Low Risk vs High Risk Merchant Account

Are you a business owner and thinking of having a merchant account for online payment processing through credit/debit cards? Please go through this information before taking the next step.

There are categories of Merchant Accounts viz. High Risk Merchant Account and Low risk Merchant Account. So before you apply for merchant account you need to have proper information regarding which category your business falls in. Here we will tell you the difference between both the categories.

Apply for a Instant Approval High Risk Merchant Account

If your Business satisfies the following characteristics then you are applicable for a low risk merchant account.

Less than $20,000 is processed by you in monthly period
Very low preferably zero chargeback rate
The country that you operate from is low-risk
Average size of your ticket is less than $50
Your Operations are based in low risk industry

Following Characteristics push you in High Risk Merchant Account category:

If you are a Brand new business with no business history
High Ticket Size and chargeback ratio
Low reputation
You as the owner of the business has low credit score
Time limit of the service provided is very high

There is no need to worry in case your business comes under high risk category, you can always lower down the risk and become a Low Risk Merchant by reducing the ticket size to a lower prize and reduce the ratio of chargeback and prevent frauds in transactions.

The approval of low risk merchant account is quicker as compared to the approval to high risk merchant account.

In case you come across a financial institute offering Instant High Risk Merchant Account approval, stay alert as there no such term in Merchant Account Market.

High-Risk Merchant Account – How to Avoid Account Termination?

What is merchant account?

A business account in which the financial institution allows the account holder to accept payment through online money transactions using credit/debit card is called a merchant account.

What is high-risk merchant account?

The merchant account with a high risk like frauds in transactions is considered as a High Risk Merchant Account. When such risks the involved the merchant bank charges high premium and also charge extra fees for their services and card networks charge to try and minimize the risk involved.

Apply for a High Risk Merchant Account

When are you high-risk merchant?

Following are the few possibilities when your account is considered a High-Risk merchant account:

1. If you start a brand new business, there is no previous online transaction processing history.
2. The reputation of the business, if the business is anytime previously known for dissatisfaction of costumers, transaction frauds, etc.
3. Low Credit Score, you are considered a high risk merchant if your credit score is low as there are possibilities that you find it hard to repay your negative balance.
4. Service Provision, if in case there frequently is a lengthy time span for your business to provide proper service or deliver a product to the costumer, your business may be categorized as high-risk.
5. Transactions over phone, if your business uses a virtual medium for transactions this causes the costumer not being aware of details.
Along with all these there are a few more criteria’s of getting a status of high-risk merchant account, like- Chargeback History, Frequent refunds, Automated Billing, etc.

Which type of businesses are included in High-Risk Status?

Following is the list of High-Risk Merchant Consideration-
1. Adult Entertainment
2. High Volume Transactions
3. Pharmaceuticals
4. Travel and Lodging
5. Gaming
6. Marketing through network
7. Firearms and so on

How to avoid?
There are chances depending on the reputation on your account, the account may get freezes for a short span or permanently in which you cannot have any transactions in this account.

The best way to avoid all these problems is to be completely upfront and honest in the Merchant Account Application about the services and products you will provide the customers through your business.

WHY SHOULD YOU OBTAIN HIGH RISK MERCHANT ACCOUNT SOLUTIONS FOR FOREX BUSINESS?

Forex is one of the largest markets in today’s financial world with the average daily trading turnover being $5 trillion. Growing market means new traders entering the market every day along with brokers and businesses offering forex platforms and services to these clients.

Apply for a Forex Merchant Account

With the introduction of new technologies, the way trading is done undergone change and the market has become more competitive for the merchants too. One of the advantages wherein a business can gain significant leverage is by offering their traders options in terms of accepting credit or debit cards while trading.

A Forex High Risk Merchant Account has become an absolute necessity for merchants that have clients trading on their trading platforms.

Of course, obtaining a merchant account for forex businesses is not so easy. Being a high risk industry, one of the many difficulties that these merchants face is the difficulty in finding a secure bank or merchant account.

Challenges In Getting A Forex Merchant Account

The risky nature of the industry is a major factor in banks and processors shying away from the business. Forex businesses are governed by strict rules and regulations that they must adhere to. They are subject to heavy regulatory scrutiny and require proper licensing presenting a challenge in obtaining a regular Forex Merchant Account.

Another issue is the high number of chargebacks associated with the business. Forex businesses are often faced with a number of challenges and conditions that a regular merchant would not usually face.

Leverage your Forex Business with High Risk Merchant Account Solutions

The faster pace of forex markets requires equally fast and efficient payment processing system. With the advancement in technology, such payment processing options are being made available to the merchants. Mobile payments, E-wallets, debit and credit cards, etc have become the preferred mode of payment that has been adopted by customers as well as merchants for speedy transactions.

When applying for a high risk merchant account for your forex business, ensure that your business has a license. Without it, you may face further complications in your application process.
A long and positive processing history (minimum 3-6 months) ensures business stability and profitability which increases your approval chances.
As a risky business, forex merchants need to avoid any and all kinds of suspicious activities relating to your business. A lower chargeback ratio is also necessary.
Along with obtaining high risk merchant account solutions, forex merchants should also integrate 3D Secure Payment Gateway services for safe and smooth transactions.

These key points are important to fulfill in order to increase your chances of approval when applying for a forex high risk merchant account.

If you are looking for high risk merchant account services for your forex business, IBS is a top-rated merchant account provider specializing in high risk verticals with over 95% merchant approval rate.