Guide on High Risk Merchant Accounts and Online Credit Card Processing

Dec 09, 2013

A merchant account is a bank account that holds funds from credit and debit sales for merchants. Merchants that sell products online require a merchant account provider to process their transactions. These fall into two categories. One is a merchant account provider that issues businesses their own personal account, and the other is an aggregator, that uses their merchant account to process payments for other businesses. Before deciding which option is best for you, you should realize that it can be difficult to obtain a merchant account. This Guide on High-Risk Merchant Accounts will tell you what you should do to do to obtain a merchant account if you decide that it’s the right option for you.

If your business needs a merchant account for processing your credit card transactions, you must apply to get one. This is because certain types of businesses are seen as a financial risk, and credit card processors risk losing a great deal of money. Credit card processors have an application and screening process in order to lower the risk that they will be taking on. There are some businesses that credit card processors find riskier than others, so these businesses may find it more difficult to open a merchant account. These include sexually oriented businesses such as pornographic websites and adult video stores, internet gambling sites, telephone services such as chat lines, and any other high-risk businesses.

Even though certain businesses may be considered high risk, having a sound business plan and a strong processing history can help with approval. Another thing that may help to get an account approved is the duration of the fulfillment timeline, which means the time it takes for you to deliver the customer’s goods after the purchase. Businesses that sell specific items that can be delivered quickly tend to fare better. You should also be honest about your business plan, and any relevant steps you plan to take that will help your business to be successful.

In the end, it is up to you to help convince credit card processors that you are worth the risk. Having a sound business plan in place, with a good processing history can help, but that is still no guarantee of successfully obtaining a merchant account. Being honest about your business portfolio and business plan can also help when you’re seeking approval for a merchant account. Most importantly, remember to read the fine print before signing any contracts or making a deal that sounds too good to be true.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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