Top 4 Payment Processors for Hard-to-Place Merchants

Your business is built for growth, but is your payment processing infrastructure? Using a standard processor when you operate in a high-risk space is like trying to build a skyscraper on a weak foundation. It might work for a while, but it won’t support your ambitions. As you scale, handle larger transaction volumes, or expand to international markets, you need a system designed for that complexity. A specialized payment processor for hard to place merchants provides the robust, scalable solutions necessary to grow without limits. In this article, we’ll explore the essential features that support long-term growth and how to choose a partner who is ready to scale with you.

Key Takeaways

Understand Why You’re “Hard to Place”: The “high-risk” label isn’t a reflection of your business’s quality; it’s a business model mismatch with traditional processors. Knowing this helps you focus your search on specialized providers who are actually built to support your industry.
Seek a True Partner, Not Just a Processor: The right provider offers more than just transaction processing. Prioritize specialists with deep experience in your industry, dedicated support, and robust tools to help you manage chargebacks and prevent fraud effectively.
Control Your Narrative During Application: You can significantly improve your approval odds by being prepared and transparent. Present organized financial documents, demonstrate a clear plan for mitigating chargebacks, and be upfront about your business model to build trust from the start.

Why Is Your Business Considered “Hard to Place”?

If you’ve ever had a payment processor reject your application or suddenly terminate your account, you know how frustrating it can be. The term “hard to place” or “high-risk” isn’t a judgment on your business’s quality or legitimacy. It’s a label that traditional banks and payment processors use to categorize businesses they see as having a greater potential for financial risk. This classification usually comes down to a few key factors that have more to do with their internal policies than your business practices. Understanding why you’re being flagged is the first step toward finding a payment partner who actually gets it.

Your Industry Raises a Red Flag

Sometimes, the industry you operate in is enough to get you labeled high-risk. It’s not personal; it’s just how traditional banks view sectors with a history of high chargeback rates, complex regulations, or reputational concerns. If your business is in one of these common high-risk industries—like CBD, supplements, subscription boxes, credit repair, or online coaching—standard processors often won’t even consider your application. They prefer to stick with predictable, low-risk sectors, leaving many legitimate entrepreneurs without a way to accept payments.

Your Business Model Seems Risky to Them

How you sell can be just as important as what you sell. Traditional processors often get nervous about business models that involve high average ticket prices, recurring billing, or international transactions. Subscription services, for example, have a longer customer lifecycle and more opportunities for disputes down the road. Selling to a global customer base introduces complexities like currency conversion and cross-border fraud, which many standard providers aren’t equipped to handle, increasing their perceived financial risk.

You Have a High Chargeback Ratio

A chargeback is what happens when a customer disputes a transaction with their bank, forcing a refund. For payment processors, chargebacks are a major liability. They lead to costly fees and can damage their standing with card networks like Visa and Mastercard. If your business has a history of customer disputes—even if they weren’t your fault—you’ll likely be classified as high-risk. A high chargeback ratio is one of the fastest ways to get your account shut down by a traditional processor that isn’t prepared to manage that risk.

Your Credit History Is a Factor

Finally, both your personal and business credit history come into play during the underwriting process. From a processor’s perspective, a low credit score suggests potential financial instability, making you a riskier partner. If you’re a new business without much credit history, you can also be flagged. While it can feel unfair, traditional financial institutions rely heavily on these metrics to make quick decisions. This often creates a major roadblock for new entrepreneurs or those who have hit a temporary rough patch in the past.

Why Traditional Processors Often Say “No”

It can be incredibly frustrating to have your payment processing application denied, especially when your business is growing. When a traditional processor like Stripe or PayPal says “no,” it’s usually not a judgment on your business’s quality or potential. Instead, it comes down to their risk tolerance. Mainstream processors build their business models around serving a high volume of low-risk merchants, and anything that falls outside that narrow scope is often rejected to avoid potential complications.

