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customized high risk merchant accounts, High risk credit card processing, High risk credit card processor, High risk merchant account, Merchant Account high risk
Business owners should share their concerns regarding holds, beforehand with the high risk credit card processor provider in order to set up the account accordingly. Most high risk credit card processors put a hold on the funds of the merchant on anticipating risks.
High risk credit card processing
Let us read some more about why funds are put on hold –
- The Risk Categories
Most high risk credit card processors classify merchant accounts on the basis of the risks involved. The risks fall into three categories –
- High charge back ratio
- Fraud
- Closing of accounts
- Merchant Accounts Are Not Saving Accounts
Business owners need to clearly understand that a merchant account has no similarity to a bank saving account. They are simply just a line of credit.
- Understanding the Line Of Credit
Merchants need to understand that high risk credit card processors are like middle men, who are held responsible by the bank for payment, incase the merchant fails to do so. When a consumer useshis credit card, the bank is giving credit to him and is also committing to make payments on his or her behalf. The processors on their part pay the merchant, even before the consumer pays the bank. Hence, the processor is extending a credit to the merchant.
- High Risk Credit Card Processors as Middlemen
Processors act as middlemen, between the merchants and the bank. They take complete responsibility for distributing credits and debits. They are the ones who will be held responsible if the merchant declares bankruptcy or turns out to be a fraud.
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