Things to Consider Before Signing up for High risk Merchant Accounts

Published On June 23, 2016 | By admin | Finance

If you are a business owner, having high risk merchant accounts might turn out to be an advantage to you and more so to your customers. If you hold such an account, you are able to accept payment through credit, debit cards, and other types of electronic payments. However, there are a number of things you should consider before getting this account and they include:

Hidden fees

Before signing up for a merchant account, you must find out if there are any fees that by any chance are not disclosed. Most business owners generally try to find a merchant payment provider that offers the lowest discount rate. A nominal application fee is required for the establishment of a merchant account.

Misleading ads

Some advertisements can be dishonest hence they might end up end up misleading you. This could cost you more if you don’t read between the lines.


Signing of any contract easily without reading the content contained therein can be costly. Some contracts carry a none cancellation clause or penalty. You may want to look out for things that indicate the you are probably being ripped off.


Declined transaction fee

Declined transactions mainly occur if you have an online store. The declines are costly since they are charged per transaction of about 20 cents each. A dishonest processor can pocket on decline charges in a number of ways thus, you should work with a processing company with good reputation.

No refunds for discount rates

Most processors tend to keep the discount rate whenever a credit is given. Most business persons tend to offer credit to their customers so as to make them happy. Therefore, one must ensure that they are working with processors who in the end return their discount rates for every credit given so as to increase the money they make.

Level of integrity

Before you sign up with any high risk merchant accounts, you must do a background check on the company and find out if it has ever done transactions related to your type of business. Some high merchant risk companies could have made a lot of money by supporting gambling casinos and adult porn sites. If you partner with such kind of companies, you might end up battling the legal issue in future.

No full use of funds

If you are looking to run a nonretail kind of business and you are considering getting a high-risk merchant account, you should be careful with the processors because once your business starts to grow they may freeze the funds. This is because once your business passes their standard amount, they consider it to be a high-risk business. When your cashflow is frozen, it can lead to huge losses and eventual closure of the business.

Getting a reliable processing company for your high risk merchant accounts can be a bit tricky since some of them are money hungry. The above tips are just a few that can help you navigate through the whole process and hopefully get you to a brighter future with your business.

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