One of the biggest red flags for a standard processor is the potential for chargebacks. A chargeback happens when a customer disputes a charge with their bank and gets their money back. While every business deals with them occasionally, some industries naturally have higher rates of disputes. If your business operates in a field known for frequent chargebacks, a traditional processor will likely see you as a financial liability they aren’t equipped to handle. They simply don’t have the infrastructure or appetite for that level of risk.

Beyond chargebacks, your entire industry might be on a processor’s “restricted” list. Businesses in sectors like CBD, online gaming, subscription boxes, or adult products are often classified as high-risk from the start. This is due to complex legal regulations, reputational concerns for the processor’s brand, or fluctuating market conditions. Traditional payment companies prefer to avoid the specialized legal and compliance work required to serve these industries, opting for the simplicity of mainstream retail and services.

Ultimately, a rejection from a traditional processor is about a business model mismatch. Their systems are automated for quick approvals and standardized accounts, not for the detailed underwriting and ongoing monitoring that a “hard-to-place” merchant requires. They may also be unwilling to handle the more complex application process or higher fees associated with high-risk accounts. This is precisely why specialized processors exist—to provide the tailored support, risk management, and payment infrastructure that businesses like yours need to thrive.

Top Payment Processors for Hard-to-Place Merchants

Finding a payment processor when you’re labeled “hard to place” can feel like a huge hurdle, but it’s far from impossible. The key is to work with a provider that specializes in your industry and understands its unique risks and challenges. While standard processors might shy away, specialized providers have built their businesses around supporting merchants just like you. They offer the infrastructure, security, and expertise needed to keep your payments flowing smoothly.

The right partner won’t just approve your account; they’ll provide tailored solutions that fit your business model. This means fair rates, flexible terms, and robust fraud prevention tools designed for high-risk environments. Instead of seeing your business as a liability, they see it as an opportunity to provide a much-needed service. We’ve rounded up four of the best payment processors that excel at serving hard-to-place merchants, each with its own strengths.

Borderfree Payments: Specialized Solutions for High-Risk Industries

Borderfree Payments is a standout choice for businesses that need more than just a one-size-fits-all solution. They focus entirely on high-risk industries, offering tailored payment gateways and processing services designed to meet specific compliance and security needs. What makes them different is their hands-on, expert support. They act as a true partner, helping you manage risk and ensure your payment setup is secure and reliable. For hard-to-place merchants tired of being misunderstood by traditional processors, this level of specialized attention can make all the difference in achieving stable, long-term growth.

PaymentCloud: Flexibility for MATCH List Merchants

If your business has landed on the MATCH list, you know how difficult it can be to get approved for a merchant account. PaymentCloud is known for its high approval rates and willingness to work with businesses in this exact situation. They offer a great deal of flexibility, providing custom fee structures and the ability to work with any payment gateway. Their team provides hands-on assistance throughout the setup process, making it a smoother experience for merchants who have faced rejection elsewhere. This makes them a go-to option if you need a high-risk merchant account but are struggling to find a provider who will work with you.

Durango Merchant Services: Niche Market Expertise

With over two decades of experience, Durango Merchant Services has carved out a reputation for serving some of the most hard-to-place industries, including auction houses, adult content, and payday loan services. Their deep expertise in these niche markets means they understand the specific operational and regulatory challenges you face. Durango provides each client with a dedicated account manager, ensuring you always have a point of contact who knows your business. They also support multiple currencies, making them a solid choice for merchants with an international customer base.

High Risk Pay: Credit-Challenged Business Support

For many new or struggling businesses, a poor credit history can be a major roadblock to securing payment processing. High Risk Pay specializes in supporting these credit-challenged merchants. They boast an impressive 95% approval rate for businesses with bad credit and offer fast approvals, often within 24 to 48 hours. Their low monthly fees and straightforward approach make them an attractive option for entrepreneurs who need a reliable processor without getting bogged down by a complicated application process. If your credit score is a concern, High Risk Pay is one of the most accessible service providers available.

The True Cost of High-Risk Payment Processing

When you’re running a high-risk business, payment processing fees are going to look a little different. Processors take on more liability when they partner with you, and their pricing reflects that. But that doesn’t mean you should be in the dark about what you’re paying. Understanding the complete cost structure is the first step to protecting your revenue and ensuring there are no surprises on your monthly statement.

