Let’s clear the air about the term “high-risk.” It’s not a judgment on your business’s integrity or a sign that you’re doing something wrong. It’s simply a classification used by financial institutions for industries with a higher statistical likelihood of chargebacks or fraud. Many successful, legitimate companies operate in these categories every day. The key is finding a payment partner who understands the nuances of your industry instead of penalizing you for them. In this article, I’ll break down what this classification really means and help you evaluate the top high risk merchant account providers so you can find a partner who is equipped to support your business.
Key Takeaways
- View a High-Risk Account as an Essential Tool: This specialized account isn’t a penalty but a solution built with the robust security and stability your industry needs to process payments without interruption.
- Choose a Specialist, Not a Generalist: The best provider will have proven experience in your specific industry, offering transparent fee structures and advanced tools to proactively manage fraud and chargebacks.
- Proactively Protect Your Revenue Stream: A successful payment strategy requires more than just processing; it involves carefully reviewing contract terms, actively monitoring transactions, and having a clear plan to manage customer disputes.
What Is a High-Risk Merchant Account?
Let’s clear the air on this one. A high-risk merchant account is simply a specialized payment processing account for businesses that traditional banks and processors view as having a higher potential for things like fraud or chargebacks. It’s not a penalty or a sign that you’re doing something wrong. Instead, it’s a tailored solution that acknowledges the unique challenges of your industry or business model.
Think of it like this: a standard, low-risk account is built for a straightforward retail shop with predictable, in-person sales. A high-risk account is designed for businesses with more variables—like those selling high-ticket items, operating globally, or working in industries with stricter regulations. These accounts come with more robust security features and support systems to protect both you and your customers, ensuring you can reliably accept card payments and keep your business running smoothly. It’s all about matching the right tools to the right job.
How Are Businesses Classified as High-Risk?
So, what lands a business in the high-risk category? It’s usually not just one thing, but a combination of factors related to how and what you sell. Processors look at your industry’s reputation—some sectors, like CBD, travel, or subscription services, are automatically considered higher risk due to historical data on returns and disputes. They also consider your sales volume and average ticket price; selling expensive items can increase the financial risk of a single fraudulent transaction.
Other key factors include your processing history, especially the number of chargebacks you’ve received. Selling internationally also adds a layer of complexity with different currencies and fraud patterns. Even being a new business without an established processing history can place you in this category. It’s less about your personal credit and more about the statistical risk profile of your business model.
Common Myths About High-Risk Processing
One of the biggest myths out there is that a “high-risk” label is a black mark on your business’s reputation. That’s just not true. Many successful, legitimate, and well-run companies use high-risk merchant accounts. The classification is an underwriting decision made by financial institutions based on potential risk, not a judgment on your business practices or integrity.
Another common misconception is that you’ll be stuck with terrible terms and outdated technology forever. While fees can be higher to offset the processor’s risk, a good high-risk provider will offer competitive rates, modern payment gateways, and proactive support. The goal of a specialized processor isn’t to penalize you; it’s to provide a stable, secure payment infrastructure that a standard provider can’t.
Why Your Business Might Need a High-Risk Account
If your business falls into a high-risk category, trying to get by with a standard merchant account can lead to sudden freezes or even account termination, which can be devastating for your cash flow. A high-risk merchant account is essential because it’s specifically designed to handle the transaction patterns and challenges of your industry. It allows you to accept credit and debit card payments without the constant worry of being shut down.
Ultimately, this type of account is a tool for stability and growth. It ensures you have a reliable payment partner who understands your business and is equipped to support it. For industries like online gaming, firearms, adult entertainment, or debt collection, it’s not just an option—it’s a fundamental requirement for operating and scaling a successful business.
The Best High-Risk Merchant Account Providers
Finding the right payment partner can feel like searching for a needle in a haystack, especially when your business is considered high-risk. The good news is, you have options. Many providers specialize in exactly what you do, offering the security and support you need to grow without constantly looking over your shoulder. But not all high-risk processors are created equal. Some excel in customer service, others offer lightning-fast approvals, and some are built specifically for international sales.
