Businesses that offer products and services online must have an easy pay out option for potential clients. Websites that manage to get good ranking in search engines get a lot of traffic. If the target audience does not find an easy way to pay for subscriptions, products or services, the business will lose a bulk of their customers. This is where a high risk merchant account steps in. Unlike typical merchant accounts that provide an online business with a credit card processing facility, some of these businesses are classified high risk, and are denied the regular accounts so a high risk merchant account providers uk.
The local bank or a credit card processing agency will offer payment facilities (credit cards, online banking and more) to a regular business such as an online university or a retail shopping store. However they would not offer the facility to businesses such as adult, gambling, pharmaceuticals, telemarketing, dating and more. This is for the simple reason that the chances of fraud are higher in such instances (owing to high traffic), potential for bankruptcy, and due to the possible controversial content available online.
Such businesses that are considered high-risk are denied regular merchant accounts, and they would need to acquire a high-risk merchant account. The set-up fee and processing charges are much higher than regular accounts, and getting an initial approval can be tedious and time-consuming. This is similar to companies that offer loans or credit cards to individuals with bad credit history. All the charges will be significantly higher.
Business still opt for the high-risk merchant account because they would rather have this than nothing at all. They might have high traffic, and would have to make enough profits to handle these higher charges. Looking at some of the high-risk businesses closer:
Adult merchant account businesses usually offer subscription services which is a risky proposition. Providers of high-risk merchant accounts offer multiple credit card processing facilities that suit their needs. The merchants would need documents such as business licences, domain ownership, registration certificates, personal bills and many more. The online businesses might have to pay daily or weekly, per the credibility of the documents.
Cash Advance and Payday Loan:
The pay day loan category is considered high-risk because of the potential of its customers to default the loan amount and other chargeback issues. However they could still get a high-risk merchant account that allows transactions in different currencies and credit cards.
Licensed online pharmacies can get a high-risk account by submitting similar documents of registration and certification. The merchants would take about two weeks to a month, to approve and set up the high-risk account.
Online dating sites would need subscription based plans, multiple accounts, multiple currency processing and other facilities to acquire and retain its target customer base. While banks call such business as high-risk, they can still get the high-risk merchant account that can offer similar facilities.
Businesses offering tech support facilities usually offer onshore and offshore support. This could be a one-time transaction or subscription based. Credit card processing is very important for such business, since the clients may not be willing to transact over third party financial bodies such as PayPal. These companies can also apply for and get a high-risk merchant account regardless of their geographical location.
Most high-risk merchant accounts are still approved and provided by banks, however there are many agencies that facilitate this for a fee. These agencies collect all the required documents and get an approval for such online businesses that need a pay-out facility.