Merchant account is a contract between a business and a bank or a loan company. This contract ensures that the bank accepts payments for the items on behalf on the business. These Merchant acquiring banks is the reason why a merchant or company can accept payment from international customers for merchandise or services they deliver. Thus merchant accounts form a vital part of any E-commerce business.
There are two types of merchant customers. First is the normal account, where the merchant can directly access the card and make sure that it is a legitimate customer, thereby the risk involved is minimal. A second essential type of card processing involves the accounts where it is not possible to visually testify the customers’. These types of accounts include adult entertainment merchants, online casino merchant account tobacco merchants, replica merchants, gambling online merchants, pre-paid calling merchants, VOIP merchants, multilevel marketing merchants, or any transaction that takes place with the customer physically not there. Thereby, the possibility of fraud activity is much greater with might of business which ends up in classifying loaded with of accounts as “high risk” info. Naturally, these high risk merchant credit card accounts present the risk of the dreaded charge backs for banking companies in question. More affordable been proved by various researches that these high risk processing transactions are more susceptible to fraudulent transactions.
These factors considerably reduce the associated with banks willing to take up these perilous processing accounts. These adversely affect the necessary paperwork company in establishing payment processing accounts. They often come across a situation where the banks generally decline their application, or impose high restrictions for your account transactions which virtually makes it impossible to conduct normal business. Regardless of whether a merchant has produced a payment processing account with a bank, he cannot be sure that the relationship with their bank is secure. The particular might revise their underwriting criteria anytime, and suddenly merchants are facing 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 on the rates of transaction that should be imposed. High risk merchant acquiring banks take into account the technique the business uses to draw customers, the expected turn over as well as the types of customers that might be involved 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 undergo the other active ones.
As the saying goes, you cannot achieve anything in life without taking risks; companies are within the look-out for novel grounds that ensures a healthy business. These ventures might be just a little unconventional, but is important is proving in the end is the turnover the company has. So, banks or financial institutions should study them carefully and are able to help them facilitate the payment process, rather than classifying them as precarious and denying tasks. The high risk merchant account acquiring banks are in fact eye-openers in this regard.