To help you cut through the noise, I’ve put together a list of some of the best high-risk merchant account providers out there. Think of this as your starting point for research. Each of these companies brings something unique to the table, whether it’s their industry expertise, flexible terms, or advanced fraud protection tools. As you go through the list, consider what matters most for your business right now. Is it getting approved quickly? Finding a partner who understands your global customer base? Or maybe it’s just having a real person to talk to when you need help. The right fit is out there, and this guide will help you find it.
Borderfree Payments
At Borderfree Payments, we focus exclusively on empowering high-risk businesses that are often underserved by traditional banks. We believe your business deserves a payment solution that’s as resilient and ambitious as you are. That’s why we provide tailored payment infrastructure, complete with advanced fraud prevention tools and multi-currency support to help you scale globally. Our team offers expert guidance on complex regulations, removing the barriers that can hold you back. We’re not just a processor; we’re a partner dedicated to ensuring your payments flow seamlessly so you can focus on growth.
PaymentCloud
PaymentCloud has built a strong reputation for its excellent customer service and flexibility. They are a great option if you need to process a variety of payment types, including standard credit cards, eChecks, and even cryptocurrency. They have deep experience in industries like CBD, firearms, and credit repair, so they understand the unique challenges you face. While they do have a monthly minimum fee to consider, their hands-on support and industry knowledge make them a solid contender for businesses that need a reliable and versatile high-risk merchant account.
Durango Merchant Services
If you’ve struggled with getting approved due to bad credit or a history of chargebacks, Durango Merchant Services is worth a look. They are known for their outstanding customer support and willingness to work with businesses that others might turn away. Operating globally, they also support cryptocurrency transactions, giving you more ways to accept payments from customers around the world. Instead of a one-size-fits-all approach, their pricing is tailored to your specific business needs, which can be a huge advantage for finding a cost-effective solution.
High Risk Pay
For businesses that need to get up and running quickly, High Risk Pay stands out with its impressive approval rates. They report a 99% approval rate for most businesses and 95% for those with bad credit, which offers peace of mind during the application process. In some cases, they can even get accounts approved in as little as 24 hours. This speed, combined with a low monthly fee, makes them an attractive choice for merchants who want to start processing payments without a long, drawn-out setup. Their focus on fast approvals can be a game-changer.
SMB Global
If your business serves an international audience, SMB Global should be on your radar. They specialize in assisting high-risk businesses that operate across borders, offering competitive rates for international payments that can help protect your profit margins. They are also known for working with merchants who have bad credit and provide integrations with popular software solutions to streamline your operations. Their expertise in the global market makes them one of the best high-risk merchant account providers for businesses looking to expand their reach without payment processing headaches.
eMerchantBroker
eMerchantBroker, or EMB, has earned a reputation for saying “yes” when many other processors say “no.” They have extensive experience working with a very wide range of hard-to-place industries, from online gaming and firearms to subscription boxes and travel. If your business falls into a niche that has trouble finding a payment home, EMB likely has a solution. Their high approval rate and specialized underwriting process are designed to find a way to support your business, making them a go-to choice for merchants who need a partner that truly understands their industry’s complexities.
Easy Pay Direct
Easy Pay Direct offers a user-friendly payment system designed for businesses with high sales volume. They are particularly effective for merchants in niches like information products, supplements, CBD, and the adult industry. Their platform is built to handle a large number of transactions smoothly, which is essential for scaling your business. It’s important to note that they do charge a setup fee and monthly fees, so you’ll want to factor that into your budget. For high-volume businesses in their supported industries, the investment can be well worth the stability and reliability they provide.
What to Look For in a High-Risk Provider
Choosing a high-risk payment provider feels like a huge decision—because it is. This isn’t just about finding a company to process transactions; it’s about finding a partner who understands the unique challenges of your industry and is invested in your long-term success. The right provider gives you the stability and tools you need to grow, while the wrong one can leave you with frozen funds, frustrated customers, and a constant headache.
So, what separates the best from the rest? It comes down to a few key areas. You need a partner who is serious about security and can protect you from the fraud that often targets high-risk industries. They should also be able to scale with you, handling high sales volumes without flagging your account. If you have global ambitions, multi-currency support is a must. And perhaps most importantly, they need to offer proactive tools to manage chargebacks and provide expert support when you need it most. Let’s break down exactly what to look for.
