Close Menu
Arreh
    Facebook X (Twitter) Instagram
    Arreh
    • Home
    • News
    • Business
    • Technology
    • Life Style
    • Digital Marketing
    • Social Media
    • Entertainment
    • Travel
    Arreh
    Home»Business»High Risk Merchant Services and Ecommerce practices
    Business

    High Risk Merchant Services and Ecommerce practices

    David AvelinoBy David AvelinoJuly 5, 2021Updated:November 14, 2022No Comments4 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Most retail merchant services mainly operate on the fundamentals of a business being profitable and with no risks, therefore they are able to provide their services. Most businesses or start-ups are mainly related to technology or a new idea. 

    While this is usually a straightforward practice with a careful consideration on finances and how they are going to go about it in the future, there comes several problems when the said business is based on a rather risky model e.g. Gambling, E-Cigarette selling etc… 

    Some of the best ecommerce merchant services mainly prefer working with low risk 

    This article will focus on some of the differences between high risk and low risk ecommerce merchants.

    Low and High risk merchants

    Low risk merchants are mainly most of the mainstream retailers like Amazon that focus on selling various low risk products such as home grocery, books or any sort of general products. 

    These businesses usually have zero to low chargeback rates and operates in safe countries such as USA. These features are enough to get a credit card processor to provide their services for an affordable price.  

    These kind of companies are generally able to get either “Square” or PayPal as retail merchant services for their companies

    Now, what are “High” risk merchants then? They are basically businesses that have a bad credit history or are generally are operating under conditions that are more prone to credit fraud along with a high chargeback rate. 

    Those with high average credit transaction of more than $500 and who sells their products in countries generally regarded for high percentage of fraud are considered less than viable for credit card processors to provide their services to. 

    Reputation is also considered to be important for a company to be accepted. If any of these conditions are not met, they are simply left in the dust to fend for themselves. 

    And that is where the high risk merchant account services come in handy, while they are generally not as good as the low risk merchant services. But 

    They are more than enough to get any sort of business up and running with fewer chances of actual fraud happening.  Some of the common types of businesses that require a high risk merchant account are: 

    • Online gaming that involves micro-transaction features
    • Certain Software and Digital services.
    • Electronics
    • Gambling sites
    • Travel services

    There are several other risk factors that can cause your business to be categorized as a high risk one. For that, it is required for one to generally get a high risk merchant account that would cost a good amount of fees due to the general difficulty of handling such a company. 

    There is also the fact that you will have to sign a long term contract along with agreeing to pay an early termination fee if you decide to change high risk merchant services for some reason.

    The one unique factor of a high risk merchant is a “Rolling Reserve”. Let us know a bit more about it.

    Rolling Reserve 

    Rolling reserve for high risk merchants essentially provides them an extra protection in case some kind of fraud happens to their business or they accrue an unexpected chargeback rate. 

    In simple terms, you could call it a security deposit in a sense. It involves giving out an extra 5-10% of your finances to the bank to keep for security reasons. The higher the risk of your business, the higher you will be charged by the bank. 

    So carefully plan out what kind of business you are doing and if you are willing to pay out all the expenses for the high risk merchant service you will be taking.

    For this reason, several small businesses operating under high risk manufacturing generally experience trouble getting up to speed since they have to work harder compared to those who are at low risk. Therefore, it will be hard to find a reputable high risk merchant service. But if one tries hard enough, they could find a suitable one as there are several high risk merchant accounts that allow for a relatively affordable pricing along with security. 

    Some of the best high risk merchant account services for high risk companies like PaymentCloud allow you to afford a relatively good service along with a free EMV compliant credit card terminal as long as you own an account. If you decide to switch accounts or close it, you won’t be able to keep that card.

    All in all, it is recommended for you to carefully decide as to what kind of business you are planning to start and whether you are financially stable enough to support it.

    Make sure to share this article on your Facebook and Twitter page!

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    David Avelino
    • Website

    Related Posts

    Why Experienced Project Leaders are Essential for Middle East Construction Projects

    May 13, 2025

    Maximizing Employee Retention Credit: Key Strategies for 2025

    April 14, 2025

    Comparing Popular Business Platforms Pros and Cons

    April 11, 2025
    Recent Posts

    Отбор безопасного интернет-казино и игра на деньги: что важно понимать

    June 13, 2025

    Выбор доверенного интернет-казино и ставка на средства: что нужно знать

    June 13, 2025

    Как участвовать в интернет-казино: ключевые особенности

    June 12, 2025

    Why Experienced Project Leaders are Essential for Middle East Construction Projects

    May 13, 2025
    Categories
    • Apps
    • Automobile
    • Automotive
    • Blog
    • Business
    • Digital Marketing
    • Education
    • Entertainment
    • Fashion
    • Fitness
    • Food
    • Games
    • Health
    • Home Improvement
    • House
    • Inspiration
    • Law
    • Legal
    • Life Style
    • News
    • Pet
    • Real estate
    • Social Media
    • Sports
    • Technology
    • Travel
    • Contact Us
    • Privacy Policy
    Arreh.com © 2025, All Rights Reserved

    Type above and press Enter to search. Press Esc to cancel.