Online Merchant Accounts : 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 Online Merchant Accounts 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 Online Merchant Accounts, of course, has no control over what card a consumer uses.
Ever thought of starting your own porn site? If you were to do such a thing and charge money for membership, then you would need a high risk merchant account.
What is a merchant account?
A merchant account is an essential account that you need in order to accept credit cards online. If you plan on running a website that allows you to collect fees from those who visit your site, then you can not start doing so without the merchant account.
The high risk merchant account
If you are running a high risk merchant account ,it is most likely that you will have a hard time finding credit card processing options. There are only a limited number of providers who are willing to accept such clients and if they do, their rates are often high. High risk accounts include adult websites, online casinos, and pharmaceutical merchants.
Online Merchant Accounts : 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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