What is a High Risk Merchant
If you are a merchant or entrepreneur, you should be aware that there are some high-risk factors that may hinder your growth process. And that’s simply the nature of business. No matter what industry you are in, you are bound to face your share of risks.
So, what exactly does it mean to be a high-risk merchant?
In payment processing, a business may be considered high risk for a number of reasons. Some reasons may be superficial, depending on the niche or type of clientele while others may be directly related to how a business operates and its practices.
Unless your business operates as a cash-only establishment, accepting and processing credit card payments has become the norm nowadays. If your business is considered high risk however, attempting to secure a standard merchant account for accepting electronic payments may be a hurdle that you need to overcome. In general, however, risk is usually calculated in terms of chargebacks and fraud; the more chargebacks a business experiences, the higher the risk.
Please note that just because your business has been labeled high risk, does not mean that it will fail. Instead, it simply means that you cannot work with a standard merchant account, which can make running a business difficult, but not impossible.