High risk merchant accounts are more common than some business owners may think. If you fall under the high risk category, there is no need to panic. Choice Funding provides secure and stable merchant accounts for our clients for almost any industry type. Our clients are given the correct SIC and MCC codes upon setup which drastically reduces the risk of the account being terminated, unless there are extremely high charge backs or fraud.
High Risk Merchant Accounts
Why would a business be considered high risk?
- You’ve been branded as a terminated merchant (TMF)—meaning you’ve lost your previous merchant processor account because of excessive chargebacks.
- You are a new business with very little credit card processing history.
- You are in an industry with high chargeback ratios.
- You sell products or services that usually result in high dollar transactions.
- You provide subscription based products or services.
- You are an international merchant or do business in countries with a high chargeback risk (basically anywhere outside Canada, the US, Australia, European Union, Japan, South Korea or Singapore).
- You are a multi-currency business.
- You have a bad credit history.
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What is a high risk merchant account?
A merchant account is a type of account, approved by a certain bank, that allows its owners to accept credit cards as a form of payment for their goods and services. However, the type of business applying for the merchant account may influence its risk factor, and some banks may not approve what is considered by them a high risk merchant account. It is important to understand that not all banks would like to work with any industry and therefore our job, here at Choice, is to find the bank that will work with your type of business.
What kind of accounts are considered high risk?
Although certain industries (listed below) are considered high risk, some industries that may be on the “safer side” may still be considered by some banks to be high risk, and that may be due to previous bankruptcies the owner of the firm may had in the past, unsatisfactory credit history, length of company in business and so forth. So, shortly, even businesses that most banks consider low risk may by considered high risk at some cases due to the individual situation of each company.