High Risk Merchant Account

An online merchant needs to have a reliable method of collecting money from customers who purchase products, services or subscriptions on a website. A shopping cart is a tool that’s synced with payment processing. In turn, money has to eventually get transferred into an account that is accessible to the actual online merchant.

Many payment processing agencies might refuse to serve high risk merchants. The term “high risk” applies to specific businesses that sell heavily regulated products or services. Taken to another level, such businesses are also controversial and perhaps even offensive. For example, tobacco and alcohol and CBD industry are already heavily regulated by local, state and federal laws in the United States. The same restrictions apply when cigarettes and spirits are sold online. Merchants face an array of laws and regulations that must be carefully followed or else hefty penalties will be enforced. Online stores that sell “high risk” goods or services need to open up merchant accounts that can properly process payments. So if you are selling CBD products online you will need a CBD merchant account.

Only a relatively small percentage of payment processors are willing to serve high risk merchants. The adult entertainment industry is booming on the world wide web. There is an array of adult websites that heavily rely on selling monthly subscriptions to customers all over the world. Discrete billing is an important aspect of payment processing for websites offering exclusive erotic and pornographic content. Discrete payment processing essentially lists the name of the payment processor rather than the actual adult website on a credit card statement.

High risk payment processing also involves a factor of identity theft and fraud. For instance, stolen credit cards can be easily used to make purchases at online stores. Eventually, disputes are eventually filed for the unauthorized charges. This means that honest eCommerce merchants are losing money because of dishonest people using stolen credit cards. An effective merchant account must have a system in place to provide refunds to authorized customers. Automatic transfers must be made back to the credit card accounts of shoppers requesting refunds. Online merchants should also expect to provide returns and refunds for customers who are not satisfied with certain products, services or digital subscriptions.

There is definitely a high risk factor in some businesses that often receive a large number of requests for returns. In some cases, electronic stores could also be considered to be risky because valuable gadgets could be returned or exchanged. The quality of the returned products might be inferior compared to brand new products. Therefore, online merchants lose money when providing a large number of refunds or exchanges on valuable electronics and other digital equipment.