Many people think that because they run a legal and legitimate business there is no reason to have multiple merchant accounts. Why would a bank shut down a perfectly legal and clean account? Regardless of whether your merchant account is at risk of being shut down by the processor, there are many benefits to having multiple accounts if you are a high risk merchant
In 2013, the Department of Justice instituted Operation Choke Point, aimed to crack down on fraud and money laundering by investigating banks and the business they do with companies that have a high risk of fraud and money laundering. However, it had unintended consequences that ended up shutting down many legitimate businesses in the process.
Have you been denied or declined for a standard merchant account? Maybe you are in an industry that processors classify as high risk, such as tech support or online neutraceutical sales. If so, you most likely need to apply for a high risk merchant account. There is no reason to be distressed by this, there are many
High-risk merchant accounts have unique features that conventional merchant accounts do not have. However, it is important for merchants to choose the right high risk processor for their industry.
A chargeback ratio is the number of chargebacks compared to the number of transactions for a business. A low chargeback ratio means that out of all the transactions the business has, only a small amount request for a refund. Credit card associations and banks / processors will drop businesses with excessive chargeback rates.