Robust Security and Fraud Prevention
Let’s be real: security is non-negotiable, especially in a high-risk industry. You need a provider that offers more than just basic protections. Look for advanced features like PCI DSS compliance, tokenization, and sophisticated fraud-detection systems that use AI to spot suspicious activity. The best providers understand that certain industries naturally face more chargebacks and won’t penalize you for it. Instead, they offer robust fraud protection designed to shield your business from financial losses and reputational damage, giving you the confidence to operate securely.
High-Volume Processing Capabilities
Your business is built for growth, and your payment processor should be, too. A standard processor might get nervous and freeze your account if you have a sudden spike in sales, mistaking success for suspicious activity. High-risk providers, on the other hand, are built for this. They have the infrastructure to handle businesses with fluctuating or consistently high sales volumes. Make sure any provider you consider can support your current transaction volume and has the capacity to grow with you, ensuring your cash flow remains uninterrupted as you scale.
Multi-Currency Support
Want to sell to customers beyond your borders? You’ll need a provider that thinks globally. Multi-currency support is essential for any business looking to expand into international markets. This feature allows you to price your products in local currencies and lets customers pay with the methods they know and trust. By making it easy for international shoppers to buy from you, you can significantly widen your customer base. A provider that helps you accept payments from around the world is a true partner in your growth.
Proactive Chargeback Prevention
Chargebacks are more than just a nuisance; they can threaten your merchant account and your bottom line. While it’s impossible to eliminate them completely, the right provider will give you the tools to keep them to a minimum. Look for a processor that offers more than just reactive dispute management. The best partners provide advanced tools like chargeback alerts and fraud-scoring systems to help you identify and block potentially fraudulent transactions before they ever become a problem. This proactive approach is key to maintaining a healthy payment processing history.
Seamless Integration Options
The best payment technology is the kind you don’t have to think about. Your payment gateway should integrate flawlessly with your existing setup, whether you’re using a popular ecommerce platform like Shopify or a custom-built website. Before committing, confirm that the provider’s payment system is compatible with your shopping cart, CRM, and any other software you rely on. A smooth integration ensures a frictionless checkout experience for your customers and saves you from technical headaches down the road.
Reliable Customer Support
When a payment issue arises, the last thing you want is to be stuck waiting on hold for a generic response. Because the stakes are higher in your industry, you need access to expert support from people who understand your business. Look for a provider that offers dedicated account managers or a specialized support team that is responsive, knowledgeable, and available when you need them. Don’t be afraid to ask about their support structure during the sales process—knowing you can easily get help is priceless.
Breaking Down the Costs and Fees
Let’s talk about money. High-risk merchant accounts have a different fee structure than standard accounts, but it doesn’t have to be a mystery. Understanding the costs involved is the first step to finding a transparent partner who can support your business’s growth. When you know what to expect, you can budget effectively and avoid any surprises down the road. Think of it as creating a financial roadmap for your payment processing.
Setup and Monthly Costs
Most high-risk providers charge a setup fee to get your account running and a recurring monthly fee for maintenance. These costs cover the provider’s initial underwriting process and ongoing support. According to Forbes Advisor, you can expect high-risk merchant accounts to cost between $5 and $45 per month, though this can vary. Some providers might waive the setup fee, while others bundle services into their monthly rate. Always ask for a clear breakdown of these initial and ongoing charges so you can compare different providers accurately.
How Transaction Fees Work
Transaction fees are where the bulk of your processing costs will come from. These are charged as a percentage of each sale you make. For high-risk businesses, these rates are typically higher to offset the increased risk for the processor. You’ll generally see rates ranging from 1.95% to 2.4% of your sales, plus a small flat fee per transaction. It’s crucial to factor these percentages into your pricing strategy to protect your profit margins. A good provider will be upfront about their rates and help you understand how they apply to your specific business.
What Is a Rolling Reserve?
