Merchants are either considered low risk or high risk. Generally low risk merchants are retailers or storefronts that accept credit cards with the card physically present with the person that it is issued to. Due to the card being present during the transaction, the merchant can verify the card and the person causing the risk for fraud to diminish significantly. In addition, a signature is required helping to reduce the merchants liability.
On the other hand High Risk Merchants are companies that accept credit cards without the card being present. These companies or retailers are known as Mail Order / Telephone Order ( MOTO) companies or Ecommerce companies. Since 100% of the transactions are done without the card being present, the risk for fraud goes up dramatically, resulting in greater financial loss.
Other factors are taken into consideration as well. Such as the scope of business as well as the merchants credit score. In general banks charge High Risk Merchants higher rates because of the increased probability of fraud. A lot of banks do not even accept some High Risk Merchants such as Ecommerce Merchants such that sell products online such as Vaporizer Merchants, Electronic Cigarette Merchants, Ejuice Merchants, and Adult Merchants.
Merchant Discount Rate was founded on the principle that all businesses should be able to accept credit card payments at competitive rates. MDR specializes in offering High Risk Merchant accounts to many different industries including:
Electronic Cigarette Merchants
Collection Agency Merchants
And much, much, more.
To learn more, fill out the form to the right.