Types Of Businesses That Can Use The Service
For particular businesses, getting an account approved by a financial institution can be problematic due to the fact that they are labeled high risk merchants. Due to the volume of sales that certain businesses process, the type of product that is being sold, or the probability of there being problems with an account, the risk of an account getting turn down or closed runs high. That is why these businesses turn to high risk merchant account providers.
A small error on the part of underwriters such as incorrect volumes or dollar amounts put a business in jeopardy and could even result in the business being listed on the black ball list.
Issues with charge backs are one of the main reasons why some businesses are considered high risk merchant accounts. A chargeback is a forced return of funds to a consumer. Chargebacks fall into four general categories: clerical errors, such as duplicate billings, or incorrect billing price, quality errors, or when a consumer claims that they never received the product, fraud, when a customer says they never approved the transaction or claims identity theft, and technical errors, such as past expiration dates, or insufficient bank funds.
Businesses that are especially privy to fraud and quality errors include adult sites and products, horoscope and fortune tellers and hair restoration services.
Check cashing services run a high risk of fraud and identity theft which could result in major loss for the business, this is called high risk check processing. Credit repair businesses and credit interest rate reduction consultants handle a large amount of personal information as well that is in jeopardy of being stolen.
Businesses that host dating websites, websites where users can download software, escort services and Infomercials all run a high risk of returning money to clients, and personal information is somewhat easy to access, sometimes it is exchanged over the phone.
Certain businesses have a propensity to have trouble paying accounts on time. These include bail bondsmen, wholesale clubs and lotteries. For this reason, they are considered high risk merchants.
Another industry that is considered high risk is the tobacco industry, due to public pressure and health concerns.
Businesses that deal with a high volume of monthly or daily sales often have problems processing credit card information, called high risk credit card processing, putting it at risk for identity theft or for fraud.
Finally, any type of phone solicitation business will be able to use high risk merchant accounts because the information is not as secure when it is transferred over the phone.
Even if you have already suffered the damage of having a high risk business, it is worthwhile to contact your local authority on an international merchant account to see what their assessment is of the situation.