A rolling reserve is a common safety net used by high-risk processors. Essentially, the provider holds a small percentage of your revenue for a set period to cover potential chargebacks or refunds. While this can affect your immediate cash flow, it’s a standard practice that protects both you and the processor. As Stripe explains, this is a key feature of high-risk merchant accounts. Be sure to ask any potential provider about their rolling reserve policy, including the percentage they hold and how long they hold it, so you can plan your finances accordingly.
Key Contract Terms to Check
Your merchant agreement is a legally binding document, so don’t just skim it. Pay close attention to the contract length and any early termination fees (ETFs). Some providers lock you into long-term contracts with steep penalties for leaving early. Look for providers that offer reasonable terms, such as month-to-month agreements or clear, fair cancellation policies. You should also check for any required sales volume minimums. Finding a partner with flexible and transparent contract terms is a sign that they are confident in the service they provide and are invested in a long-term relationship.
Watch Out for These Hidden Fees
Unfortunately, some processors try to pad their profits with unexpected charges. Be on the lookout for hidden fees related to things like chargebacks, PCI compliance, or customer support. As Chargebacks911 warns, some companies may try to take advantage of high-risk businesses with unfair contracts or hidden fees. Before you sign anything, request a complete schedule of all potential fees. Ask direct questions about what isn’t included in your standard rate. A trustworthy provider will have no problem giving you a full, transparent list of every possible charge.
Handle Your Industry’s Unique Challenges
Operating in a high-risk industry means you face a unique set of financial hurdles, from higher chargeback rates to increased scrutiny from payment processors. But these challenges don’t have to hold your business back. With the right knowledge and a solid strategy, you can protect your revenue and keep your operations running smoothly. It all starts with understanding why your business is considered high-risk and then implementing targeted solutions to manage fraud, chargebacks, and compliance. Think of it as building a strong foundation—once it’s in place, you can focus on growth with confidence. Let’s walk through the key areas you need to address to stay ahead of the curve.
Is Your Business Type Considered High-Risk?
So, what exactly lands a business in the “high-risk” category? It’s not a judgment on your business practices but a classification based on potential financial risk. Processors consider a business high-risk if it operates in an industry with a history of high chargeback rates, like online gaming, travel, or subscription services. Other factors include having a high sales volume, accepting payments from multiple countries, or having a less-than-perfect credit history. Even being a new business can place you in this category. Understanding the specific reasons your business is labeled high-risk is the first step toward finding a payment processing account that fits your needs.
Smart Strategies to Prevent Fraud
Fraud is a major concern for any business, but it’s especially critical to manage in high-risk industries. The good news is that you don’t have to fight it alone. A specialized high-risk merchant account provider will offer advanced fraud prevention tools designed for your business model. These systems go beyond basic checks, using sophisticated technology to analyze transaction patterns and flag suspicious activity in real time. This proactive approach helps you stop fraudulent transactions before they turn into costly chargebacks, protecting both your revenue and your reputation with payment networks.
How to Manage Chargebacks Effectively
Chargebacks can feel like an unavoidable cost of doing business, but a smart strategy can significantly reduce their impact. The key is to be proactive. Start by making your billing descriptors clear and your customer service easily accessible to resolve issues before they become disputes. For the chargebacks that still slip through, it’s important to have an efficient management plan. Even with a high-risk account, you can work to lower your chargeback ratio. Some services can even help you fight fraudulent chargebacks, giving you a better chance to recover your funds and keep your account in good standing.
Why You Need Transaction Monitoring
Think of transaction monitoring as your 24/7 security detail. It’s the process of keeping a close eye on all your sales in real time to catch anything that looks out of place. This is essential for high-risk businesses because it allows you to spot and stop potentially fraudulent activity instantly. For example, if a customer suddenly makes multiple large purchases from a new location, a good monitoring system will flag it for review. This immediate detection helps prevent fraud before it leads to a chargeback, saving you time, money, and a lot of headaches down the road.
Get Your Documentation in Order
When you apply for a high-risk merchant account, the provider will want to see that you run a legitimate and stable business. This means you’ll need to have your paperwork ready. Before you start the application process, gather all your essential documents. This typically includes your business licenses, recent financial statements, bank statements from the last few months, and any previous payment processing history you have. Having a detailed business plan on hand is also a great idea. Preparing these documents in advance shows that you’re organized and serious, which can help make the approval process much faster and smoother.
