A merchant account which functions as a line of credit or the company or merchant to receive payments from credit and debit cards, used by the potential person. The bank that provides the merchant account is called the ‘acquiring bank’ it lends online money to the merchant for shopping and other facility. The bank that issued the consumer’s credit card is called the issuing bank and one more important component of this gateway, which handles transferring and transaction information details from the consumer to the merchant.
A payment processing contract is also offered by Acquiring bank or the merchant may need to open a high risk merchant account with a high risk payment processor. It helps to collects the funds and transfers them to the account at the acquiring bank. In high risk merchant account, there are excessive risk and tension about integrity of the funds, and the higher risk of possibility on bank may be financially responsible in the case of any debt or fraudulent. Payments to a high risk merchant account are carried on increased risk of fraud, risk of charge back, refunds or reversal. As for example someone may others forged credit or debit card to make new purchases or he might attempt to execute an advance authorization transaction using a debit card with low funds. This involves higher risk for the bank and the payment processed. They will have to deal with the fallout of dealing with the fraudulent. Another big risk factor is involved in E=commerce because businesses do not actually see an imprint credit card. The online order is made and it can increase the risk of fraudulent.
The time when merchant applies for a merchant account, the payment processor, or other merchant account provider factors are considered before settling on a considerable merchant provider. It is often possible to negotiate low rates. Before choosing which high risk merchant account one should request multiple quotes to the provider to use their processing requirements?