When PayPal Drops Your High Risk Merchant Account
Where To Turn When You Lose Your PayPal Merchant Account
When an aggregate high risk merchant account, like PayPal, kicks you off their platform or freezes your account, it can be confusing as to what to do next. Signature Payments is here to answer all of your questions. We take the guesswork out of what your next steps should be when applying for a high risk merchant account after losing your PayPal merchant account.
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What is a Dedicated High Risk Merchant Account?
A dedicated high risk merchant account, like one you might have acquired with Signature Payments, is an account where the business has its own merchant ID. The merchant is not sharing a high risk merchant account with several other businesses. This is different than an aggregate high risk merchant account like PayPal. These aggregate companies uses one merchant account for an entire portfolio of merchants.
A business has far less control with an aggregate high risk merchant account with PayPal than they do with a dedicated high risk merchant account. With dedicated high risk merchant accounts, transactions between the merchant and the customer are deposited directly into the business bank account.
With an aggregate high risk merchant account, the funds from a transaction are sent to the account provider and then are deposited into the merchant’s bank account. PayPal, the aggregate high risk merchant account provider, also makes their own rules and can make any changes they deem necessary without your consent.
After Your High Risk Merchant Account Is Dropped
Chances are, if you were dropped from one of the major aggregate high risk merchant account providers, like PayPal, it is only a matter of time before you are dropped from the others.
This means that your next step will be to apply for a high risk merchant account with a company that specializes in high risk merchant accounts. This provider can then assign you a specific merchant ID.
Reasons For Dropped Payment Accounts
There are several reasons why a business gets flagged as high risk. It’s common that PayPal and other aggregate merchant providers to accept most merchants only to shut their account down a few months later.
Here are some of the most common reasons banks and payment processors consider your business as high risk:
- Large amount of chargebacks
- Higher risk of fraud
- Reputational risk
- High ticket prices
- State and Federal Regulations
- Continuity billing
Clearly, it is best to seek out a high risk merchant account payment processor that has great relationships with several banks.
It’s even better when that merchant processor has an in-house underwriting team that will cross every T and dot every I during the application process. They make sure that you are presented in the absolute best ways possible before your application is sent to a bank.
Unlike PayPal, this kind of a high risk merchant account payment processing company is incredibly difficult to find. That said, here at Signature Payments, we are the high risk payment processing company that meets those exact