All businesses have some elements of risk involved as a general rule. Yet, the degree of these risks may vary drastically from one business to the other.
Due to the typical environment of the Internet, online businesses requiring credit card payments obviously carry much greater risks. The degrees of risk of the individual online businesses too very differently depending on various factors specifically applicable to online transactions.
When the sales volumes/turnovers are exceptionally large in a particular business, there is always a likelihood of some kind of fraudulent activities taking place at some point of time or the other. These businesses are typically considered as high risk businesses.
As it is well known, all online vendors need to hold merchant accounts that enable them to accept payments made electronically, especially through credit cards. While any no-risk or low-risk type of a business can conveniently obtain a standard eCommerce merchant account from any merchant account provider, it becomes almost impossible for the high risk types of vendors to procure such merchant accounts.
It is then that these high risk business operators opt and apply for a high risk merchant account to enable them to receive the online payments rather conveniently.
The list of high risk businesses that are considered unreliable by merchant account providers and as such need to possess a high risk payment processing can include a horde of different products and services.
Some of the more common high risk types conducting their business over the Internet and requiring high risk merchant accounts are:
Because of the apparent high risks involved with the businesses and the non-availability of many high risk merchant accounts providers, acquiring the high risk merchant accounts normally cost a fortune to the applicants. In comparison with the rates/fees chargeable by merchant accounts providers for approving standard merchant accounts, the rates for international/offshore high risk merchant accounts are inordinately larger.
The setup fee, which is very negligible (or not even charged) in case of standard merchant accounts providers, is extremely heavy for applicants of high risk merchant account. The credit card processing rates in respect of high risk merchant accounts too are comparatively very higher in relation to the standard ones.
There may be cases when for some serious reason vendors fail to acquire high risk merchant accounts. In such situations the best course open for them will be to surf the Internet to find third party credit card processors, which can operate high-risk merchant accounts on their behalf.
Employment of third party credit card processors for operating high risk merchant accounts can prove to be a very good alternative for the harassed vendors.
The vendors may, however, fail even in finding third party help to obtain high risk merchant accounts facilities if their businesses have a glut of serious problems in the form of recurring occurrence of fraudulent activities or frequent chargeback incidents.