Merchant Articles

High Risk Merchant Accounts- High risk merchant accounts are unfortunately becoming more of a need in today’s times. Business Merchant Account has written this tutorial on high risk merchant accounts to educate you on them and how to find the best!

In the past high risk merchant accounts were seldom used. However with the current economy and a lot of people trying to start new businesses, high risk merchant accounts are more common. Other than credit history, there are two main types of businesses that require high risk merchant accounts.

1. High risk businesses
2. Poor credit history

High risk businesses

No matter who is running certain types of businesses, they are prone to high risk merchant accounts. High risk merchant accounts have very similar guidelines as adult merchant accounts. Here is a list of companies that Business Merchant Account knows needs a high risk merchant account.

• Adult Sites and Adult Blogs
• Auto Rental
• Bail Bondsmen
• Check Cashing Services
• Collection Agencies
• Dating Sites
• Detective Services
• Door-to-Door Sales
• Escort Services / Massage Parlors
• Gun Shops
• Horoscope / Fortune Tellers
• Infomercials
• Insurance Products
• Investment Opportunities
• Lotteries
• Mortgage Services / Securities Sales
• Pawn Shops
• Sports Cards
• Telecommunications Equipment Sales
• Time Share Sales
• Travel
• Used Auto Sales
• Weight Loss Centers

While this isn’t a complete list of companies that require high risk merchant accounts is a very good portion of them. As you can tell from reading this list, all of these businesses have a very common theme. They are high risk businesses that tend to have lots of issues. Some of those issues are:

• Clientele- Most of the time when a business is considered high risk because of the clientele it is because the business has an age restriction.
• High number of complaints- Some of the listed businesses are prone to complaints merely because of the business they are.
• High number of returns- Same as the complaints. People return certain products more often than others.
• Unsteady income- Unlike a lot of businesses, most high risk businesses have incomes that fluctuate, thus putting the merchant account provider at risk for not having payments made on time.

Poor Credit History

Unfortunately in this day and age a lot more people are falling into the poor credit history category. This is partly due to failing businesses which result in unpaid loans. Another reason that people have to use high risk merchant accounts is because they have flaked out on payments for previous merchant accounts. They are now a high risk to not paying their debts again.

So when a person tries to get signed up with a merchant account and they have poor credit history they get turned down. That is unless they sign up for a high risk merchant account.

In the end, you want to do as much as you can to avoid having to use high risk merchant accounts. High risk merchant accounts cost more money than traditional merchant accounts thus cutting into your revenue. Business Merchant Account has put together a list of five tips to avoid having to use high risk merchant accounts.

1. Pay your bills on time. While Business Merchant Account understands that this can be easier said than done, in the long run you want to make your merchant account bill a priority. You will save a lot in merchant account fees if you keep up to date on your bills.
2. Avoid refunds if possible. Have a policy in place that clearly defines your return procedures. If you are able to avoid refunds then you will avoid chargeback fees. A good alternative to this is offering store credit to your customers.
3. Read the fine print. That’s right when you sign up for merchant account read everything. It is going to be in your best interest to read all the terms and conditions of your merchant account so that you know what will cost you money and what won’t.
4. Do your research. By visiting Business Merchant Account you are already on your way. A lot of merchant accounts look the same but they aren’t. Look at all the merchant account fees and check for hidden fees.

Think about your business. If you can avoid a high risk business then do so. By not starting a high risk business you most likely won’t need a high risk merchant account. Should you choose to continue with a high risk business just know that you are going to be paying higher merchant account fees and will really need to stay on top of your business.

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