A high-risk merchant account will be needed by a business that has an unusually high sales turnover, a huge volume of sales, a majority of sales from the Internet and/or products and services that have enhanced risks of fraud. This is particularly true of e-commerce businesses that sell intangibles such as subscriptions, consulting services or software downloads. Like any online sales transaction, there is always an increased chance of fraud when a credit card is used for a remote sale and the card holder is not present.
For businesses dealing in high-risk goods or services it is increasingly difficult to get a traditional merchant account. Merchants running high-risk firms will discover that, even when most traditional account providers do open such accounts, they are normally subject to heavy fees, and there may possibly be a security deposit requested. Some firms have ended up opening a high-risk merchant account through international or offshore sources as they could obtain one through normal channels.

Protecting Your High Risk Merchant Account

Acquiring banks and transaction processors can terminate contracts with merchants for any number of risk-related reasons. After this, the merchant will end up on a list called the Member Alert to Control High-Risk Merchants (MATCH) that banks and their licensed "acquirers" must check before opening accounts with prospective merchants.
The MATCH program is now maintained by MasterCard International and used by them as well as both Visa USA and American Express. Some people will refer to this list by one of its old names, the Combined Terminated Merchant File (CTMF) or Terminated Merchant File (TMF), but it is the MATCH program that is active today, and worldwide, too.

How to Get Approved for a High-Risk Merchant Account

Many account providers themselves, as well as a large number of merchants, have an incorrect or incomplete idea of what a MATCH listing says about a high-risk merchant account. Most importantly, it says that the subject merchant committed at least one, specific act that indicates to the acquiring bank and/or processor that an acceptable level of risk for a non-swipe merchant account is likely to be, or has already been, exceeded.

These specific disqualifying acts include the following:

• Large number of chargebacks caused by poor merchant business practices
• Too many deposits for transactions that were not authorized properly
• Conviction(s) for credit or debit card fraud
• Numerous deposits for what are later shown to be counterfeit transactions
• Deposits for transactions that involved goods or services of another merchant ("laundering")
• Any reasonable suspicion that a merchant is committing fraud