Simply put – if you run a business that receives high ratio of chargeback to sales then your business qualifies as high risk business. And a merchant account for the merchants from high risk business industry is a high risk merchant account.
High risk businesses are prone to great number of chargebacks and refunds. This is the most common reason for payment processors and acquirers to consider such businesses as high risk. And generally, to reduce risk, banks put higher processing fees and a rolling reserve on such accounts.
Being identified as a high-risk merchant means you will have to go through extra scrutiny in order to process payments for your business. Alongside a rolling reserve, you might be limited to certain volume and transactions per month.
In most cases, you will be required to pay higher fees and/or processing rates to receive a variety of merchant services due to your high-risk designation. Some providers may even refuse to work with you if you have poor bank history.
To your surprises, it is not bad at all to be identified as high risk merchant. After surfacing through the high fees and difficulties in obtaining merchant services, there are several benefits for high risk merchants.
High risk merchants are able to offer recurring transactions enabling you to generate greater revenue. You will able to sell products at higher ticket price than any medium or low risk businesses. You can also offer wide variety of products and services. Also, your account will have fewer restrictions that might limit their goals for global expansion.
Purepay Payments Limited is a UK based payment services provider (PSP). We specialize in providing merchant services and payment processing services for high risk businesses. If you are considered as a high risk merchant, we make sure that you do no worry about it.