Occasionally there are businesses that are unable to set up credit card processing services with a local or domestic merchant services company. Though the business may appear to be a great merchant with strong sales, there could be a number of reasons that would force the company to sought the services of a high risk merchant account provider.
Many times companies facing acceptance problems from domestic payment processors decide to find a high risk credit card processing company that can accept their circumstances and provide them a solution for their business. Generally these business are facing one or more of the following issues that require high risk payment processor;
- Type of Business
- Location of Business
- High Chargebacks
- High Ticket / High Volume
- TMF Business
One of the most common reasons a merchant pursues a high risk merchant account is due to the type of business that they are operating. Whether its due to risk, licensing, or other factors; no matter how hard these merchant try they will be unable to find a domestic payment processor that will accept their business - leaving them the only option to find a high risk payment processing service provider.
- Gaming Merchant Accounts
- Binary Merchant Accounts
- Forex Merchant Accounts
- Nutraceutical Merchant Accounts
- Pharmacy Merchant Accounts
There are a handful of businesses that are not accepted by general domestic processors but do not require the use of a high risk merchant account. Industries such as tobacco and tobacco products are increasingly difficult on the domestic level, but can be placed by using a payment processor that specializes in tobacco merchant account services.
Other reasons that merchants might need a high risk merchant account could be due to the location of either the merchant or the country that the business has been registered in. Most general merchant service companies are unable to set up businesses for payment processing services if either the corporation or the business signer is not a resident of their local jurisdiction.
In some instances, the business may do a significant amount of monthly sales volume, but the business model or for an extenuation reason the business has suffered a high percentage of chargebacks. With this scenario, many local payment processing companies are unable to accept these kind of merchants; thus requiring the merchant to look to a high risk credit card processing service.
Other types of business models may have trouble being accepted in with a domestic payment processor based on the types of payments that they need to accept. Having a business with excessively high transaction amounts or merchants that need to process a very high volume of transactions per month might require the use of an offshore merchant account along with a high risk payment gateway that is able to integrate into the high risk payment processor.
Another problem that might affect merchants could be a history of being placed on the TMF (Terminated Merchant File) list. Merchants placed in this file might have a history from a previous business; whether it was from problems at a previous business or if funds are owed to a previous payment processor, merchants on this list will not be able to process transactions with a local processor.
There are a variety of factors that could force a business to seek out a high risk merchant account, but they are still a possibility for payment 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:
- Gaming Credit Card Processing
- Binary Credit Card Processing
- Forex Credit Card Processing
- Nutraceutical Credit Card Processing
- Pharmacy Credit Card Processing
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.