Merchant account is really a contract between an industry and a bank or a financial institution. This contract ensures how the bank accepts payments for the products or services on behalf of the business. These Merchant acquiring banks makes sure a merchant or company can accept payment from international customers for the merchandise or services they deliver. Thus a merchant account form a vital part of any E-commerce business.
There are two kinds of of merchant customers. First is the normal account, where the merchant can directly access the card and make sure that it is really a legitimate customer, thereby the risk involved is minimal. The second type of credit card merchant account involves the accounts where it isn’t possible to visually testify the borrower. These types of accounts include adult entertainment merchants, online gaming merchant account rates 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 active. Thereby, the possibility of fraud activity is much greater with this of business which results in classifying these types of accounts as “high risk” varieties. Naturally, these high risk merchant credit card accounts present the potential for the dreaded charge backs for the banks in question. It has been proved by various researches that these high risk processing transactions are more susceptible to fraudulent dealings.
These factors considerably reduce the associated with banks willing acquire up these heavy risk processing accounts. These adversely affect the appliance company in establishing payment processing trading accounts. They often come across a predicament where the banks generally decline their application, or impose high restrictions near the account transactions which virtually makes it impossible to conduct normal business. Even if a merchant has generated a payment processing account with a bank, he can’t be sure how the relationship with your banker is secure. The particular might revise their underwriting criteria anytime, and suddenly merchants are facing a scenario where the payment processes adversely affect their business.
Today, many top-notch banks are ready to establish high risk merchant accounts. These accounts are highly personalized accounts. The banks study the system intensively and then draw conclusions throughout 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 along with the types of customers that might sign up with them. These banks also encourages merchants to open open multiple accounts thereby ensuring a diversified payment process, and even if one account encounters an issue, business can move through the other active ones.
As the saying goes, you cannot achieve anything in life without taking risks; companies are at the look-out for novel grounds that ensures a healthy business. These ventures might be just a little unconventional, but what matters in the end is the turnover the company builds. So, banks or financial institutions should study them carefully and aim to help them finish off the payment process, rather than classifying them as high risk and denying systems. The high risk merchant account acquiring banks have fact eye-openers in this regard.