High Risk Merchants FAQ

What are High Risk Merchants?

High Risk Merchants are specific types of businesses that have a higher than normal chargeback ratio and higher than normal risk of returns or customer sales disputes. Chargebacks that add to more than 1% of total monthly sales are typically considered excessive chargebacks by high-risk processors. In addition to the chargeback potential, the merchant acquiring banks consider an account a High Risk Merchant Account based on the potential for possible legal violations for selling particular types of services or products, financial liability that the bank or processor will incur for processing for the merchant or bad publicity towards the bank for accepting certain types of businesses.

How long will it take me to get a High Risk Merchant Account established and begin processing?

The length of time varies, depending on how quickly the paperwork and the supporting documents are received. Once we have all the required documentation, approval typically takes 24 to 48 hours and merchants can usually begin processing immediately. Larger or higher risk accounts can take as long as 2 weeks to become fully integrated and to begin processing at all their locations.

What is the High Risk Merchant Reserve, how much is it and how long is it held?

The reserve is a cash amount held back from your available post-clearing funds. The high risk merchant reserve generally ranges between 5% and 10% of each merchant’s approved volume or monthly sales volume.  Reserves can be held for a minimum of 180 days under a rolling reserve feature of the high risk merchant account. Reserve amounts are held by the merchant processor to ensure against losses due to uncollected fees, excessive chargebacks, merchant fines, etc.

Can a start-up business get approved for an offshore merchant account?

Our high-risk acquirers approve companies for offshore merchant accounts on an individual basis. If you are a start-up business, what’s important to us is the strength of your business plan, how you expect to generate sales, supply and service your customers and the history of the principals in your business.

If our company (and ourselves) has been placed on the MATCH list, can we still be approved for a new merchant account?

It is possible. Any high-risk processor will evaluate the risks on a case-by-case basis. We work with our processors to find the best way to have your application approved on a timely basis. While we make no guarantees of merchant approval, we make every effort, using our experienced staff and resources, to get you the merchant account you need to conduct your business.

We know that individual merchants using a shared merchant account do not have individual descriptors. What does it take to obtain approval for our own merchant account and our own descriptor?

Depending on size, category and risk, merchants can obtain their own custom descriptors once their individual merchant account has been approved to accept credit cards.

Can our merchant account settle transactions in more than one currency?

Yes, multiple currency settlements are available for approved merchants.

Which merchant businesses are considered High Risk?

Businesses or industries that are included in the High Risk Merchant category include the following:

Adult Service Providers
Pharmaceutical Merchants
MO/TO Accounts (mail order, telephone order)
Collections Agencies
Internet Auctions
Adult Oriented Businesses
Travel & Cruise Industries
Door-to-Door selling
High Ticket Sales
Furniture Stores
Club Memberships
MLM (Multi-Level Marketing)
Tobacco Sellers
Time Share sales

If your business is not included in the above list and you would like to know if there is any industry predisposition toward high risk merchant status, please call us at 800-357-0001 or contact us today!

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