Facts about Paypal High Risk Merchant Account

A PayPal High Risk Merchant Account is specifically for companies that operate in high risk industries. A high-risk industry is considered high risk for many reasons, including chargeback rates, other legal concerns, and companies that are unstable financially, to name a few. Examples of high-risk businesses may include services in travel, online gaming, and entertainment. PayPal offers monitoring of these high risk accounts and may require the merchant to follow stricter conditions, such as withholding reserves, charging higher transaction fees, or extending the period that the merchant receives its funds for longer periods of time. If the merchant falls into a high-risk category, it is likely that the merchant may be under much stricter scrutiny prior to opening the account than on an ongoing basis. It is also very common for PayPal to suspect any type of irregular or unusual activity relative to the account and limit or freeze the account altogether. In order for a high-risk merchant (business) to assess and mitigate any risks, they must also maintain transparency, follow all PayPal rules and regulations, and offer high quality customer service. Therefore, while there are many disadvantages to being a high-risk merchant, PayPal is a reputable processing option that is reliable and offers buyer protection. A legitimate PayPal account is often a reasonable option for a merchant and is manageable with a well-defined operational control enforcing robust risk management. Merchants must also have backup processing options in case any accounts are limited or eventually terminated.