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Understanding High-Risk Merchant Accounts Banks that provide merchant account services are aware of the high risk that exists in the industry due to a high factor of risk. There are various businesses and industries that merchant account providers refuse to service because the businesses within these industries have a high factor of risk. Even though you could have books to show your reliability, many banking service providers may still shy away. Here is an outline of the major reasons that make your business a probable high-risk merchant business. The Respect of Your Operating Industry. The respect that any industry is given relies on how business is carried out within that industry. For instance, most internet-based businesses are categorized as high risk businesses because they have a high potential of data theft and traffic. The high traffic volume of trading activities also implies that large volumes of data may be stolen at one go leading to big losses.
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Many businesses with a possibly high level of fraudulent activities and potential consumer distrust can be regarded as a high-risk business. For instance, the gambling industry is created of a connection of many sketchy industries. These industries have an amorphous link, which makes them to be counted as a part of the high-risk industry. Some other types of businesses, which have dealings that cannot be well-analyzed and comprehended such as the internet supplement industry, can also count as a high-risk industry. Charge Backs. All businesses with high numbers of charge backs such as the businesses in the travel industry are also considered to be in the high-risk category. The business units in these categories are often classified in this way because customers in these businesses are fond of making cancellations and filing for refunds. These types of business dealings can lead to an exposure to fraudulent activities. There is no merchant account service provider that would like to experience many charge backs because they could make the business vulnerable to high-risk credit card processing. The Time Your Business has been in Operation Another factor to consider when finding out whether your business is a kind of high-risk business is based on the length of time you have been in operation. If your business is in a relatively new industry or your business has been in operation for a few years then it is difficult to prove that you are reliable or sustainable. This happens partly due to the lack of a comprehensive track record. Merchant accounts are provided to users that show a high potential of success as portrayed in the records of business. In essence, the longer your business has been running the higher the chances that it will be eligible to get an account.

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