Posted by admin on Dec 24, 2010


High risk merchant accounts have similar pricing component as non-risk high risk accounts.  The main difference in pricing elements is reserves, which are required for high risk accounts but are generally not for a non-high risk accounts.

Here are 6 elements which comprise rates for high risk merchant accounts.

  • Discount rates.  A discount rate is a fixed percentage of the value of each transaction processed through a high risk merchant account.  Generally, an acquiring bank that accepts a high risk merchant account will charge a premium to cover the increased risk associated with processing.
  • Transaction fees.  A transaction fee is a flat amount per transaction.  High risk merchant accounts include more extensive fraud fighting tools, which can drive up the cost per transaction compared to non-high risk merchant accounts.
  • Monthly statement fees.  The monthly fee is usually similar for high risk merchant accounts and non-high risk merchant accounts.  Be wary of companies which charge expensive monthly fees because these are simply extra profit to the provider and no benefit to the merchant.
  • Gateway fee.  A gateway is a secure connection between high risk merchant accounts websites and the processing network.   In some cases a high risk merchant will connect directly to a payment processor.  In this instance, no gateway fees apply.
  • Setup fees.  In most instances high risk merchant accounts in the US do not have a setup fee.   Some international banks assess a small setup fee once the high risk merchant account is approved, before live processing begins.
  • Reserves.  Reserves are funds set aside against potential chargebacks in high risk merchant accounts. Reserves for a high risk merchant account range from 5-10%.  Reserve accounts can be renegotiated once high risk merchant accounts have established a payment processing history with the bank.

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