A transparent partner will walk you through every line item, but it helps to know what to look for from the start. The costs generally fall into three main categories: standard fees for service, cash reserves held to cover potential losses, and the less-obvious fees that can sometimes get buried in the fine print. Let’s break down what you can expect to see so you can accurately forecast your expenses and choose a processor who has your back.

Transaction Fees and Monthly Charges

First up are the most straightforward costs: transaction and monthly fees. These are the standard charges for using a processor’s service. For high-risk accounts, you can generally expect monthly fees to be between $5 and $45. Transaction fees, which are charged as a percentage of each sale, typically run from 1.95% to 2.4%. While these rates are higher than what a low-risk business might pay, they compensate the processor for the increased financial risk they assume. When comparing providers, look for a clear and simple fee structure. Your goal is to find competitive rates without sacrificing service or security.

Reserve Requirements and Rolling Reserves

Next, let’s talk about reserves. A payment processor might require you to maintain a reserve to cover potential chargebacks or refunds. One common type is a rolling reserve, where the processor withholds a small percentage of your revenue—often around 10%—for a set period, usually about six months. After that period, the funds are released back to you on a rolling basis. Think of it as a security deposit for the processor. While it can impact your short-term cash flow, it’s a standard practice in high-risk industries. A good processor will be upfront about their reserve requirements, including the percentage and holding period, so you can plan your finances accordingly.

Hidden Costs to Watch For

This is where a trustworthy partner really shines. Some processors have a reputation for tacking on unexpected fees that can quickly eat into your profits. These might include high chargeback fees, statement fees, or other administrative charges that weren’t clearly disclosed upfront. Be sure to ask for a full fee schedule and review your contract carefully. Pay close attention to the costs associated with chargebacks, as these can add up. The best high-risk processors offer transparent pricing and provide tools to help you manage and fight chargebacks, which helps you keep more of your hard-earned money.

Must-Have Features in a High-Risk Processor

When you’re running a high-risk business, choosing a payment processor isn’t just about finding the lowest rates. It’s about finding a true partner who understands your industry and provides the stability you need to grow. The right processor equips you with a specific set of tools designed to protect your revenue, manage risk, and keep your operations running smoothly. Without these key features, you could face unexpected account holds, crippling fees, or even sudden termination, which can stop your business in its tracks.

Think of it this way: a standard processor offers a one-size-fits-all solution, which rarely fits a business with unique needs. A specialized high-risk processor, on the other hand, provides a tailored toolkit. They anticipate the challenges you’ll face and give you the resources to handle them proactively. From robust fraud protection to expert support, these features are non-negotiable. They are the foundation of a secure and scalable payment infrastructure, allowing you to focus on your business instead of worrying about your payment processing. Looking for these specific capabilities will help you weed out the providers who can’t truly support your business model for the long haul.

Low Chargeback Fees and Flexible Reserves

Chargebacks are an unavoidable part of doing business, but for high-risk merchants, they can quickly become a major drain on profits. That’s why it’s crucial to find a processor with a transparent and fair fee structure for chargebacks. Beyond just low fees, look for a partner that provides automated tools to help you manage and dispute chargebacks effectively. A good processor should help you fight illegitimate claims, not just penalize you for them.

Many high-risk accounts also require a rolling reserve, where the processor holds a small percentage of your sales for a set period to cover potential chargebacks. While this is standard practice, the terms can vary wildly. A flexible processor will work with you to set reasonable reserve requirements that don’t strangle your cash flow.

Industry Specialization and Dedicated Support

Working with a processor that specializes in your industry is a game-changer. These providers understand the specific challenges and regulatory landscape of your niche, which dramatically reduces the risk of a sudden account freeze or closure. They’ve seen it all before and have built their systems to support businesses just like yours. This insider knowledge means a smoother application process and a more stable, long-term partnership.

Equally important is the level of support you receive. Instead of being routed to a generic call center, look for processors that offer a dedicated account manager. Having a single point of contact who understands your business history and goals is invaluable. This person can help you understand the complexities of high-risk processing and advocate for you when issues arise.

