Merchant account is a contract between an industry and a bank or a standard bank. This contract ensures that the bank accepts payments for the goods and services on behalf of the business. These Merchant acquiring banks means that a merchant or company can accept payment from international customers for the merchandise or services they deliver. Thus merchant services 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 ensure that it is really a legitimate customer, thereby the risk involved is minimal. Another method type of credit card merchant account involves the accounts where it is not possible to visually testify the customer. These types of accounts include adult entertainment merchants, online gaming payment processing tobacco merchants, replica merchants, online gambling merchants, pre-paid calling merchants, VOIP merchants, multilevel marketing merchants, or any transaction that takes place with the customer physically not there. Thereby, the possibility of fraud activity is much greater with this of business which results in classifying loaded with of accounts as “high risk” ones. Naturally, these high risk merchant credit card accounts present the risk of the dreaded charge backs for the banks in question. It’s got been proved by various researches these high risk processing transactions are weaker to fraudulent dealings.
These factors considerably reduce the number of banks willing in order to up these heavy risk processing accounts. These adversely affect the job company in establishing payment processing balances. They often come across scenario where the banks generally decline their application, or impose high restrictions for your account transactions which virtually makes it impossible to conduct normal business. Despite the fact that a merchant has built 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 predicament where the payment processes adversely affect their business.
Today, many top-notch banks are to be able to establish high risk merchant accounts. These accounts are highly personalized accounts. Credit institutes study the system intensively and then draw conclusions concerning the rates of transaction that should be imposed. High risk merchant acquiring banks take into account the technique the actual uses to draw customers, the expected turn over and also the types of customers that might be involved with them. These banks also encourages merchants to open open multiple accounts thereby ensuring a diversified payment process, as well as if one account encounters an issue, business can undergo the other active ones.
As the saying goes, you cannot achieve anything in life without taking risks; companies are at the look-out for novel grounds that ensures a healthy business. These ventures might be a little unconventional, but what matters in the end is the turnover the company has. So, banks or financial institutions should study them carefully and aim to help them carry out the payment process, rather than classifying them as riskly and denying employment applications. The high risk merchant account acquiring banks are fact eye-openers in this regard.