High Risk Merchant Account Pros and Cons

By on April 4, 2018

Merchant accounts are accounts that allow you to conduct credit card transactions online. There are many types of merchant accounts and one of these is called high risk accounts. High risk merchant accounts are considered “high risk” because they are more vulnerable to fraud. This is due to the fact that these accounts are often handled “offshore.” It means that they do not have a physical establishment. Examples of the businesses which are considered high risk are pornographic websites and online gambling sites.

Now, given the fact that these accounts are more likely to encounter fraud, why do people still choose to run businesses that are “high risk”? Here is a list of the different pros and cons when it comes to managing high risk accounts.

The bad side

As stated above, the major downfall of running high risk accounts is the fact that they are prone to fraud. Since most of these businesses conduct their payments online, it can be very hard to keep track of all the transactions your business does. And due to the many hackers that lurk online, you will have to think twice before trusting your clients.

Aside from this, account providers will always think twice before they grant you your account. So it may take weeks or even months before a merchant account provider (MAP) can give you your account. Not only will you have to wait longer than for a normal merchant account, but the rates MAPs will give to you may be too costly to run your business.

The good side

The reason why people even consider running such businesses is because there is a large amount of money involved in these accounts. Many adult web sites earn thousands of dollars every week. These kinds of sites attract lots of attention to hackers who want to get to these materials that these sites offer for free. But if you have the software and the computer know-how to prevent this from happening, then you will not have to worry about these kinds of problems anymore.

Source by Kent Pinkerton

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