What is a High Risk Merchant Account

A high risk merchant account is typically used by businesses that have a high turnover but deals with large amounts of cash and sales, which can easily lead to fraud.

For instance, online casinos are a perfect example of a business that would need a merchant account that was high risk. However, even some lotteries have these types of merchant accounts as do car rentals and even computer stores. Typically any business that is making a lot of money in short amounts of time is considered high-risk and therefore cannot be considered for a standard merchant account.

Costs of High-Risk Merchant Accounts

Unfortunately, for businesses that cannot get anything other than high risk merchant services, the fees associated with the account are much higher than a standard merchant account. The credit card processing on these high-risk accounts are also higher as well as setup fees. The merchant account charges more on the high-risk accounts because they are taking a risk by approving such an account.

Other Business that do Not Qualify for Standard Merchant Accounts

Some businesses that do not seem risky, still have to go with a high risk merchant account such as some travel companies, any business that deals with adult services, pharmaceutical companies, businesses that deal in e-cash, and online companies that offer hosting services to other website owners. Moreover, if the business decides to open up their company globally, then they are required to have a global high risk merchant account, which again comes with many more fees than does a standard merchant account.

Who Qualifies for a Standard Merchant Account

You may be wondering if merchant accounts are out to place everyone in a high-risk category, but actually more businesses have standard merchant accounts than the high risk merchant account. These include grocery store chains, movie theaters, and restaurants, to name a few. If you know your business needs high-risk merchant account processing, then you should do some research to make sure that you shop around because the pricing and set up fees on some are more than others. After all, why pay more than you have to simply to be able to accept various forms of payment from your customers?

Those needing a high risk merchant account often become frustrated with the additional fees, but in some industries, such as online gambling, there is no way around this because a merchant approving an online casino is taking a big risk in approving the account. Shopping around for the various high-risk accounts does help because when you begin comparing you may find one that charges much less than another or has no set up fees. Therefore, never be rushed to open an account, take your time and do some research to find the account that is best for you and your business.