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 merchants the most popular, with the most cases cost effective, source is from a third party merchant account provider.
A high risk merchant card account is required by businesses that, when compared along with 'traditional' goods/services business, are at a higher risk of:
High volume of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized like a high risk are:
Merchants Location - Some merchant account providers won't accept merchants from certain countries.
The Product/Service the merchant sells is illegitimate in some jurisdictions.
Merchant Credit file - Some providers will not accept merchants with poor or no credit details.
Due into the high risk classification, most banks won't provide a merchant account to those invoved with a perilous industry (such as adult entertainment, replica goods, pharmacy merchant account payment gateway etc). Consequently some vacation providers offer their services to both general merchants and high-risk merchants.
Merchant account providers which developed to service riskly merchants will broadly speaking provide to the next stage of fraud protection, you will notice that decrease charge their merchants incur. However, in order to cover the higher level of risk, rates with a high risk merchant account will continually be higher than their lower risk counter-parts.
When looking for a high risk merchant account, there are several factors to be take into account. Rates will be one of the biggest factors, like includes fees for refunds and charge-backs, along with transaction fees, the discount rate and continuing fees. Require need to take into account fraud protection, customer service and reporting available to you as a merchant.