High Risk Merchant Accounts Types
Banks classify certain types of business as high risk merchant accounts. Statistically, high risk merchants have a greater likelihood of chargebacks and fraud, increasing the chance of financial losses for acquiring banks.
Companies in any industry with fast growing processing volume or high average tickets are also considered high risk merchants.
Other factors that determine a high risk merchant classification are: marketing and sales methods, product fulfillment or delivery times; targeted markets or geographic location of buyers; and recurring billing or membership sites.
High Volume High Risk Merchant Accounts
Rapidly expanding companies require payment processing to power growth. Many companies establish more than one account to diversify payment processing and mitigate risk.
Multiple merchant accounts can be load balanced on a single payment processing gateway, which simplifies account management and reconciliation.
Offshore merchant accounts combined with domestic processing offer international ecommerce companies a cost-efficient way to accept payments world-wide.
Digital Content, Downloads and Virtual Goods
Companies selling digital content downloads, streaming media, and virtual goods are among the fastest growing segments of ecommerce. Social networks, online games, MMOG, music, video, new media, software, and interactive entertainment benefit from multiple payment options on a single platform allowing digital merchants to maximize sales and minimize risk.
Over 50% of all travel reservations are now made online. Travel and hospitality is the world’s largest industry, with the World Travel and Tourism Council (WTTC), predicting revenues in excess of US$15 trillion by 2017. All segments of the travel industry can establish a high risk merchant account, including: transportation, hotel reservations; timeshare, membership clubs, vacation certificates; newsletters; travel agencies; tour operators and packages.
Infomercials and Direct Response
Fast growth is to be expected when an effective infomercial is aired or a direct response advertising campaign is launched. Successful products generate millions of dollars in revenues. Secure processing is the river through which cash flows. Offer both card and echeck payment to get more sales.
Hosting, ISP, Cloud Computing, SaaS, and Internet Services
Web hosts, domain registration, email, cloud computing and other internet based businesses have a recurring billing payment model. Recurring payments lets merchants accept payments monthly, weekly, daily or on-demand basis. Transaction updating is a great processing feature to protect your cash flow. While easily extending the lifetime value of customers to you.
Multilevel Marketing / MLM / Direct Sales
Multilevel marketing or direct sales companies have business global operations. Domestic and offshore merchant accounts meet the requirements for international distributor networks.
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The adult entertainment industry has long understood the importance of managing payment processing to minimize risk and maximize sales. Domestic and international banks provide excellent payment solutions for the adult industry.
Herbal Supplements, Vitamins, Pharmacies
Vitamins, herbal supplement, and pharmacies are good fits for high risk payment processing. Male enhancement, weight-loss, hair-growth and life style improvement products are fast growing businesses. Diversification of payment processing is the key to long-term success.
Online Games, Social Networks, Virtual Worlds
Online games and MMOG need high volume offshore merchant accounts to accommodate high volume processing volumes. Special offshore merchant accounts are available designed to meet the needs of online games and MMOG players, including sales of virtual assets, subscriptions, pay-per-play or time intervals and other innovative payment processing options.
VOIP and Telecom
VOIP and specialized telecom services are growing at unprecedented rates world-wide. Calling plans, cell phones, prepaid services, phone cards, wireless, GPS tracking, data communication services of all types benefit from offshore merchant accounts.
Most companies use a subscription billing model that drives processing volumes higher month-on-month.
High Ticket Product
Businesses selling electronics, jewelry, furniture and other high ticket items are classified as high risk because of potential risk of chargebacks. Secure merchant accounts are available that offer special advantages to merchants selling higher ticket items.
Coin dealers, art galleries, antique shops, and business selling unique products are considered high risk merchant accounts. These types of companies have rare or unusual products which are often high ticket items. Businesses in this category benefit from the expertise necessary to place high risk merchant accounts with the appropriate acquiring banks.
Charities and Non Profits
Charities and non-profit organizations can be considered high risk merchant accounts because there is no product or service being sold. In addition, fraudsters using false identities will sometimes make a “charitable” contribution to see if a stolen card has available credit.
Charities and non-profits flexible processing volumes to take advantage of increased giving during particular seasons or after catastrophic events.
Subscriptions, Memberships and Recurring
Businesses selling subscriptions or memberships are classified as high risk merchant accounts. Consumers can initiate chargebacks from the end of the billing period rather than from time of purchase. Therefore, acquiring banks have longer term contingent liabilities.
Subscription and recurring billing models grow very quickly month-on-month and merchants need processing volume to accommodate the growth. Specialized services to manage subscription, membership and recurring billing add value to your payment processing account.
Tickets High Risk Merchant Accounts
Tickets sales are considered high risk because the ticket is for a future event. Consumers may decide not to attend an event or not be able to attend creating a high risk of chargebacks. Acquiring banks classify ticket agents and brokers as high risk merchant accounts because of the potential liabilities associated with these types of businesses. Special features are available to protect the payment processing of ticket brokers.
High risk merchants have special payment processing requirements. If you are a business classified as high risk, it’s important to work with a merchant account provider that has the expertise necessary to get your account approved quickly and easily.
Are you a high risk merchant in need of payment processing solutions for your business?
Contact firstname.lastname@example.org today.