Merchant account is a contract between an opportunity and a bank or a loan company. This contract ensures that the bank accepts payments for the goods and services on behalf on the business. These Merchant acquiring banks means that a merchant or company can accept payment from international customers for these products or services they deliver. Thus merchant credit card accounts form a vital part of any E-commerce business.
There are two sorts of merchant accounts. First is the normal account, where the merchant can directly access the card assure that it is a legitimate customer, thereby the risk involved is minimal. The second type of card processing involves the accounts where it is not possible to visually testify the end user. These types of accounts include adult entertainment merchants, online gaming industry merchant account 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 present. Thereby, the possibility of fraud activity is much greater with this type of business which ends in classifying these types of accounts as “high risk” info. Naturally, these high risk merchant services present the likelihood of the dreaded charge backs for the banks in question. Has been proved by various researches these types of high risk processing transactions are more susceptible to fraudulent transactions.
These factors considerably reduce the involving banks willing to take up these heavy risk processing accounts. These adversely affect the applying company in setting up payment processing balances. They often come across a scenario where the banks generally decline their application, or impose high restrictions near the account transactions which virtually makes it impossible to conduct normal business. Even when a merchant has established a payment processing account with a bank, he can not be sure how the relationship with the bank is secure. Loan company might revise their underwriting criteria anytime, and suddenly merchants are facing scenario where the payment processes adversely affect their business.
Today, many top-notch banks are ready 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 actual uses to draw customers, the expected turn over along with the types of customers that might sign up with them. These banks also encourages merchants to opened multiple accounts thereby ensuring a diversified payment process, and perhaps even if one account encounters an issue, business can move through the other active ones.
As the saying goes, you cannot achieve anything in life without taking risks; companies are on the look-out for novel grounds that ensures a healthy internet marketing business. These ventures might be just a little unconventional, but actually matters in the end is the turnover the company brings. So, banks or financial institutions should study them carefully and rather than help them carry out the payment process, rather than classifying them as danger and denying applications. The high risk merchant account acquiring banks are in fact eye-openers in this regard.