The total transaction value associated with digital payments is forecast to make up $8.50 trillion in 2022. In addition, by 2026, it’s expected to register an annual growth rate (CAGR 2022-2026) of 13.10%, thus accounting for a total amount of $13.91trillion. Moreover, digital commerce represents the market’s largest segment with an expected total transaction value of $5.46 trillion this year.
Where can you get reliable and affordable merchant services for your eCommerce business? To make the right choice, let’s compared high risk and regular accounts.
Regular and High Risk Merchant Account
High risk merchant accounts are associated with higher fraud and chargeback rates, which can’t be said about regular or low risk ones. Let’s discuss them in detail and see whether you need a high risk or regular merchant account.
High risk merchant accounts are necessary for businesses that:
- Are tabbed as high risk.
- Accept various currencies, which means they offer services in multiple countries.
- Have an average transaction value of more than $500.
- Have a bad credit history.
- Offer high risk software, digital, and seasonal items need a high risk account.
- Have high volume sales or sell high-priced items.
High risk merchant accounts feature:
- Higher processing fees as compared to regular ones. For example, a standard business would be charged $1.16 for a $50 charge (with an interchange rate of 2.15% plus 8 cents).
- Lengthier application process.
- Higher chargeback fees ranging from $20 to $100 each.
- Cash reserve requirements. For example, the payment processor can withhold a percentage of each completed transaction until a predetermined level is reached.
- Volume caps, which means card transactions surpassing a certain dollar amount each month might be prohibited.
- Other technical requirements. For instance, if a business sells age-restricted products or services, it might be required to use tools to ensure the business won’t sell products or services to underage customers.
The good news is that there are reputable high risk merchant account providers that offer the cheapest rates in the field. So, you need to shop around to find the most secure and affordable merchant processing services that are the most suitable for your own financial needs.
Low risk merchant accounts are necessary for businesses that:
- Trade in a single currency, which means their service or product is available in a single country.
- Have an average transaction value of under $500.
- With zero to low chargeback ratio.
- Don’t deal with subscription services.
- Sells few and low-priced items.
Regular and High Risk Merchant Accounts
If your business deals with a greater risk of fraud or chargebacks, you need to apply for high risk merchant processing services. Otherwise, you can apply for a regular merchant account. Work with a respected processor to get the best for your business needs.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter, and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.