Eternity Law International News Difference between high risk and low risk merchant account

Difference between high risk and low risk merchant account

Published:
January 29, 2020

In this article, we will look at the main differences between high and low risk merchant accounts, as well as determine what role chargebacks play in determining risk.

KEY FEATURES OF LOW RISK MERCHANT:

  • Your average monthly sales are less than $ 20,000.
  • Your average credit card transaction is less than $ 500.
  • You only accept one currency.
  • Your payment page is hosted by a payment service provider.
  • The products you sell are: low risk books, stationery, household items, or clothing.
  • Your country is considered a low risk country – USA, Canada, Western or Northern Europe, Japan or Australia.
  • You are using 3D Secure to prevent fraud.
  • Your returns and payments are kept to a minimum.

HIGH RISK MERCHANT CHARACTERISTICS:

  • You are listed on MATCH due to excessive chargebacks.
  • You are a new merchant with a small history of credit card transactions.
  • You sell goods or services to customers in countries with high levels of fraud (anywhere outside the United States, Canada, Western or Northern Europe, Japan, or Australia).
  • You accept multiple currencies.
  • You have a bad credit history.
  • Your average monthly sales exceed $ 20,000.
  • Your average credit card transaction is over $ 500.
  • Your sales are seasonal or recurring.
  • You are in an industry that is usually associated with high returns or chargebacks.

HOW EQUIPERS ASSESS THE RISK OF MERCHANTS

Risk identification is a subjective process. When assessing the risk of a merchant account, many factors are taken into account. Many acquirers view the following products and services as high risk:

  • Casino, gambling or games
  • IP telephony / telemarketing
  • Pharmaceuticals / pharmacies
  • All products or services related to adult content or activities
  • Hotel accommodation
  • Dating service
  • Magazine subscriptions
  • E-Sigs
  • Software, hardware, or other downloads with potential copyright issues
  • Authorized collectibles
  • Psychiatry
  • Hypnosis
  • Financial / investment services
  • Counterfeit goods

Acquirers will consider each business on a case-by-case basis. Not all of the aforementioned industries will be considered high risks for everyone; likewise, many other businesses not listed above may be considered risky.

In general, acquirers use the following criteria to evaluate a merchant’s services or offerings:

  1. Will this business attract unwanted advertising to the bank because of the services or products it provides?
  2. Will there be potential legal and financial obligations due to the services or products offered?
  3. Will excessive chargebacks be a problem?

As such, there are many factors that can cause a business to be considered a high risk, but refunds should not be the only one.

connect a merchant account

You could be interested

Bank account for casino

The specialists of our company have developed a full range of services for the registration of gambling companies in offshore zones and EU countries in those jurisdictions in which the gambling business is allowed. Our turnkey casino opening package includes the cost of opening a bank account for casinos, which can be done immediately after...

The variety of functions of the financial market

The variety of functions of the financial market, at first glance, it may seem that the international financial market is very conservative, but if you look closely, you will understand that this is not so. An analogy from anatomy is appropriate here. If the world economy is the whole body, then the financial market is...

Classic Trust in British Virgin Islands

Beyond their untouched beauty, the BVI also offers favorable possibilities for someones and relatives striving to protect and grow their wealth through the corporation of classic trusts. A classic trust is a legitimate arrangement in which acquisitions are given to a trustee who owns and manages them on behalf of the inheritors. The trustee is...

EMI license in Greece

In recent years, the world has witnessed a significant shift towards digital monetary favors. With the rise of e-commerce, mobile payments, and digital wallets, traditional banking methods have been increasingly complemented and, in some cases, even replaced by electronic money institutions (EMIs). These institutions offer a seamless and convenient way for individuals and businesses to...

Virtual office

A virtual office is a business place that can be operated remotely. Thanks to the virtual office service, business owners and employees can work from anywhere in the world. All you need to do is have a computer or smartphone and Internet access. A virtual office can provide significant savings and flexibility when compared to...

EU Sets First Rules to Regulate Cryptocurrencies

In light of quickly emerging new projects stored on blockchain, the EU sets the first rules to regulate cryptocurrencies. EU authorities agreed on the adoption of legal mechanisms that would oversee the cryptomarket, obliging businesses to apply for authorizations to operate and provide services to users. Although the proposal still has to go via Brussel’...
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof

Kyiv

Baseina street, 7

London

Grosvenor Gardens, 52

Washington

1629 K St. Suite 300 N.W.

Vilnius

Gediminas Avenue, 44A

Tallinn

Kesklinna linnaosa, Tuukri 19

Edinburgh

Lochrin Square, 1

Nicosia

Jacovides Tower, 5 floor

Riga

Esplanade, 7 floor

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard

Sydney

20 Martin Place

Porto

2609 Avenida da Boavista

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7