High Risk Credit Card Processing

Not all businesses can qualify for a merchant account that is typically available from a bank or merchant services provider used for local businesses operating with a storefront or online. The reason that these businesses are unable obtain a merchant account can be due to a variety of factors that force merchants to have to look for high risk credit card processing providers that can help find a solution that will work with their business' needs.

The most common solution for businesses facing this problem is to use a high risk merchant account that specializes in their niche. It is important for a business to realize why they are unable to obtain a merchant account from a local provider when searching for an offshore credit card processing solution. Many times merchants and their businesses have trouble finding a suitable merchant services provider due to any one of the following reasons:

  • Business Type
  • Business Location
  • Excessive Chargebacks
  • High Ticket / High Volume
  • TMF Merchant

Many times, the business model is the main factor that prevents the merchant from obtaining a low risk merchant account from a domestic based bank. There are a variety of business types that unable to qualify for a domestic merchant account and require a high risk credit card processing solution. These businesses may need; but are not limited to:

There are some business models that might appear to be high risk but do not require a high risk credit card processing service; instead they can generally be set up domestically through a payment processor specializing in that industry.  Businesses in such industries as adult can generally obtain affordable adult credit card processing from a merchant services provider with a specialization in that specific industry.

In some instances, the location can effect the type of merchant account required to establish payment processing services. The location of the owner or the jurisdiction where the company is registered can be a determining factor for the payment processing services.  Merchants operating in tax havens or otherwise low tax regions might not qualify for a domestic merchant account and require a high risk credit card processing solution to process transactions.

Domestically based businesses that are not operating a high risk business model might still require the services of a high risk credit card processor.  Businesses that have a track record of high chargebacks may be forced to find a payment processor that can handle their types of transactions.  Payment processors with this capability generally fall into the high risk payment processing category and operate as an offshore payment service provider.

Another reason that merchants might be forced to find a high risk credit card processing solution is because the business processes a very high number of transactions or excessively high volume transactions.  Some domestic merchant service providers might not have the capability or want for these types of merchants in their portfolio.  Obtaining a high risk merchant account for their business will also require a high risk payment gateway that can work with the payment processor.

Besides having to go to a high risk payment processing provider because of the circumstances surrounding the business, the owner of the business may be the reason.  From time to time, merchants might be placed on the TMF list, also known as the Termanated Merchant File, due to issues from a previous credit card processing relationship.  Merchants listed in the file are generally prevented from processing with a domestic merchant services provider, thus using an offshore credit card processing service might be the only option.

There are many different reasons why merchants or businesses might need to utilize the services of a high risk credit card processing company, but most businesses are able to find a suitable solution.