While high risk merchant accounts generally refer to accounts sanctioned to merchants and business owners running ‘high risk’ companies, in the credit business, the term ‘high risk’ is defined more unconventionally. While this category includes companies or company owners with bad credit history, specific types of businesses are also listed as ‘high risk’ in a de facto way. These businesses generally include online casinos, bad debt services, online pharmacies and others.
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Following the common bank policy, if a company, or even a company owner is considered a ‘high risk’ business or merchant, it is almost impossible to get approval for a general merchant account. This is where high risk accounts come into play. Many credit companies, either international or offshore, avail customers with high risk accounts needed for business.
Although high risk merchant accounts are supposed to help a business grow, due to lack of care and consideration, a merchant often ends up with more loan and debt than anticipated. To avoid such dreadful results, consider the tips below while following common sense and good judgment.
First, always look for credit companies with good reputations and a satisfied customer base. Online reviews and word of mouth are good sources for this knowledge. Secondly, don’t trust your agent blindly. Read the agreements and terms of use provided by the company very carefully. Many of these companies contain hidden fees, such as per transaction fees and account cancellation fees. Compare two or more companies of your choice, and opt for the most suitable one for you. Thirdly, don’t fall for lucrative ads. Many of these are misleading, and will charge more than they state. Fourthly, pay careful attention to the details. For instance, some processors even charge for failed transactions. These points are deliberately written in fine print in the agreement letter, so make sure to read the papers thoroughly. And finally, don’t always go for companies providing the lowest discount rate. Try to be certain that along with transaction fees and other additional payments, the discount rate adds up to something affordable for you.
Even though high risk merchant accounts may require additional attention and careful checking and planning, once you open the right one, your business should shift into high (and profitable) gear.
