HIGH RISK MERCHANT SERVICES

Merchant services are used by a company to enhance its business by processing the transactions in which the clients or customers pay through credit/debit cards. These services are necessary for a company's business to grow by providing its customers the option to pay through different methods some of which are credit cards (Visa/Master Cards), debit cards, equipment leasing, sales, cheques and many others. Different online stores and company's on internet have their business which consumes Merchant Services and helps the commerce to grow. For providing online services, a company needs to have e commerce sites which do online transactions by accepting online payments. This way the companies can increase the sales of their product and can raise their market value significantly. Such companies have to get merchant account from a merchant service provider to ensure safety and security of their dealings with customers.

Some of the businesses are low risk while some involve high risk and the Merchant Service Providers have to be very selective and vigilant while providing them with merchant accounts. Some of the High Risk businesses involve;

-    Travel agencies
-    Online pharmacy
-    Online gaming
-    Online dating
-    Prepaid phone cards
-    Online jewelry sales
-    Online cell phone sellers
-    Online car selling
-    Online Insurance services

This type of business is considered high risk because their charge back potential is not always enough. Moreover, these types of businesses can depart suddenly and have the risk of fraud and no credit history. Some of these businesses provide services to the customers who might not be able to pay for the services or show fraudulent behavior, hence making the company lose its money. These businesses may not be able to pay back to the merchant because of loss in their dealings. Merchant service providers are at a risk of losing their own money by providing services to such companies, therefore they always have to check the credit histories and past standing of the business proprietor in order to approve them for services. Furthermore, because of the higher risk involved in these businesses, the merchant services provided to such companies are comparatively expensive. The banks and other processors face a high financial risk while providing services to such businesses. Merchant Service providers can reduce this high risk by providing solutions which ensure the safety of transactions using different secure and reliable transaction processing software.

Merchant service providers have to offer higher security and SSL (Secure Socket Layer) certifications in order to build a trustworthy relationship with their customers. Merchant service providers provide Online Merchant accounts to their customers for transaction processing. Sometimes the card consumers need to be provided with extra benefits and discounts to encourage their contribution in e-commerce. Some of the popular online merchants today include paypal, amazon.com, pay quack etc. Master cards are very common nowadays for the purpose of shopping online. A limit is put up on the credit of master cards up to which the consumer can borrow money or purchase things.

In some cases a dispute may arise between the merchant and the customer. For Example, a customer may claim that his/her card has been charged while the services or the product was not delivered. In such case the merchant and customer often have to establish a strong bond, so as to clarify and negotiate such matters. The credit card issuer may help in such cases by checking the payments made by the card holder. The cost incurred to resolve the dispute is later charged back using Charge back fees by the processor. These types of issues also create high risks for the merchants or customers depending upon the dispute intensity.