Multi-Currency and Global Processing

If your business serves customers around the world, your payment processor must be able to keep up. Accepting international payments is more than just converting currency; it’s about providing a seamless checkout experience for your global customers while keeping cross-border fees in check. A processor with strong multi-currency capabilities allows you to price your products in local currencies and settle transactions without losing a significant chunk to conversion rates.

Look for a provider experienced in global payment processing. They can help you manage offshore accounts and ensure you’re compliant with international payment regulations. This feature not only expands your potential market but also builds trust with international buyers who prefer to pay in their native currency.

Advanced Fraud Prevention Tools

High-risk industries are often prime targets for fraudulent activity, making robust security measures an absolute must. Your processor should offer more than just basic protections; they need a sophisticated suite of fraud prevention tools designed to stop bad actors before a transaction is even completed. This includes features like real-time transaction monitoring, customizable risk filters, and AI-powered threat detection.

These tools are your first line of defense against chargebacks and financial losses. For businesses that have been placed on the MATCH list, strong fraud prevention is even more critical. A proactive approach to security not only protects your bottom line but also helps maintain the health and longevity of your merchant account.

How to Pick the Right High-Risk Payment Processor

Choosing a payment processor is a critical decision for any business, but when you operate in a high-risk industry, the stakes are significantly higher. The right partner won’t just handle your transactions; they’ll provide the stability and specialized support you need to grow without the constant threat of a frozen account or sudden termination. The wrong one can create operational nightmares, drain your resources with hidden fees, and stunt your growth before you even get started.

So, how do you sort through the options and find a processor that truly understands your business? It’s less about finding the cheapest rate and more about finding the best long-term fit. You need a partner who is equipped to handle the unique challenges and regulatory complexities of your industry. This means moving beyond surface-level comparisons and digging into the details of what they offer. By carefully evaluating their industry experience, scrutinizing their fee structures and contract terms, and assessing their technical capabilities and support, you can confidently select a processor that will act as a true ally for your business. Let’s break down exactly what to look for in each of these areas.

Evaluate Their Industry Experience

Not all high-risk processors are created equal. A provider that specializes in e-commerce might not understand the nuances of the travel industry, and vice versa. That’s why industry-specific experience is non-negotiable. A processor that knows your field understands your typical transaction patterns, chargeback risks, and regulatory requirements. This expertise translates into a smoother application process, better risk management, and fewer false declines. It’s essential to choose a provider that knows a lot about your specific high-risk industry. Ask potential processors about their experience with businesses like yours and for case studies or references to confirm their expertise.

Compare Fee Structures and Contract Terms

High-risk processing comes with higher fees, but that shouldn’t mean confusing or unpredictable pricing. Your goal is to find a partner who is upfront about all potential costs. Look for transparent pricing models that clearly outline transaction rates, monthly fees, chargeback fees, and any reserve requirements. The best companies are the ones with clear-cut pricing. Don’t be afraid to ask for a complete fee schedule. Also, pay close attention to the contract terms. Are you locked into a multi-year agreement? What are the penalties for early termination? A reputable processor will be flexible and clear about their terms from the start.

Assess Integration and Tech Support

Your payment processor needs to fit seamlessly into your existing operations. Before you commit, check if the provider works well with the other business tools you rely on, like your e-commerce platform, CRM, or accounting software. A smooth integration saves you time and prevents technical headaches down the road. Equally important is the level of support you’ll receive. When an issue arises, you need fast, effective help. Look for providers that offer a lot of help, especially a dedicated account manager who can guide you from application to onboarding and beyond. This personalized support is invaluable in the high-risk space.

Common Challenges for Hard-to-Place Merchants

Getting a merchant account should be simple, but when your business is considered “hard to place,” the path can feel a lot more complicated. It’s not just you—these hurdles are common for any business operating in a high-risk industry. Traditional payment processors are built for low-risk, predictable models, so they often get nervous when they see higher chargeback rates or complex regulations. This caution translates into a more rigorous approval process.

