Merchant account is a contract between a booming enterprise and a bank or a financial institution. This contract ensures how the bank accepts payments for the services and goods on behalf on the business. These Merchant acquiring banks makes sure a merchant or company can accept payment from international customers for merchandise 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 and make sure that it is often a legitimate customer, thereby the risk involved is minimal. Another method 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 gambling payment processors 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 demonstrate. Thereby, the possibility of fraud activity is much greater with such a of business which ends up in classifying type of of accounts as “high risk” some. Naturally, these high risk merchant accounts present the likelihood of the dreaded charge backs for credit institutes in question. It has been proved by various researches these high risk processing transactions are more susceptible to fraudulent offers.
These factors considerably reduce the associated with banks willing acquire up these risky processing accounts. These adversely affect the applying company in setting up payment processing accounts. They often come across scenario where the banks generally decline their application, or impose high restrictions near the account transactions which virtually makes it impossible to conduct normal business. Even though a merchant has produced a payment processing account with a bank, he can not be sure that the relationship with your banker is secure. The lending company might revise their underwriting criteria anytime, and suddenly merchants are facing a situation 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 on the rates of transaction that should be imposed. High risk merchant acquiring banks take into account the technique they uses to draw customers, the expected turn over as well as the types of customers that might sign up with them. These banks also encourages merchants to open up multiple accounts thereby ensuring a diversified payment process, and even if one account encounters an issue, business can move through the other active ones.
As the saying goes, you cannot achieve anything existence without taking risks; companies are around the look-out for novel grounds that ensures a healthy business. These ventures might be a little unconventional, but what counts in the end is the turnover the company produces. So, banks or financial institutions should study them carefully and aim to help them carry out the payment process, rather than classifying them as heavy chance and denying systems. The high risk merchant account acquiring banks have fact eye-openers in this connection.