Why am I considered a high risk merchant?
High risk doesn't mean YOU are high risk
High risk credit card processing means that your business type runs a higher than normal risk for the processing of credit card transactions. Being told you are a "high risk merchant" does not mean that you or your business are somehow risky; rather, it usually means your industry-type encounters one or more of the following...
...Chargebacks
Certain industries, despite their best efforts to serve their clients and keep them happy, run a larger risk of chargebacks. Some of these industries include Travel, Debt Collections, Guns/Ammo, Adult content, Gaming and Gambling. There are approx 30 other industries as well. If your business is of a type that (historically) has a higher than normal percentage of chargebacks (more than approx 1%) then your business will be considered a high risk merchant.
...High Volume
Not every processor has the ability to handle large volumes of transactions, so your very successful business may actually have to pay MORE as a high risk merchant. The number of individual transactions is also important. A merchant processing $1 million per month with 500 transactions is generally considered lower risk than another merchant who processes $1 million per month but with only 50 transactions. We use this information for you, to leverage from the processors the lowest possible rates for your specific business model.
...Foreign Customers
Merchants who accept credit cards from other countries usually have a higher than normal percentage of chargebacks and experience more fraudulent transactions than merchants accepting cards from within their home country. For this reason, merchants doing business primarily outside of their home country can expect to be classified as high risk merchants. We work with international processors and banks of sterling reputation who are accustomed to processing transactions for merchants with an international customer base.