Merchant accounts are needed in order for a business to accept credit card payments. As a merchant, there are two places you can obtain a merchant account; a bank, or a third party provider. For online pharmacy merchant services merchants the most popular, in addition as in most cases cost effective, source is from a 3rd party merchant account offerer.
A high risk processing account is required by businesses that, when compared together with ‘traditional’ goods/services business, close to a higher risk of:
High sum of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized to be a high risk are:
Merchants Location – Some merchant account providers will not accept merchants from certain countries.
The Product/Service the merchant sells is unlawful in some jurisdictions.
Merchant Credit report – Some providers will not accept merchants with poor or no credit account.
Due to the high risk classification, most banks will not provide your free account to those involved with a danger industry (such as adult entertainment, replica goods, pharmacy etc). As such some vendor providers offer their services to both general merchants and heavy risk merchants.
Merchant account providers that happen to be developed to service high-risk merchants will probably provide to the next stage of fraud protection, so as to decrease the cost their merchants incur. However, in order to cover the level up of risk, rates for a high risk merchant account will always be higher than their lower risk counter-parts.
When looking for high risk merchant account, there exist several factors to be take note. Rates will be one of the most important factors, as well as includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. Then you will need to look into fraud protection, customer service and reporting available to you as a merchant.