What Is a High-risk Merchant Account?
Companies that are classified as "high-risk" require a high risk merchant account for accepting credit and debit card transactions. A high-risk enterprise is one with higher risk of fraud or chargebacks (and some other features too). But, there isn't any central authority or a framework for the industry of payments that decides the risk factors that are associated with the business. Instead, each bank and each processor of payments has its own set standards. Certain payment solutions providers may declare upfront that they do not provide services to specific sectors. Others may request more specific details about a company to determine risk, based on whether the business's application will be approved or denied. In the end, it all comes down to a processor's internal requirements and their perspective on risk management. What factors determine if an Online Merchant is at risk? Certain industries which are more risk-averse could be flagged automatically as high-ri...