How to Choose the Right Provider for You
Finding the right payment partner is one of the most important decisions you’ll make for your business. It’s not just about accepting payments; it’s about finding a provider who understands your industry and is invested in your growth. A great partner will offer transparent pricing, robust technology, and the support you need to operate smoothly. As you compare your options, think of it as a long-term relationship. Use these key areas to guide your evaluation and find a provider that truly fits your business needs.
Check Their Experience and Reputation
When you’re in a high-risk industry, a generalist payment processor won’t cut it. You need a provider with a deep understanding of your specific field’s challenges, from regulatory hurdles to typical chargeback reasons. Ask potential providers about their experience with businesses like yours. Look for case studies or testimonials from merchants in your industry. A provider who is already an expert in your niche will be better equipped to advocate for your business and keep your account in good standing. Don’t be afraid to ask direct questions about their approval rates for businesses in your category.
Match Their Tech to Your Needs
Your payment processor should simplify your operations, not complicate them. Before committing, make sure their technology integrates seamlessly with the tools you already use to run your business. This includes your ecommerce platform (like Shopify or WooCommerce), accounting software, and any invoicing or subscription management tools. A smooth integration prevents manual data entry errors and gives you a clearer picture of your business’s financial health. Check their API documentation or ask their sales team about specific integrations to ensure their system will fit neatly into your existing workflow.
What to Expect During the Application Process
Applying for a high-risk merchant account is more intensive than a standard one, so be prepared for a thorough underwriting process. The provider will want to see that you’re running a legitimate, stable business. You’ll likely need to provide documents like your business license, recent processing statements, and bank statements. It’s also helpful to understand your own risk factors and be ready to discuss how you manage them. A transparent provider will walk you through their requirements and timeline, so you know exactly what to expect from start to finish.
Evaluate Their Customer Support
When an issue with payments arises, you need help immediately. Test out a provider’s customer support before you sign a contract. Are they easy to reach? Do they offer support through multiple channels like phone, email, and live chat? Pay attention to the quality of the responses you receive. You want a support team that is knowledgeable about high-risk industries and can provide clear, actionable solutions instead of generic replies. Good support can be the difference between a minor hiccup and a major revenue loss, so don’t overlook its importance.
Review the Contract Terms Carefully
The fine print matters, especially with high-risk accounts. Read the entire contract before you sign, and don’t hesitate to ask for clarification on anything you don’t understand. Pay close attention to the fee structure, contract length, early termination fees, and the terms of the rolling reserve. A reputable provider will be transparent about all their terms and conditions. If you encounter vague language or feel pressured to sign quickly, consider it a red flag. This document will govern your financial partnership, so make sure you’re comfortable with every detail.
Do You Need to Accept International Payments?
If you have a global customer base or plan to expand internationally, your payment processor must be able to handle cross-border transactions. Look for a provider that offers multi-currency support, allowing you to sell to customers in their local currency. This not only improves the customer experience but can also increase conversion rates. Also, confirm that they understand international compliance and can help you manage the complexities of different payment methods and regulations around the world. A provider with global expertise is essential for scaling your business beyond your home country.
Verify Their Compliance Standards
Protecting your customers’ data is non-negotiable. Any provider you consider must be fully compliant with the Payment Card Industry Data Security Standard (PCI DSS). This set of security standards ensures that all companies that accept, process, store, or transmit credit card information maintain a secure environment. Ask potential providers for their proof of PCI DSS compliance and inquire about the other security measures they have in place, such as tokenization, encryption, and advanced fraud detection tools. Your provider plays a critical role in your security posture, so choose one that takes it seriously.
Create a Long-Term Payment Strategy
Finding the right high-risk merchant account is a great first step, but building a resilient payment strategy is what will protect your business for years to come. A solid plan helps you anticipate challenges, maintain steady cash flow, and keep your payment processing secure and uninterrupted. It’s about moving from a reactive mindset—dealing with problems as they pop up—to a proactive one where you’re in full control of your financial operations.
