High risk merchant accounts can be defined as a subdivision of services which permit the businesses to take card payments from customers. High risk credit card processors allow merchants to any one of the categories either high risk or normal risk based on numerous factors. Now, there can be a number of reasons why your business can be considered as high risk and it’s an obvious thing different acquiring banks and payment providers will have different views on what is considered as high risk. If one considers a business to be a risky business venture, the same could be considered by others as all clear.
Chargeback History & Returns –
There are several reasons which contribute towards your business being considered as a high risk merchant account. Some such reasons are as follows –Chargebacks and history of it is one such reason contributing towards your business being designated as high risk. This happens when the bank which is issuing takes action for the return of funds to the cardholder, which is somewhat based on their complaint or dispute. Then, another reason why your business is termed as high risk is the returns. If you are into business and you tend to pay out refunds frequently, then there are payment companies which may assume that you being a merchant is doing something wrong and give your business a high risk status.
Delivery & Industrial Repute –
Another reason, as to why your business can be termed as high risk merchant account, is the delivery. If the time frame or time period for the delivery of the products, goods, or services to your client or customer is lengthy then something can go wrong and can end up making your business a risk for the provider. Next, is the reputation of the industry? Again if the industry is having higher points of dissatisfaction by the consumer and fraud transactions and or is being targeted by the fraudsters then your business or that industry can be termed as high risk.
Credit Score & MOTO transactions –
Next, the factor that amounts to your business to get the designation of high risk is the credit score. If your credit score is too low then you may acquire the status of high risk and it will also be tough for you to pay the negative balance if nay which you may have to repay. MOTO transactions are another reason. Suppose your business transactions are being done over the phone and the card is not physically present. And if the customer purchases in person, then there is a higher chance that the card holder is not aware about the same.
New Business –
Then, if your business is completely new, it’s obvious you don’t have a credit card processing history, which will automatically bring your business into the circle of risk. If there is an automated billing there are chances that the customer can dispute the charge, and also they will not remember that they logged in with your business. If your business processing is having a lot of transactions there is a risk that the cyber criminals may attempt to steal your credit card details.