Understanding these challenges upfront helps you prepare, find the right partner, and get your account approved without unnecessary headaches. Think of it less as a series of roadblocks and more as a checklist to work through. Let’s walk through what you can expect.

Longer Application and Underwriting Times

Patience is key when you’re applying for a high-risk merchant account. Unlike standard applications that can get approved in a day, the underwriting process for hard-to-place businesses is much more thorough. Processors take extra time to scrutinize every detail because they’re taking on more risk. They need to fully understand your business model, sales history, and potential for chargebacks before they can commit. So, if you don’t hear back immediately, don’t panic. This extended timeline is a normal part of the due diligence process for specialized accounts.

Ongoing Account Monitoring

Approval isn’t the final step; it’s the beginning of an ongoing partnership. High-risk processors will continue to monitor your account activity closely to protect against fraud and excessive chargebacks. One common practice is holding a portion of your funds in a reserve. This might be a rolling reserve, where a small percentage of each transaction is held for a set period before being released to you. This acts as a safety net for the processor. While it can impact your immediate cash flow, it’s a standard tool used to manage the financial risks associated with your industry.

How to Improve Your Approval Odds

Getting approved for a high-risk merchant account can feel like a huge hurdle, but it’s far from impossible. The key is to approach the application process with preparation and a clear strategy. Processors aren’t looking for reasons to say no; they’re looking for reasons to say yes to a stable, long-term partnership. By presenting your business as a reliable and well-managed operation, you significantly increase your chances of getting the green light.

Think of it as making your case. You need to show that you understand the risks associated with your industry and have solid plans in place to manage them. This comes down to three core areas: being upfront with your financials, actively controlling your chargebacks, and choosing a processor that genuinely understands your business model. Focusing on these steps will not only help you secure an account but also set you up for a healthier and more successful processing relationship from the start.

Prepare Your Financials and Be Transparent

When you apply for a high-risk merchant account, honesty is your best policy. Processors specializing in this area expect to see some complexities; what they don’t want are surprises. Before you even start an application, gather all your essential documents, including several months of bank statements, previous processing statements (if you have them), and your business formation papers. Having everything organized shows you’re a serious and professional operator.

During the application, be completely open about your business model, your marketing methods, and your sales volume. Hiding information or downplaying potential risks will only raise red flags during underwriting. A processor who has a full, clear picture of your operations can build a solution that truly fits your needs. This transparency is the foundation of a trusting and lasting payment processing partnership.

Manage Chargebacks and Mitigate Risk

Your chargeback ratio is one of the most critical metrics underwriters will examine. A high number of chargebacks signals risk, so showing that you have this under control is essential. Start by digging into the root causes of your current chargebacks. Are customers receiving something different from what they expected? Are your shipping times too long? Pinpoint the issues and fix them—whether that means rewriting product descriptions, improving customer service, or streamlining your fulfillment process.

Proactively managing this part of your business demonstrates that you’re a low-risk partner. When vetting processors, ask about their chargeback management tools. Many high-risk specialists offer systems that can help you fight illegitimate chargebacks and prevent future ones, which is a feature that can save you a significant amount of money and stress down the line.

Build Strong Banking Relationships

Not all payment processors are created equal, especially when it comes to high-risk industries. Instead of applying to generic, low-risk-focused providers, concentrate your efforts on those who specialize in your field. A processor with deep experience in your industry already understands the specific challenges you face and has tailored their risk models accordingly. This means you’re far less likely to face a sudden account termination down the road.

When you speak with a potential provider, treat it like an interview where you’re both evaluating each other. Ask about their experience with businesses like yours, their fee structures, and the level of support they offer. Choosing a high-risk merchant account provider is about finding a true partner who is invested in your growth, not just a company that will process your transactions.

High-Risk Processing Myths, Busted

The world of high-risk payment processing is filled with misconceptions that can stop you from finding the right partner. It’s easy to feel stuck when you’re constantly hearing that your options are limited, expensive, or just too complicated to deal with. But believing these myths can keep your business from getting the stable, secure payment solutions it needs to grow.

