eBay Merchant Account

Back in the day, eBay and PayPal’s partnership made the digital payment platform the preferred payment method of choice for people shopping on eBay. But since their split in 2020, eBay has had to find other methods to secure cashless payments.

Today, businesses selling on eBay can accept credit and debit card payments by setting up a merchant account. The only problem though is that merchant accounts aren’t necessarily too easy to obtain if you’re operating in a high-risk industry, which eBay merchants are curiously a part of.

What is a High-Risk Merchant Account?

Anyone operating on eBay (or online, for that matter) would need to accept payments through credit and debit cards. And that’s where merchant accounts enter the picture. Issued by banks and financial service providers to eligible businesses, merchant accounts make it possible for companies to charge buyers’ cards online.

The keyword there however is ‘eligible’. By virtue, conventional banks and financial service providers are painfully conservative. That means they’ll avoid potential liability at all costs — even if it makes them look rigid and unforgiving.

And so we arrive at the concept of high-risk merchant accounts. Numerous factors come into play when assessing the potential risk of a merchant. Ultimately, however, these are the businesses that are uniquely predisposed to chargebacks and fraud.

Why do banks avoid them? Well, for one thing, chargebacks cost money. When buyers seek to reverse a transaction, banks and card issuers end up having to give up profit and may even have to pay penalties. That’s why they charge the involved business steep fees with every chargeback.

According to recent reports, high-risk merchants could pay an average of $100 in penalties for every chargeback they incur. That’s on top of other fees and charges associated with the reversal.

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What Makes a Merchant High Risk?

How do merchant acquirers determine the risk of a specific business? Well, they look into a number of factors. Depending on how many of these items the merchant ticks off the list, they get categorized into low, moderate, or high risk.

  • Location – Merchants located in the USA, EU, Canada, Japan, and Australia typically come with a lower risk of chargebacks because of the more sophisticated digital and cashless security measures they implement.
  • Average transaction cost – Businesses with an average transaction cost over $500 fall into the high-risk category because a single chargeback could cost lots of money, versus merchants with average transactions costing less than $100.
  • Average monthly revenue – Businesses that make more than $20,000 monthly fall into the high-risk category because they’re assumed to have more customers over a short period of time, increasing the odds for chargebacks and fraud.
  • Card-not-present transactions – Accepting card payments online in the absence of a physical card increases the chances of fraud, and thus directly increases the chances for chargebacks.
  • Payment scheme – Statistics show that recurring payments are prone to chargebacks especially when customers make plans to cancel subscriptions and then forget to do so before their accounts are charged.
  • Credit scores – Low personal and business credit scores make a merchant high risk. Managing a merchant account takes a lot of financial wisdom, so applicants with low credit ratings might not showcase enough wit to meet associated fees and charges.

Certain industries tick off more items on the list than others. In the case of eBay merchants, acquirers perceive them as high risk because of several factors that apply to them because of the nature of their business. These include:

Buyers’ Remorse

Buying things online can get tricky, especially since merchants will almost always put their best foot forward when advertising. On eBay, lots of vendors sell used or previously owned goods, which they make look appealing by posting the best images. Descriptions for products can also get wildly inaccurate.

When the products actually arrive at the buyer’s doorstep, there may be an overwhelming sense of remorse. Most often, things look better online than they do in person, especially in the using department. So the tendency for most buyers is to reverse the transaction by initiating a chargeback.


In any case, eBay merchants require card-not-present transactions because conducting business online entails entirely cashless, digital payment methods. To do that, they’d have to accept transactions performed in the absence of a physical card.

When merchants are limited to taking payments purely through card-not-present methods, they increase their risk of fraud. Sometimes, cardholders can have their card information stolen or used without authorization (in the case of families.)

Most of the time, the cardholder will discover the unauthorized payment once they receive their bank statement at the end of the month. Seeing as that their card was used for a transaction they didn’t perform themselves, their likely resolve would be to get their money back through a chargeback.

image of what makes a merchant high risk

How to Open a High-Risk eBay Merchant Account

Often, high-risk eBay merchants struggle to obtain approval from traditional acquirers because of their potential risk. Although they will entertain your application, you’ll often have to supply them with loads of documents that can make the whole process a chore.

Then there’s the issue of negotiating. As a merchant, you have the opportunity to contest any contract terms and penalties they impose. But that doesn’t mean you’ll always get your way. At the end of the day, these providers will protect their own vested interest — even at your expense.

High-risk merchants who manage to obtain approval from traditional merchant acquirers often find themselves struggling with suffocating contract terms, strict and inflexible payout schedules, and sky-high penalties, fees, and charges that trap their business in limbo.

So if you were hoping to open a high-risk eBay merchant account for your business, Shark Processing would be the smartest choice.

Shark Processing — High-Risk Merchant Account Specialists

Bypass the long lines and tedious processes with Shark Processing. We offer streamlined, efficient, and effective merchant account solutions that give you guaranteed placement in record time.

  • An extensive list of merchant acquirer partners
  • 24/7 customer support
  • Safe, secure, and easy processing
  • Simple three-step application
  • Tailored solutions
  • Guaranteed placement
  • 24-hour turnaround

At Shark Processing, we work to advocate for hard-to-place merchants so you can get a high-risk eBay merchant account minus all the legwork. Contact us today to learn more about our services, or send in your pre-application form to get started on your account.


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