In April, the American Bank, Chase, closed the merchant accounts of its customers in the adult entertainment business. It also closed the personal accounts of the individuals it knew to be associated with those businesses. At the time it said Chase had taken this action because these merchant accounts were considered ‘high risk’. It now seems that the Chase decision may have been taken on moral grounds. However, it does highlight the power of a bank when it comes to deciding a business’s ability to trade.
What is a high risk merchant account?
Merchant accounts for eCommerce businesses in the adult industry are not the only ones considered high risk. Other high risk industries include travel, gambling, tobacco, and even car dealerships. They are considered high risk because they are believed to be more susceptible to online payments fraud.
The question has to be that if a bank can simply close a high risk merchant account in the adult industry at will – and some of the closed accounts have been held for decades – then how long will it be until banks begin to close other high risk merchant accounts?
Protect your business from the banks
If you operate as what is considered to be a high risk merchant, then you should be aware of the power of your bank to close your merchant account, disrupt your finances, and do irreversible damage to your business.
Fortunately, there are payment providers that specialise in high risk merchant accounts. They understand the risks of fraud when accepting online payments, and have specific experience in dealing with high volumes of online payments through a high risk merchant account.
If you’re unsure of the risks that banking rules pose to your business, or indeed how your industry would fit into the risk profile of merchant accounts, then contact North Payments today. Our experienced staff will be happy to help you with your merchant account enquiries.