Let’s clear the air and tackle some of the most common myths head-on. Understanding the truth can help you make smarter decisions and find a processor that truly supports your business goals, rather than holding you back. We’ll look at why not all processors are created equal, why being labeled “high-risk” doesn’t mean you’re out of options, and why making a change might be easier than you think.

Myth: All High-Risk Processors Are the Same

This is one of the most dangerous assumptions you can make. On the surface, it seems like all processors do the same thing: move money from your customer to you. But how they do it varies dramatically, especially in the high-risk space. Some processors, known as aggregators, lump your business into a large, shared account with thousands of others. If another business in that pool has a spike in chargebacks, the entire account can be frozen or shut down, taking your processing capabilities with it.

A dedicated high-risk processor, on the other hand, provides individual merchant accounts for each client. This gives you a unique merchant ID (MID) that separates your business from everyone else, offering far more stability and security. It’s an account tailored specifically to your business’s risk profile, which is exactly what you need.

Myth: High-Risk Means You Have No Options

After being turned away by a few traditional banks or mainstream processors like Stripe and PayPal, it’s easy to feel like you’ve hit a dead end. But that’s simply not the case. The truth is, a whole segment of the payments industry is built specifically to serve businesses like yours. These specialized providers understand the nuances of high-risk industries, from subscription models and nutraceuticals to online gaming and travel.

While mainstream options might not work, high-risk businesses have many options for payment processing with companies that have the right infrastructure and risk tolerance. The key is to stop looking in the wrong places and start searching for a partner who specializes in your industry and is equipped to handle your specific needs.

Myth: Switching Processors Is Too Complicated

The thought of migrating your payment systems can be daunting. You worry about downtime, technical headaches, and getting locked into another long, confusing contract. This fear keeps many businesses stuck with processors that have high fees, poor support, or unstable service. However, the idea that switching is always a nightmare is another myth.

A reputable high-risk processor knows that a smooth transition is part of good service. The best companies offer clear, transparent pricing and dedicated support to help with transitions, ensuring minimal disruption to your operations. While it does take some initial effort, the long-term benefits of lower fees, better stability, and a true partnership are well worth it. Don’t let the fear of a difficult switch keep you in a bad situation.

Frequently Asked Questions

If a big processor like Stripe rejected me, does that mean no one will approve my business? Not at all. A rejection from a mainstream processor is more about their business model than yours. They are built for high-volume, low-risk accounts and simply aren’t equipped to handle the complexities of certain industries. Think of it as a mismatch, not a final verdict. The key is to shift your search to specialized providers who have built their entire business around supporting merchants just like you.

Is being labeled “high-risk” a permanent black mark on my business? No, it’s not a judgment on your business’s quality or a permanent stain on your record. It’s a classification based on industry type, business model, or financial history. While the label might stick as long as you operate in that industry, you can build a strong processing history by managing chargebacks effectively and maintaining a stable financial record. A good track record with a high-risk specialist can open up more favorable terms over time.

Are the higher fees for high-risk processing actually worth it? While no one loves paying higher fees, in this case, you’re paying for stability and peace of mind. A specialized processor provides essential services that standard providers don’t, like advanced fraud prevention, dedicated support, and help managing chargebacks. These features protect your revenue and prevent sudden account freezes or closures, which are far more costly than slightly higher transaction rates.

What’s the most common mistake merchants make when applying for a high-risk account? The biggest mistake is not being completely transparent. Some business owners try to downplay the risky aspects of their business or hide details about their sales volume, hoping it will make them look more appealing. Underwriters for high-risk accounts are trained to spot inconsistencies, and a lack of honesty is the fastest way to get denied. It’s always better to be upfront and provide a full, clear picture of your operations from the start.

Will I ever get the money from my rolling reserve back? Yes, you will. A rolling reserve isn’t a fee; it’s more like a temporary security deposit for the processor. They hold a small percentage of your revenue for a set period, typically around six months, to cover any potential chargebacks. Once that holding period for a given transaction passes, the funds are released back to you on a “rolling” basis. A trustworthy processor will be very clear about the percentage and the holding period in your contract.

4 Best Payment Processors for Hard-to-Place Merchants