Reasons to choose high risk merchant account:
Following are some of the factors that constitutes to make few crucial reasons that solves out a way for high risk merchant account.
Inappropriate reputation in industry:
It happens to be the reason of considering a high risk merchant account when it comes to your growth in industry. For few specific business owners like those of which people thought as free- online vendors usually do not have good reputation in market. This business also includes education industry, fitness clubs, travel authorities and those who do marijuana business too. They are regarded as bad reputed organizations and for that high risk merchant account is of great help. It gives you information regarding bank accounts, charge backs and refund level and maintains them accordingly to overcome this issue.
Minimal to zero processing history:
Another reason to go for high risk merchant account is that the processing history is less to almost none. In few cases, acquiring banks do a great research and scrutiny which sometimes leads to delay in the transaction processing. For that purpose, develop a good relationship with your acquiring bank and give them a detailed knowledge regarding your business model, tell them about your future plans briefly and precisely. Your business and transaction history will then be useful for your corporate business structure. Consequently, high risk merchant account will solve out all the matters for your business.
High ticket items and volume:
To be considered as a high risk merchant account, it is like you have to cross the limits of your payments on monthly bases. Mostly, banks are not inclined towards excessive charge backs and refunds so it is a clear risk of going beyond the limit. Therefore, it has also become one of the reasons to choose a high risk account. To sort out this, consider the ticketing items to be in the normal limit and gradually increase the volume request after sometime. It would also be good in avoiding frauds and refunds on high ticket items.
High rates and reserves:
Usually high discount rates and reserves is another issue that demands for high risk merchant account. It generally happens that banks demand for a particular percentage of reserves on monthly sales. All this also constitutes for a gateway and banking fees. In such scenario, if you have low charge back and rates then automatically you would have decreased reserves. Therefore, you need to protect your account and the net reserves in terms of profit.
Account termination is another crucial factor that occurs because of frauds and other deceiving tricks throughout your business. To save you from this problem, you must have another high risk merchant account for the backup. These risks can be avoided by choosing the suitable bank account for your business.