Many financial institutions are tightening up guidelines and raising fees. These days even acquiring banks are cracking down on various business types. No company wants to take on a possible financial loss. There are merchant services providers out there that specialize in high risk business, but you have to be prepared to provide all the information that is requested.
There is always a way to get a merchant account for any business type. Some business types such as Adult, MLM, Telecommunications, Escort Services, Internet startup companies and Travel may require higher rates, and in some cases a reserve account. The amount you may be required to put in a reserve account varies, based on your volume and business type. Most merchant services providers typically are looking to protect themselves against chargebacks. A consumer can dispute a charge for up to 180 days after the purchase, so processors create reserve accounts in case a chargeback does occur. In my experience, banks like your chargeback ratio to remain under 1%. Otherwise, merchants can be fined and have their merchant account turned off.
There are always offshore options. Offshore processing may be the only option for some business owners and can be costly with rates as high as 10%. Typically, merchants have to pay wire transfer fees as well as high transaction fees. To learn more about these and other options, contact your merchant services provider.
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