Merchant account is a contract between a booming enterprise and a bank or a standard bank. This contract ensures that the bank accepts payments for the products or services on behalf of this business. These Merchant acquiring banks makes sure a merchant or company can accept payment from international customers for these products or services they deliver. Thus a merchant account form a vital part of any E-commerce business.
There are two types of merchant accounts. First is the normal account, where the merchant can directly access the card assure that it is a legitimate customer, thereby the risk involved is minimal. One more type of card processing involves the accounts where it isn’t possible to visually testify the end user. These types of accounts include adult entertainment merchants, online gaming merchant account tobacco merchants, replica merchants, internet gambling merchants, pre-paid calling merchants, VOIP merchants, multilevel marketing merchants, or any transaction that takes place with the customer physically not show. Thereby, the possibility of fraud activity is much greater with such a of business which ends up in classifying tend to be of accounts as “high risk” varieties. Naturally, these high risk merchant accounts present the potential for the dreaded charge backs for financial institutions in question. Has been proved by various researches that these high risk processing transactions are more susceptible to fraudulent offers.
These factors considerably reduce the regarding banks willing acquire up these risky processing accounts. These adversely affect the applying company in establishing payment processing profile. They often come across scenario where the banks generally decline their application, or impose high restrictions on the account transactions which virtually makes it impossible to conduct normal business. Regardless of whether a merchant has generated a payment processing account with a bank, he can never be sure that the relationship with the particular is secure. The particular might revise their underwriting criteria anytime, and suddenly merchants are facing a 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 towards the rates of transaction that should be imposed. High risk merchant acquiring banks take into account the technique the company uses to draw customers, the expected turn over along with the types of customers that might get involved with them. These banks also encourages merchants to open open multiple accounts thereby ensuring a diversified payment process, likewise if one account encounters an issue, business can move through the other active ones.
As the saying goes, you cannot achieve anything in life without taking risks; companies are on the look-out for novel grounds that ensures a healthy business. These ventures might be just a little unconventional, but demonstrating your worth in the end is the turnover the company generates. So, banks or financial institutions should study them carefully and rather than help them carry out the payment process, rather than classifying them as heavy chance and denying applications. The high risk merchant account acquiring banks are produced in fact eye-openers in this regard.