Finding an Online Merchant Account

online high risk merchant accounts

Congratulations! You’ve set up your very own eCommerce website and can begin selling your products online! But wait, aren’t you forgetting something? You’ll need to be able to accept payments. In order to accept credit card payments online, you’ll need an online merchant account. While this sounds simple enough, not all merchant accounts are the same.

To find the right merchant account for your online business, you’ll have to understand how this account interacts with the other necessary elements for selling products online. This includes payment gateways, payment processors, and online shopping carts.

What Is a Merchant Account?

A merchant account is a business account. Your customers will make a payment on your website, and the funds from an approved transaction are deposited into the merchant account.

After the payments are verified, the funds are then transferred to your business bank account. A merchant account and your business bank account are two separate accounts. Your merchant account is simply the middleman between your customers’ money and your own.

When a customer pays via credit card, there are two major parties involved: the issuing bank and the acquiring bank. The issuing bank gives the customers their credit cards and collects payments form them while the acquiring bank requests and collects payments from the issuing bank and then releases them to you, the merchant. 

What Is a Payment Gateway?

A payment gateway connects your online store to your payment processor, which facilitates your customers’ online transactions. These gateways enable transactions online – integrating with your online store to capture the payment details for each transaction.

The payment gateway sends this information to your payment processor or acquiring bank, which will take control of the process.

The payment gateway will then forward an approval or decline message back to the merchant based on whether or not the bank has accepted the payment. 

Direct and Third-Party Processors

When you’re looking for an online merchant account, you’ll also come across third-party processors. Third-party payment processors are companies that interface between the merchant and your merchant services provider. This will allow you to accept payments without setting up a merchant account.

Third-party processors use one large merchant bank account for all of their clients and businesses that they work with so you can start processing almost immediately. While these may sound like ideal solutions, third-party payment processors have higher transaction fees, and your account isn’t stable: one wrong move from one of their other clients may also impact you.

A merchant account will be much more effective, especially for businesses who want stability and lower transaction fees. 

Finding an Online Merchant Account

When it comes to shopping around for the best online merchant account for your business, there are a few things you should consider:


The standard for online high risk merchant accounts is a fixed-length contract with an initial term of three years, a renewal clause that extends the contract for one year, and an early termination fee if you break your contract by closing your account early. See more about high risk merchant service providers.

Unfortunately, this type of contract forces you to continue working with a company unless you take specific steps to close your account at the end of the term. Early termination fees can be expensive and unfair, which can and will discourage you from switching to a better provider.

Some providers even include a liquidated damages clause, which can cost you thousands of dollars if you close your account before the contract is up.

Long-term contracts are not ideal for many merchants and some providers do offer month-to-month billing with no termination fees. This means you’ll be billed every month until you close your account. You won’t be charged for closing it, although typically you’ll have to provide at least 30 days’ notice in order to do so.

Some providers will also have you sign a three-year contract that doesn’t have any early termination fees, but take note: this isn’t the same as month-to-month billing. While you won’t have to pay the penalty for closing early, you’ll still be under a long-term contract.

Make sure to read the fine print of any contract! Your provider can continue to deduct account fees long after you close your account if you don’t follow the specific procedure laid out in their contract. 

Processing Rates

How much you’ll pay to process a credit card transaction will differ from merchant account to merchant account. Keep in mind that your provider will also need to deduct interchange fees which will be paid to credit card associations.

They’ll also have their own set of fees that go to the processor and the merchant account provider, although these fees are typically small. How these companies determine your processing rates varies from one provider to the next, but there are generally four common pricing variations:

  • Flat-Rate Pricing
  • Tiered Pricing
  • Interchange-Plus Pricing
  • Subscription Pricing 

Account Fees

In addition to your online merchant account provider charging fees for your transactions, they’ll also charge a number of monthly, annual, and incidental fees. These fees also vary from one provider to the next. Your fee schedule may also be customized for your business.

You can also expect to pay a monthly account fee to keep your account active and in good standing. Finally, you may also have to pay a gateway fee for the use of their payment gateway. 

Payment Methods

You’ll, of course, need to accept credit and debit card payments. However, you should also consider alternative payment methods such as ACH payments and more. If you want to be able to let more customers purchase their products the way they want, you need to find a merchant services provider who will give your customers these options. 

Customer Support

When working with a merchant account provider, it is absolutely crucial that they’re available to answer all of your questions when they arise. Good customer service is critical when you operate an eCommerce business.

You rely on the ability to accept credit and debit cards so lightning-quick response times are an absolute necessity. Make sure when you’re shopping around that you ask questions about their customer service availability and other tools they offer to help merchants when they need it the most.

Are you looking for an online merchant account? Contact us today or apply on our website.

We Can Get You Approved!

Having trouble getting approved for your high risk merchant account? Did you know HighRiskPay approves 99% of all applicants!