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What Is High-risk Business And Which Are The Main Online Business Listing In This Category?

By Author: Patrick Daniel
Total Articles: 32

Most of the online businesses are labeled as a high-risk business only for electronic payment processing and they are forced to choose the unconventional processing method. Here is the definition of high-risk business as per their risk associated with the credit card processing. There are other factors that determine the business is high-risk business—the main factor is what type of business it is? The probability of chargeback, history of business, returns, and method of the payment process. Apart from these factors, the return is the main factor that determines the risk of the business. Processor assumes, if there is a lot of return merchandise then the merchant is not doing the ethical business.

Definition of high-risk business

• These businesses are unable to secure the standard account that’s why they choose the high-risk merchant accounts
• High-risk accounts incur the number of restrictions and high-processing fee that affect the bottom-line of the business.
• Merchants who sell products or things are considered as high-risk businesses
• Merchants who are not able to manage the chargeback are also high-risk businesses.
• Other factors are also there that make the business fall under the high-risk online business
• A business once lost the previous merchant account service provider because of excess chargeback
• Previous merchant account provider has banned the account because of excess chargeback
• Very few or none credit card processing histories
• Online business falls in the category of high-chargeback
• Selling products or services requires high transaction charges
• Subscription-based products and services
• An international business owner runs a business in a different country where chargeback risk is higher
• Running multiple currency businesses and have bad credit card payment history

Types of business fall under the high-risk business

• Travel and advances booking business
• Online dating sites
• Products requiring loyalty like subscription
• Adult sites
• Online pharmacies and health supplements
• Debt collection and telemarketing
• Gaming, gambling, and sports booking
• International business in electronics, custom products
• Other short-term business
• Is your business at risk?

The best method to avoid high-risk is to lower the chargeback—it is a forced credit card refund demanded by the merchant card providers. This occurs when a business faces loss from the sales, loss of merchandise already shipped to the buyers, penalty etc.

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