Getting a merchant account for high risk business is difficult due to the accompanying potential risk. In this case, a third party processor is ideal because of the following reasons: specializes on high risk business, less paperwork, easy online application, no set-up fee, quick approval, no fixed monthly fees, and obligations are low.
A merchant account is a special kind of account that is difficult to acquire due to several supporting documents required. A third party provider is more or less the same with the merchant account; although, the major difference is that it makes use of another account to facilitate online transactions due to high risk involved. There are several reasons why a third party processor is advisable for high risk business namely:
A third party processor is an entity that specializes on high risk types of business since most of the merchant account providers are cautious in the amount of risk involved due to high rate of fraud. The businesses are considered high risk when the following characteristics are present: accepts credit card payment online or through phone, provides trial offers and seasonal sales, with international customers, accepts multiple currency processing, high refund rate and excessive chargeback, and anonymous business owner.
If your business is new and classified as high risk, hiring a third party processor will lessen your paperwork and verification needed. All you need to do is just fill-up the application form online and have it approve in just minutes.
Due to the risk involved, it is most likely to have a disapproved merchant account; however, it does not necessarily mean that once business is high risk, they will always be refused. With the third party’s easy online application, even those with bad credit history can avail of their services.
When a business is categorized as high risk account, its set-up fee is relatively higher compared to a regular merchant account. Most often than not, no-set fees are collected by the third party provider.
High risk businesses like insurance, online games, software downloads and more are expected to draw site traffic, it is appropriate to open an account where fast approval is offered. This is to prevent loss of potential customers who are eager enough to avail of your products.
With the kind of business that you have, there is no guarantee that regular sales will come in. This is one of the many reasons why a third party processor like PayPal is recommended since they only ask on a per transaction basis. You are not obliged to pay any amount if no money is transferred to your account unlike with the merchant account where a fixed monthly fee is imposed.
We can’t deny the fact that fraud can happen no matter how advance their fraud protection scheme is. More so with high risk business where scam is almost always present, because the online criminals are brilliant enough to find ways on how to penetrate your site. Since the responsibility of the third party is limited to transferring of funds from your credit card account to the merchant’s, the bank will take full responsibility in the event fraud will occur. Therefore, the obligation on the part of the business owner is not that high; although, the charged fees are higher to cover the amount of risk.
About the Author: If you want to know more about merchant account for high risk businesses, click here: https://www.takecardstoday.com/ You might find this helpful in case you decide to open an account for your business.