High risk merchant accounts are for business types deemed high risk when compared to the average business type. The risk of chargebacks is usually higher in these business types and they are deemed “Undesirable” by most merchant account providers. The risk for the merchant account provider is that many chargebacks could come through the account and the merchant may not have the funds available to cover each chargeback. In this situation, the merchant account provider may be left holding the bag.
The amount of acceptable risk will very for each processor. Some may accept more risk than others. Typically you may be accessed a higher rate and/or you may have to have a “Reserve Account” set-up to insure that you can cover all potential chargebacks that may be assessed against your account. Further keep in mind the “Excessive Chargeback Rule” set forth by Visa & Mastercard. Under this rule, if your chargebacks exceed 1% of your monthly volume, your account must be closed.
Here is a small list of business types which may be considered “High Risk”:
Adult Products
Bail Bondsen
Coin Shops
Computer Sales
Door-To-Door Sales
Gun Sales
Insurance Products
Kiosks
Multi-Level Marketing
Pawn Shops
Pharmaceuticals
Seminars
Time-Share
Travel Sales
Used Car Sales
Water Purifiers
This is a partial list of merchant types that may find it hard to get approved for a merchant account.
If you are having trouble getting a merchant account, please call me to discuss your options.
MARK SANDS
http://www.usa-merchantaccount.com
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