Do You Want To Understand The High-Risk Merchant Account Fees?
Merchant services allow businesses to accept credit card payments from their customers. To get a credit card processing solution, a merchant has to approach a merchant service provider. The merchant service provider categorizes the businesses usually into low-risk industries and high-risk industries. Every industry has a different set of rates and fees. The bitter truth is that High-Risk Merchant Account Fees are higher than that of low-risk merchant accounts. If your business is labelled under high-risk industries, you will be charged a higher fee by the acquiring banks. There are different factors that an acquiring bank takes into consideration to flag a business as risk-oriented. Thus there are a certain set of factors that constitutes the fees for a high-risk merchant account. Well, before digging deep into the fees structure, let’s understand what the high-risk merchant account is and what makes it superior?. We will also help you with the documents required for a high-risk merchant account.
What Is A High-Risk Merchant Account? Is It A Boon Or Bane?
A high-risk merchant account is a special type of merchant account with higher privileges and processing limit. It is somewhat the same as other merchant accounts, but it can offer a lot more than it. In other words, a merchant can enjoy a lot more benefits than that of a low-risk merchant account. Most of the processor rejects the high-risk merchant application form, but we don’t. We understand how crucial it is to get a merchant account to accept payments from your customers worldwide. Even its a merchant right to accept card payments and grow their business. For Quarapay, a high-risk merchant account is a boon. They have much more liabilities in terms of business.
- Avenue to Bigger Market Opportunities: it opens the door to global opportunities. Having an eCommerce website can help you to expand globally. Our high-risk merchant account allows you to accept payments in foreign currency and it gets settled down into your local currency. Offering credit/debit card processing for your online eCommerce website will increase your growth and revenue. You are no longer limited to your country; our high-risk payment gateway authorizes the payment from worldwide.
- More Secure Service: High-risk merchant account is more robust and secure. As obvious, a high-risk merchant processes large transactions and has a large ticket size. To protect them from any online fraud, the merchant service provider takes special care. They regularly perform fraud detection checks to detect any online fraud or theft. This helps to keep the merchant as well as a customer free from fraud and helps the business to grow.
- Chargebacks Flexibility: With a traditional low-risk merchant account, there are more chances that your account may get shut down due to excessive chargebacks. Payment processors sometimes shut your account or even terminate the account if you have excessive chargebacks. But this is not the case of high-risk merchant accounts. The processor takes preventive measures like rolling reserve before onboarding you for a high-risk merchant account.
- Recurring Options: Merchants have the option to charge their customers on a recurring basis. Recurring billing services or subscription payment processing is a good business model to grow your business.
High-risk Merchant Account Fees
As we have discussed, the bitter truth is that you have to pay a little higher for a high-risk merchant account. You must be aware of various types of fees a merchant is liable to pay for a high-risk merchant account. Among those, the fees which frustrate the merchants most is the Rolling reserve and chargeback fees. Let’s discuss the two first.
- Rolling Reserve: A rolling reserve is a protection measure banks against chargebacks. It is a strategy which is used by banks to protect themselves from possible fraud. Rolling reserve is the fund or a proportion of money that is collected by the processors or acquiring banks from the merchant. The amount of rolling reserve is calculated by the acquiring bank, and the bank will hold the money and set up your high-risk merchant account. Rolling reserves are only applicable for the high-risk merchant accounts.
- Chargeback Fees: Chargebacks are common in a high-risk business. But sometimes the merchants are unaware of the chargeback fees which are imposed with every dispute raised for the chargeback by the customers. It’s the fees that cover the administrative cost to process the chargeback.
The other fees that a merchant is liable to pay are as follows:
- Set-Up Fees: Set-up fees is your first step towards payment processing. It is the initial fees which are charged by the merchant account provider. Fortunately, most of our partnered processors waive off the set-up fees and offer free set-up.
- Transactional Fees: Transaction fees is the fees associated with each transaction. It is the fees a merchant has to pay to the processing company each time to process the electronic payments.
- Account Termination Fees: The fees are imposed on merchants when they terminate the agreement in-between the contract. Most of our partnered processor charges you nothing for account termination. They offer you a month-to-month contract.
- Gateway Fees: Gateway fees are applied to cover the cost of accepting and processing payments.
Documents Required For A Merchant Account
- Merchant Application Form
- Personal Identity Proof-Like Passport or any valid national ID
- Articles of Incorporation
- Voided Check/Bank Letter
- 6 Months Bank Statements (most recent)
- 6 Months Processing Statements (if startup, not required)
- Tax Identification Number (TIN) or a Social Security Number (SSN)
If you are looking forward to getting a high-risk merchant account, apply today to get your free quote.
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