
for us to provide a reasonable,
competitive rate to enable the high
risk merchant to accept all forms
of payment for their goods or services.
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