How Time in Business impacts High Risk Merchant Accounts

It may also refer to the time a merchant has been accepting credit cards, generating credit card processing history or even operating a merchant account. This is one major criteria used for determining the risk associated with a merchant’s card processing.

Obtaining merchant account approval is exactly like acquiring an unsecured loan as there is always a risk of potential chargeback on every processed dollar, which ultimately turns up as a liability for the acquiring bank. Similarly if a merchant cannot pay back the chargebacks, the bank stands liable for the same. 

High risk merchant account

Rick Factors for High Risk Merchant Account Providers

The major risk factors include:

·         Higher incidents of chargebacks

·   Higher incidents of crossing the chargeback thresholds set by the card associations, resulting into fines and other sanctions

·         Higher incidents of merchant failures

Newly established business poses greater chances of merchant failures and inabilities to pay chargebacks and fines. As high risk merchant does not always guarantee success, especially when they are new, so there is always a possibility that the business can fail to meet its obligations to the high risk merchant service providers for repayment of chargebacks and fines.