Types
of Credit Card Merchant Accounts
Low-Risk, High-Risk & High-Volume
- By iMerchantNetwork.com
Before
you can apply for an internet/MOTO merchant account, you
must understand certain classifications of business type:
Low-Risk: Internet
/ Mail-Order / Telephone Order
This
classification fits most of you reading this. It includes
many of your everyday low ticket size tangible products & services
(like books, electronics, dvd’s, web hosting, etc.)
Discount
rates range from 1.99% - 2.49% and higher. Per transaction
fee is typically around 30 cents. Approval time is usually
24-72 hours (with a few companies now offering instant
approvals).
High-Risk: Internet
/ Mail-Order / Telephone Order
This classification
will fit a few of you. It includes adult, casino, eBooks,
gaming,
business opportunities, MLM, travel, telemarketing and
other more risky ventures or products/services you market.
If you
find yourself whispering into your friend’s ear when describing
your business – chances are it’s high-risk. High-Risk rates
and fees WILL be higher than low-risk and require a rolling
reserve of 5% - 10% at all times (meaning the bank holds
on to this amount of processed sales revenue for a predetermined
about of time before they release it to you). Discount
rates generally range from 6% - 15% plus a transaction fee
(anywhere
from 30 cents to $1). Approval time is usually 1-2 weeks
after a thorough review.
High-Volume: Internet
/ Mail-Order / Telephone Order
This classification
fits mainly high-risk businesses that process over $100,000+
per
month (though some low-risk businesses may be reclassified
with the additional necessary volume requirements). Depending
on your existing merchant relationship, you should seek
out a separate high-volume solution with
a bank/processor designed to handle your growing sales volume
efficiently
(either in the USA or Offshore). Approval time is usually
1-3 weeks and you MUST provide past processing statements
for banks to believe you require this volume. The discount
rate usually ranges from 5% - 15% (depending on business
type) plus a transaction fee (anywhere from 30 cents to
$1). The benefit is that these banks/processors permit UNLIMITED transactions
(ie: they don’t shut you down due to rapid growth, etc. © 2005
iMerchantNetwork.com
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