Credit Card Processing : Reviews and Expectations
The primary costs to a merchant of merchant accounts are discount rate and transactions fees. The merchant account provider has a lot of latitude in the pricing structure.
Three tier pricing of Credit Card Processing is one of the most common pricing schemes. Using 3 tiers pricing, the merchant account provider groups the transactions into 3 groups (tiers) and assigns a rate to each tier. The three tiers are qualified, mid-qualified and non-qualified rates.
A qualified rate is the lowest tier. It is what a merchant is charged when processing a consumer credit card in a way that has been defined as standard by the merchant account provider. The qualified rates is what is usually quoted by merchant account salespeople. A mid-qualified rate is what the merchant is charged if processing a transaction outside of standard parameters. A mid-qualified rate may apply to rewards or corporate cards, which can comprise up to 40% of the cards used for purchases. The Credit Card Processing, of course, has no control over what card a consumer uses.
High risk merchant account providers are the designated partners of the banks specializing on high risk online businesses by setting-up a merchant account, acting as the processing gateway, and protecting them from fraudulent transactions.
High risk merchant account providers specialize on businesses with higher risk and greater incidence of fraud involved. They provide services like setting-up a merchant account, acting as the processing gateway, and protecting clients from fraudulent transactions. A business is considered high risk when it falls under any of the following category: not a registered entity, blacklisted by processing companies, generates large volume of transactions, shows inconsistent and unstable credit history.
With the advanced technology, there is an increasing demand for high risk providers to make online business transactions possible and secure. When choosing for the right service provider, the following good qualities should be present: offers a quick approval time, charges reasonable set-up fees, allows real-time online processing services, provides fraud protection facility, offers diverse payment schemes, and has 24/7 technical support.
Since there is a tough competition among several high risk account providers, make sure you make a comparative analysis about their services and fees before applying. Not all are equipped with risk management features to secure your business.
Credit Card Processing : Reviews and What to look for in a Merchant Account ?
A high risk merchant account is a merchant account or payment processing agreement that is tailored to fit a business which is deemed high risk or is operating in an industry that has been deemed as such. These merchants usually need to pay higher fees for merchant services, which can add to their cost of business, affecting profitability and ROI, especially for companies that were re-classified as a high risk industry, and were not prepared to deal with the costs of operating as a high risk merchant. Some companies specialize in working specifically with high risk merchants by offering competitive rates, faster payouts, and/or lower reserve rates, all of which are designed to attract companies which are having difficulty finding a place to do business.
Businesses in a variety of industries are labeled as 'high risk' due to the nature of their industry, the method in which they operate, or a variety of other factors. For instance, all adult businesses are considered to be high risk operations, as are travel agencies, auto rentals, collections agencies, legal offline and online gambling, bail bonds, and a variety of other online and offline businesses. Because working with, and processing payments for, these companies can carry higher risks for banks and financial institutions they are obliged to sign up for a high risk merchant account which has a different fee schedule than regular merchant accounts.
When a merchant applies for a merchant account with a bank, payment processor, or other merchant account provider, there are many factors to consider before settling on a particular merchant provider. It is often possible to negotiate lower rates, and one should always request multiple quotes before choosing which high risk merchant account provider to use for their processing needs.
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