With the rising popularity of e-commerce transactions worldwide, investing in a merchant account for your business is essential. However, high-risk businesses are more prone to chargebacks and tend to come with more expensive merchant processing fees as a result.
Some businesses that are considered high risk include those in the adult industry, travel industry, financial services, gambling industry, or sell software downloads. However, each merchant has its own criteria for determining which business is classified as high risk.
In general, businesses that have a chargeback rate of 1% or higher of their total transactions can be considered as high risk. Other factors can include processing history, location, and the products that you sell. Some other characteristics of high-risk businesses include:
If you meet the qualifications above and are designated as high-risk by your merchant service provider, you still have plenty of choices to work with. By keeping your chargeback rate as low as possible, ensuring your processing is PCI-compliant, you’ll be able to minimize risk.
Learn more about how to choose the best high-risk merchant processor with our guide.
Florence Carpenter is passionate about ensuring that the process of opening merchant accounts is as straightforward as possible. She graduated from the University of Michigan with a bachelor’s degree in Marketing.
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