High Risk Merchant Accounts

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There are a number of various businesses that are risk-prone due to various reasons including high sales volumes and the resultant susceptibility to fraud. Such high risk merchants, even though making enormous profits, have a difficult time getting competitive processing rates and service providers.

Any businesses with one or more of the following characteristics can be categorized as high risk:

  • The business is not registered as required by law.
  • The vendor or his business is blacklisted by merchant account providers/credit card processing companies for reasons of bankruptcy, fraudulent dealings or etc.
  • The merchant's credit history is not consistent.
  • The merchant runs any business such as telemarketing, travel, online pharmacy, gaming, ticketing, entertainment, downloadable software, etc.
  • The business generates large volumes of sales resulting in large number of transactions. Such a situation is likely to lead to instances of fraud and term the vendor as a high risk merchant.
  • The business is small with very insignificant volumes of sales and fewer numbers of transactions. Such a business may not be able to afford the heavy expenses involved with purchase of fraud screening software/tools and other miscellaneous features as well as making payments required towards third party processor fees.

Who Are the High Risk Merchants?

Vendors engaged in the following businesses online are classified as high risk merchants:

  • Adult Sites and Products
  • Amusement & Recreation Services
  • Auto Rental
  • Bail Bondsmen
  • Buying / Shopping Clubs / Wholesale Clubs
  • CBD / Hemp Products
  • Cellular Phones & Beepers
  • Charter Airlines
  • Check Cashing Services
  • Coin Shops
  • Collection Agencies
  • Computer Stores
  • Credit Interest Rate Reduction
  • Credit Repair
  • Cruise Lines
  • Custom Products
  • Dating Sites
  • Detective Services
  • Door-to-Door Sales
  • Downloading of Software
  • E-Wallet & E-Cash
  • Escort Services / Massage Parlors
  • Gun Shops
  • Hair Restoration Services
  • High Volume / High Ticket
  • Home / Apartment Operated Business
  • Horoscope / Fortune Tellers
  • Infomercials
  • Insurance Products
  • Internet / Custom Jewelry Sales
  • Investment Opportunities
  • ISP / Hosting Services
  • Lotteries
  • Mortgage Services / Securities Sales
  • Multi-level Marketing
  • Nutraceutical Products
  • Online Auctions
  • Online Gaming
  • Outbound / Inbound Telemarketing / Phone Solicitation
  • Pawn Shops
  • Seminars, Educational
  • Sports Cards
  • Sports Forecasting / Consulting
  • Telecommunications Equipment Sales
  • Time Share Sales
  • Travel
  • Used Auto Sales
  • Water Purifiers
  • Weight Loss Centers

    …… plus many, many more.

The above business models do not necessarily make all the vendors exclusively high risk merchants. The degree of 'high risk' varies from one merchant another depending on a host of factors.