Merchant account can be a contract between an industry and a bank or a loan merchant. This contract ensures that the bank accepts payments for the offerings on behalf of the business. These Merchant acquiring banks makes sure a merchant or company can accept payment from international customers for items or services they deliver. Thus merchant services form a vital part of any E-commerce business.
There are kinds of merchant accounts. First is the normal account, where the merchant can directly access the card and ensure that it is a legitimate customer, thereby the risk involved is minimal. The second type of merchant account involves the accounts where it is not possible to visually testify the borrower. These types of accounts include adult entertainment merchants, online gambling merchant account tobacco merchants, replica merchants, internet gambling merchants, pre-paid calling merchants, VOIP merchants, multilevel marketing merchants, or any transaction that takes place with the customer physically not present. Thereby, the possibility of fraud activity is much greater with this of business which ends in classifying these types of accounts as “high risk” ones. Naturally, these high risk merchant credit card accounts present the risk of the dreaded charge backs for financial institutions in question. More affordable been proved by various researches these kind of high risk processing transactions are more susceptible to fraudulent transactions.
These factors considerably reduce the connected with banks willing acquire up these heavy risk processing accounts. These adversely affect the applying company in setting up payment processing profile. They often come across a situation where the banks generally decline their application, or impose high restrictions near the account transactions which virtually makes it impossible to conduct normal business. Despite the fact that a merchant offers established a payment processing account with a bank, he can never be sure how the relationship with the particular is secure. The particular might revise their underwriting criteria anytime, and suddenly merchants are facing a situation where the payment processes adversely affect their business.
Today, many top-notch banks are prepared to establish high risk merchant accounts. These accounts are highly personalized accounts. Credit institutes study the system intensively and then draw conclusions on the rates of transaction that should be imposed. High risk merchant acquiring banks take into account the technique the organization uses to draw customers, the expected turn over and the types of customers that might join with them. These banks also encourages merchants to open up multiple accounts thereby ensuring a diversified payment process, as well as if one account encounters an issue, business can undergo the other active ones.
As the saying goes, you cannot achieve anything in life without taking risks; companies are on the look-out for novel grounds that ensures a healthy company. These ventures might be just a little unconventional, but actually matters in the end is the turnover the company builds. So, banks or financial institutions should study them carefully and these types of help them carry out the payment process, rather than classifying them as riskly and denying employment applications. The high risk merchant account acquiring banks are in fact eye-openers in connection with this.