In the retail world, every merchant needs to have a safe and effective method to collect money from customers. These days, a significant percentage of shoppers choose to buy items online rather than local brick and mortar stores. Therefore, there has to be a convenient way for making electronic purchases when shopping online. The eCommerce industry has evolved tremendously to accommodate the virtual retail marketplace. Shopping carts are integrated into online stores that accept credit cards as a form of payment. A merchant account is used to collect money from any purchases made by credit card and other forms of electronic transfer.
Some online store owners have the option of opening up a merchant account that comes with minimum fees. For example, most credit card processing agencies charge a commission fee that is based on the total transaction made by each customer. Some companies might charge flat monthly rates for managing merchant accounts. Certain websites may have a difficult time with opening up a merchant account for several reasons. For instance, some merchandise is considered to be high risk according to payment processors. Such an attitude is developed due to the frequency of credit card fraud. For example, thieves use stolen credit and debit cards to buy items in bulk. The price per each product is inexpensive and therefore thieves think that it's possible to get away. When there are disputes with credit card payments, the merchant account may be temporarily frozen due to investigations.
Certain credit card processors simply do not want to accept high risk clients. Some products qualify for a high risk label including traditional tobacco cigarettes and modern electronic cigarettes. Adult websites also qualify as being high risk merchants that sell services and subscriptions online. Opening up an e-cig merchant account is an example of managing a high risk eCommerce operation. Ethical merchants agree to a full investigation that may result in complete refunds of unauthorized credit card spending.
Duet to taxes and other fees collected by the government regulations, some controlled products in the United States are part of the high risk merchant industry. Great merchant account managers offer viable offers for online shops that would like to sell “risky” items to the rest of the world. International shipping of certain products also contributes to a high risk of a merchant account. For example, shipping and returns may be very expensive for small online businesses.