An aggregate high risk merchant account is not perfect, but we’re finding it is often the answer for a merchant whose risk level, for whatever reason, is of concern to an acquiring bank. In the current climate of high risk e-commerce, payment processors and acquiring banks often offer aggregate merchant accounts to enable high risk merchants the opportunity to process payments.
What is an aggregate merchant account?
An aggregate merchant account is also called a ‘shared’ merchant account in which an acquiring bank places high risk merchants on the same account. Where retail, low and some high risk merchants have their own custom merchant accounts, aggregate merchant accounts house several merchants who also share one billing descriptor. Typically, this is often an option for the highest of high risk industries – those that deal with high chargeback rates, risky industry types and low volume.
An aggregate high risk merchant account has its benefits and challenges.
2 (huge) benefits of an aggregate high risk merchant account
One belief that Instabill stands by is that all legal, legitimate merchants should be given the chance to process payments – whether they be credit card payments, check solutions or those by mail order/telephone order. We have always taken pride in the fact that, through our partnerships with many domestic and offshore acquiring banks, we can find payment processing solutions for high risk and hard-to-place businesses.
This is where an aggregate high risk merchant account is invaluable.
High risk merchants who have trouble finding a dedicated, custom merchant account can usually find an aggregate solution. It is often the route a high risk merchant must take in order to process transactions over their website.
Additionally, high risk aggregate merchant accounts are havens for merchants whose volume is too low for a traditional merchant account. With an aggregate solution, each of the merchants make up the account’s total volume, thus easing the burden of the low volume merchant.
W2W4 with an aggregate merchant account
There is a significant degree of risk in boarding a high risk aggregate merchant account. Since it is a shared account with other merchants likely in different industries, there are three potential disadvantages.
- High chargeback rates: Since all the merchants on an aggregate account share the billing descriptor, a consumer making a purchase from one of them may not recognize the billing descriptor on their credit card statement, and thus, may file a chargeback.
Merchants using a shared billing descriptor must be proactive in communicating to the consumer the precise verbiage that will appear on their credit card statement.
- One bad apple: With an aggregate merchant account, all it takes is one merchant on the account with excessive chargebacks, an instance of fraud or some other transgression, and the account could be shut down by the acquiring bank. Merchants are (blindly) relying on other merchants on the account.
That said, it is always proactive to have a contingency plan in place to accept payments in cases of lost merchant account privileges. In such a case, check solutions are a viable solution and can carry a merchant over until s/he finds their next solution.
- Aggregate accounts usually offshore: Since most aggregate high risk merchant accounts are through offshore banks, merchants on an aggregate account will likely pay higher rates than they would with a dedicated merchant account.
High risk credit card processing with Instabill
Instabill offers merchant account solutions for businesses of all risk levels, e-commerce, point-of-sale and MOTO. We do our collective best to find the best payment processing solutions for merchants and remain as consultants for the life of your merchant account relationship with Instabill.
It always starts with a 10-minute conversation. Let’s discuss the possibilities today at 1-80-530-2444.