Low Risk Merchant Accounts

The world is becoming full of traders both online and offline and it is a normal part of trading practice these days to be able to take money for goods from credit and debit cards. But how easy is it to obtain these facilities and at what cost?

As the worldwide credit crunch has bitten we have seen a major clampdown by the banks on their criteria for offering facilities. One of the major banks in the UK routinely declines over 70% of all applications for the facilities offline and more so for online facilities as they perceive the risk for offering the service to have risen disproportionately to the potential rewards.

All the suppliers are looking to set up low risk merchant accounts . These accounts ideally will have a low to nil chargeback rate caused by customers being dissatisfied with their goods and claiming their money back. Generally, when this hits a certain rate for a particular industry type, the account will be closed but the banks are getting very touchy about this and some sectors are flatly refused.

One way around the problem of getting the right facility is to set up an Offshore account. These can be very expensive, charging maybe 5% and taking a deposit plus only releasing 80% of the funds initially with a 6 months reserve. But they won’t close you down. Another way, if collecting money online, is to use one of the plethora of third party processors, like Clickbank or Netbanx who will charge rather highly for their service but you are almost 100% certain of being able to take money within 7 days. However, it is not so easy if needing to take money offline and third party suppliers are very few and far apart.

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