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High Risk Merchant Account
With a merchant account the account holder receives a bundle of payment processing services including the necessary hardware and software for accepting card transactions. When a customer makes an online purchase from the merchant’s website – the payment gateway facilitates the accepting of the payment details and fraud checks – the funds arrive in the merchant account and when the payment is approved by the payment gateway they are sent to the merchant’s business bank account at an acquiring bank. Merchants have no control over a merchant account, it is simply a holding place for funds until the transaction is approved.
Best High Risk Merchant Account Providers
There are no strong guidelines for categorizing which account providers offer better services than their competition. The nature of the market is highly specialized, so that the offering is geared specifically towards the type of activity that is being offered by the customer. Although all are treated as high risk by the conventional banking services, there are in fact many differences between them and most of the merchant account providers we list below have specialized their offerings toward just a few sectors of the broader market.
It’s also important to distinguish between high-risk companies and high-risk activities. High risk companies are ones that have a bad credit history, or perhaps have not been in business for long enough to have established sufficient history of good banking practice. Such companies are labeled by banks as high risk regardless of the type of business that they engage in. On the other hand, some types of business activities are labeled by the banks as high risk, even though the operating company may be sound, well managed and stable. These activities typically disturb the smooth automatic flow of transaction processing by the banks and so they cost the banks more that the fees they can collect. Examples are “high volume – low value” where hundreds of thousands of transactions have to be processed every hour or day, but the money value is very low, so that the fees the banks are collecting (based on value, not volume) are too small to justify the strain. Another example would be a service that generates too many cancellations and recalls (such as airline bookings), which may require some manual effort in order to credit the funds back into the purchaser’s credit card or bank account, additional customer complaints and enquiries etc.
When choosing a good high risk merchant account provider, take into account whether they are familiar with the type of business you run, so that you can negotiate for appropriate fee levels.
When assessing the degree of safety and reliability of the account providers listed below, we have tried to take into account as many relevant factors as possible, such as the age of the company, the range of services offered, any information we can gather about reliability and stability. However, we do not in any way endorse these companies or the offered services.