Think of your payment strategy as the foundation of your revenue stream. When it’s strong, you can confidently scale your business, expand into new markets, and focus on what you do best: serving your customers. A well-planned approach also makes your business more attractive to processors and financial partners because it shows you’re serious about managing risk and operating responsibly. By focusing on stability, diversification, and continuous monitoring, you can create a payment ecosystem that supports your growth instead of holding it back.
Assess Your Own Business Risk
First things first, it’s important to understand why your business is considered high-risk. It’s not a judgment on your company’s quality but a classification based on specific factors. A high-risk merchant account is designed for businesses that processors see as having a greater chance of chargebacks or fraud. This could be due to your industry (like travel, subscription boxes, or online gaming), your sales model (high-ticket items or international transactions), or even your business’s financial history. Taking an honest look at where your specific risks lie helps you find a provider who is equipped to handle them and allows you to build smarter internal processes.
Steps to Ensure Financial Stability
Once you know your risk factors, you can take steps to build a stable financial future. While high-risk accounts often come with higher fees, you can still find fair terms. If you have a previous processing history with a low chargeback rate, use that as leverage when speaking with potential providers. Be prepared with clear documentation of your sales and dispute resolution processes. This shows that you are a reliable partner. Proactively managing your finances and demonstrating a commitment to reducing chargebacks will go a long way in securing a long-term, stable processing relationship.
Diversify Your Payment Methods
Relying on a single payment processor can be risky. If that account is frozen or terminated, your revenue stream stops instantly. A smarter approach is to diversify. This could mean working with multiple processors or offering a wider range of payment options to your customers. Look for providers that offer specialized tools to manage risk across different payment types. Expanding your payment options can also help you accept payments from customers in more countries, opening up your business to a global market and creating new revenue opportunities.
Monitor and Optimize Your Performance
Your payment strategy isn’t something you can set and forget. It requires ongoing attention to keep it running smoothly. Keep a close eye on your transactions in real-time to spot and stop any unusual activity before it becomes a problem. It’s also crucial to have a clear plan to prevent and handle customer disputes quickly and efficiently. Use the analytics and reporting tools your provider offers to track your chargeback rates, approval ratios, and other key metrics. Regularly reviewing this data will help you identify trends, address potential issues, and continuously refine your strategy for better performance.
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Frequently Asked Questions
Why are the fees for high-risk accounts more expensive? The higher fees are directly tied to the increased financial risk the payment processor takes on. Because high-risk industries often see more chargebacks and potential fraud, the processor needs to build in a buffer to cover those potential losses. Think of it as a form of insurance for the provider. These fees also cover the costs of more advanced security monitoring, specialized customer support, and the intensive underwriting required to manage your account safely.
Will being labeled “high-risk” hurt my business’s reputation? Not at all. This is a common worry, but the “high-risk” label is an internal classification used by financial institutions. It’s based on industry statistics and business models, not on your company’s integrity or quality. Your customers will never see this label, and it has no impact on your public reputation or your business credit score. Many successful, legitimate companies operate with high-risk accounts simply because of the industry they’re in.
What’s the first thing I should do if my current payment processor shuts down my account? First, don’t panic. While it’s incredibly stressful, it’s a solvable problem. Your immediate priority is to find a specialized high-risk provider who understands your industry. Gather all your business documents, including recent processing statements and bank statements, so you’re ready to apply quickly. Being prepared with this information will help expedite the approval process and get your revenue flowing again as soon as possible.
How long does it typically take to get approved for a high-risk merchant account? The timeline can vary quite a bit depending on the provider and the complexity of your business. While some processors can offer approvals in as little as 24 to 48 hours, a more typical timeframe is anywhere from a few days to two weeks. The underwriting process is more thorough than for a standard account, so having all your documentation organized and ready to go can significantly speed things up.
Is it possible to eventually move from a high-risk account to a standard one? Yes, it’s definitely possible for some businesses. If you can maintain a consistent processing history with a very low chargeback rate for a couple of years, you may be able to qualify for a standard account later on. This is most common for businesses that were initially considered high-risk because they were new or had a limited financial history. However, if your business is in an industry that is permanently classified as high-risk, you will likely always need a specialized provider.
