The Process of Obtaining a Merchant Account
Ach processing is simply the process wherein the merchant transactions are being facilitated between the merchant per se and any bank or financial institution. This will reflect the contract of the bank that is the one to accept the payments for the products or services on behalf of the merchant. This is very useful for those merchants who have online offshore business since the bank is very essential in the processing of the ach transactions.
There are different classifications for the ach merchant accounts that are identified by the banks or any financial institution based on the risk profile of the account. There are basically two major types of merchant accounts. The first category is the normal account which basically describes the ability of the merchant to access the card of their customer as well as ensure the legitimacy of their client, making the risk in a minimal level. Setting up a merchant account for businesses that have minimal risk will be easier to do.
The second type of this merchant account is the high risk accounts which definitely show the privacy of the customer and therefore not allowing the actual verification of the customer. That is why the solution to this type of issues to get advice from a company that handles decision making for difficult business accounts. The accounts that fall on the high risk category are those involved in online dating, adult entertainment, online gambling, online auctions and debts services, VOIP merchants, online tobacco, multilevel marketing, and other businesses that don’t have to seek for the physical presence of their customers. Therefore, there is a really high possibility that the business transactions might not be legit at all and you might just be a victim of a fraud activity from these high risk categories. Naturally speaking, the high risk ach merchants are often dreading for charge back for the banks but these are all questionable. Researches have proven the influence of high risk merchant accounts in the growing number of fraudulent transaction cases.
The recommendation of having a partner reputable bank to handle the online ach processing is a very good idea for the merchants. Choosing the wrong bank will make things worse.
The banks preparedness for the high risk accounts include their strict implementation of the guidelines that are already implemented by their underwriting department. These banks will have to turn down those accounts that didn’t qualify in their basic standard.
Since there is limited availability for the high risk ach providers, the tendency on the rate charge to the merchant is to shoot up and be more expensive. Banks and other financial institutions can also revise their rates whenever they feel that there is a need to do so. But still there is good news to this. At present, banks are very supportive to the analysis of setting up an account.
Researched here: here are the findings