A high-risk merchant account is a one-stop solution for merchants in many aspects, and it is the first and foremost platform for survival. All high-risk industries need merchant accounts to operate business smoothly. IPTV merchants, online casinos, iGaming, Forex traders, and eCommerce websites all need a place to get paid for a high-risk business. The constant contradiction with legal formalities makes it more important for the merchants to depend on this business account. All merchants, whether they have a merchant account or are looking for one, have doubts about it. Some light on the varied aspects of this commercial account can help many out there to find the right deal and grow the business properly.
What Risk Factors Make a Business Depend On a High-Risk Merchant Account?
Several factors have their role in making a business high-risk. In different companies, you can find varied risk factors. Following are those factors that make a business take a high-risk merchant account.
Long delivery time is a considerable factor in a business that can make it high risk. If the duration between the order of a product and its delivery is too long, it makes a business risky. During this duration, anything may go wrong. The product may get destroyed or deformed, and the buyer may change their mind and can cancel the order in the middle of its delivery.
A disgraceful history of chargebacks is also a potential factor to tag a commercial entity as risky. Usually, e-commerce and adult entertainment merchants are pretty prone to chargebacks. Customers demand money back due to dissatisfaction with the product in terms of quality, color, quantity, etc. A higher number of chargebacks may make a merchant account provider close the account of a business. Also, such merchants may find it challenging to get a high-risk merchant account with instant approval.
Industry reputation is also a significant factor that puts a business under several potential threats. Can you ever find a person discussing adult products with their kids or family members in an amusement park? It is absolutely impossible because the adult entertainment industry and its services are not the subjects people discuss socially. Such businesses are always under the notice of legal institutions, and one small mistake may close them down, which is a considerable risk for the acquiring banks.
Frequent refunds spoil the goodwill of a business and show that a merchant is not doing good in business. It makes an acquirer and international high-risk payment gateway think that maybe the company is following a wrong practice, which is why it has to refund the customers’ money in a recurring manner.
High-volume transactions leave commercial entities under threats created due to hackers. Some businesses process millions and billions daily, and hackers want to steal their identities to make fake transactions. As we all know, the daily high-volume transaction is a significant identity of high-risk merchants.
Automated billing, usually considered a good thing for a business to receive timely payments, can sometimes prove a threat. The customer may forget that he has signed up for a product or service and may ask for a chargeback. It happens with many businesses, and the winner is always the customer because when he raises a chargeback demand, the credit card company always favors the cardholder.
Major Credit Card Frauds And Their Prevention Tactics Available For Merchant Account Holders
We all know that high-risk merchant accounts are always prone to credit card fraud issues, and merchants are afraid of fraudsters. However, thankfully, today, we have intelligent tactics that can handle the threats and ensure safer business operations for a business. Let us first discuss the common credit card threats.
Credit Card Frauds –
Merchant account holders sometimes face several credit card fraud issues that may affect their business goodwill and stability.
Phishing is a common way to commit credit card threats using malware or computer viruses. It has been in existence since the 1980s, and today it is used to steal bank account numbers and passwords.
Fraudulent websites are also a cause of worry for high-risk merchant account holders. A fraud website looks similar to the original website; however, it usually does not have the company’s postal address. Even if the address is mentioned, the users should first confirm it.
Vacation fraud can sound rare, but it is widespread. When people visit a hotel during vacations, messages asking for their credit card details from the hotel’s front desk can be fake. Customers who gamble at casinos may receive notifications about the new online casino game offers. The merchant account and
Fraud through pre-populated details is another complication the merchants may face as high-risk merchant account holders. Many users save their information on the website to pay quickly next time while making a purchase conveniently. They use the feature of autofill, which is quite helpful but only if a business has robust security measures.
Tactics to Prevent Credit Card Fraud –
Anti-credit card fraud tactics always help merchants run their businesses smoothly without fear of fraudsters and survive with confidence in the market. This confidence comes with the safety shield of high-risk merchant accounts.
3D secure transactions create a safety shield around the daily transactions. According to the regulations of PCI-DSS, high-risk merchants have to be compliant with the PCI-DSS level.
Verification of orders with incomplete details is another way to ensure whether an order is authentic or not. Vague name, absence of a name, and phone number are some of the factors that indicate that a credit card transaction is doubtful.
Keep track of the patterns used in fraudulent orders, as it helps spot any suspicious orders in the future. Sometimes a particular person or group submits orders repeatedly. The timely reports generated by your payment gateway about transactions can quickly reveal such transactions.
If customers pay through the mobile application, scan and scrutinize biometric data or selfie pictures. These details are always available when the user sets up an account. Such information is essential and can be used to track fraud people.
The above tactics apply to all account holders. Whether you have a high-risk merchant account in the UK, the United States, or anywhere in Europe. Another important tactic is that a merchant should keep an eye on the latest scams to know how the trick minds out there are working. Accordingly, new ways of prevention can be invested.
List of High-Risk Industries
Some industries are prone to risks and always stay in the category of high-risk industries. Let us have a look at them –
- Forex Trading
- Adult dating
- Online gambling
- Financial services
- Telemarketing etc.
It is essential to mention that varied countries may have various lists of high-risk industries. If you are a merchant and need a high-risk merchant account, your acquirer or payment gateway will always help you make the right choice.
High-risk merchant accounts are the saviors as well as supporters of high-risk businesses. They handle multiple threats for the merchants and give them a predictable atmosphere to flourish. The most important thing for a business is to receive timely and convenient payments from customers. Without a merchant account, it is not possible. In fact, without it, the network of payment gateway, merchant, Credit Card Processors, and merchant accounts can never be complete. It is not an exaggeration to say that the high-risk merchant account is the last and the most essential destination for payment processing.
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