What is considered a high-risk merchant account?
There are three types of merchant accounts:
A company is considered high-risk if several criteria are met:
A startup business
Risky industry (with high chargeback possibilities). When the chargeback ratio hits 1%, the merchant may face higher processing fees
The company is in financial difficulties
Companies with a bad credit history
The company sells goods and services to high-risk countries (Iran, The Bahamas, Cambodia, Barbados, Guinea-Bissau, Iraq, Mali, Swaziland, Mozambique, Myanmar, Jamaica…)
Questionable goods and services
The company’s owner provided inaccurate information about the activities of the business and its legal address
Monetary transactions do not correspond to the declared activity
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Frequently, foreign banks refer to the following areas as high-risk products and services:
Casino or internet gambling;
Sale of medicines;
Bitcoin or forex trading;
Sale of firearms;
Sale of jewelry;
Financial service providers who specialize in high-risk businesses tend to charge higher fees than low- to medium-risk clients.
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