Merchant account is a contract between a booming enterprise and a bank or a financial institution. This contract ensures that the bank accepts payments for the offerings on behalf on the business. These Merchant acquiring banks ensures that a merchant or company can accept payment from international customers for the merchandise or services they deliver. Thus a merchant account form a vital part of any E-commerce business.
There are kinds of merchant bank account. First is the normal account, where the merchant can directly access the card and ensure that it can be a legitimate customer, thereby the risk involved is minimal. The second type of merchant credit card involves the accounts where it is not possible to visually testify the end user. These types of accounts include adult entertainment merchants, online tobacco merchants, replica merchants, gambling online gaming merchant account and payment gateway 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 type of business which results in classifying these types of accounts as “high risk” varieties. Naturally, these high risk merchant services present the likelihood of the dreaded charge backs for banking companies in question. It has been proved by various researches these types of high risk processing transactions are weaker to fraudulent transactions.
These factors considerably reduce the number of banks willing in order to consider up these high risk processing accounts. These adversely affect the necessary paperwork company in establishing payment processing balances. They often come across a situation where the banks generally decline their application, or impose high restrictions near the account transactions which virtually makes it impossible to conduct normal business. Regardless of whether a merchant has built a payment processing account with a bank, he cannot be sure how the relationship with the bank account is secure. The particular 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 prepared to establish high risk merchant accounts. These accounts are highly personalized accounts. Finance institutions study the system intensively and then draw conclusions towards the rates of transaction that should be imposed. High risk merchant acquiring banks take into account the technique the business uses to draw customers, the expected turn over as well as the types of customers that might get involved with them. These banks also encourages merchants to amenable multiple accounts thereby ensuring a diversified payment process, as well as if one account encounters an issue, business can proceed 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 company. These ventures might be a little unconventional, but demonstrating your worth in the end is the turnover the company has. So, banks or financial institutions should study them carefully and rather than help them carry out the payment process, rather than classifying them as high risk and denying systems. The high risk merchant account acquiring banks are fact eye-openers in connection with this.