Introduction –
The crucial thing that you should know is that, a high-risk merchant account is needed if a business or industry with a greater risk of fraud or chargebacks – or some other characteristics – wants to take credit card payments. Whenever a client pays by card, the money is first held in the merchant account prior to being transferred to the bank account of the business. Besides all of that, payment processors most of the time provide a built-in merchant accounts, but the many payments processing firms will not work with industries or businesses which they know as high-risk. You can also see here more details on, stripe restricted business list and learn more. Further, the industries or businesses may be known as high-risk like that of tobacco, or the firearm sales, which requires an FFL payment gateway, it is because they are the ones who sell internationally, and have subscription cost and that’s where they come in as high-risk merchant accounts.
Businesses At High-Risk –
The small business owners who are looking for payment processor which provides high-risk merchant accounts, like NerdWallet has complied a list of the best payment processor for merchants at high-risk. Do compare the processing fee monthly and explore the combinations and know the best. Also, you should know that, there is not a single framework or the central authority in the industry of payments which determines which factors are dangerous or risky. Rather, each payment processor and bank comply of its own standards. There are companies which state directly that they will not work with some industries or businesses and welcome other businesses or industries, which are not high-risk. Mostly, the payment service suppliers are stricter than the merchant account suppliers about which kind of businesses they should accept and which they should not accept.
Submitting Application and Lengthy Process –
Mostly, in many cases they are asked to submit an application with certain details about the businesses. Then, the company will make a decision about the application based on the criteria that is internal. There are many ways in which a merchant account differs from a regular or normal account. The first point of distinction is high payment processing fees. A competitive processing fee payment for a basic retail small business account can be 2.6% plus 10 cents, while the fee for a high-risk merchant account can be 2.95% plus 25 cents. Besides all of that, for these rates a $50 charge, a basic retail business would pay $1.40 whereas, a high-risk merchant will pay $1.73. The real fee will differ by or from company to company. Then, comes the lengthy application process in which the standard or basic small business account, which you might need, for that, you might or can get approved in minutes or less. But, in a high-risk merchant they will be asked to share more data or details of their business-like bank statements, personal credit shall be checked and so on.