Payment Solutions for Hard to Place Businesses: A Guide

Let’s get one thing straight: being labeled a “high-risk” or “hard-to-place” business is not a judgment on your character or your company’s legitimacy. It’s a technical classification used by banks and processors whose systems are designed for a very narrow type of low-risk, low-volume retail. If your business operates outside that box—perhaps with high-ticket items, international customers, or in a regulated industry—their model simply can’t support you. It’s not your fault. You’re just trying to fit a square peg into a round hole. The key is to stop trying and instead find a partner built for your shape. This article will help you understand why you’re getting flagged and how to find dedicated payment solutions for hard to place businesses that see you as an opportunity, not a liability.

Key Takeaways

Know Your Risk Profile to Find the Right Partner: Being labeled “high-risk” is about how processors see your industry or sales model, not your business’s worth. Understanding the specific factors—like high chargeback potential or complex regulations—helps you skip the frustration of standard providers and go straight to a specialist equipped to support you.
Look Beyond Rates for True Account Stability: The cheapest processor isn’t the best if they freeze your account after a sales spike. Prioritize partners who offer robust fraud prevention and chargeback management, as these features are what truly protect your cash flow and keep your business running without interruption.
Manage Your Account Proactively to Ensure Longevity: Getting approved is just the first step; maintaining a healthy account requires ongoing effort. Keep your processor informed about big promotions or business changes, regularly review your transaction data, and actively use their security tools. This transparency builds trust and prevents surprises that could disrupt your revenue.

What Makes a Business “Hard-to-Place”?

If you’ve ever been turned down for a payment processor or hit with surprise account holds, you’ve likely heard the term “high-risk” or “hard-to-place.” It’s a frustrating label, but it’s not a judgment on your business’s quality or legitimacy. In the world of payment processing, this term is all about perceived financial risk from the perspective of the bank or processor. Traditional payment providers build their business models on stability, so they prefer to work with merchants that have predictable sales volumes, low average transaction amounts, and nearly zero chargebacks.

When a business operates outside of these neat and tidy parameters, it gets flagged. This could be because of the industry you’re in, the way you bill your customers, or your transaction history. For standard processors, anything that introduces unpredictability is a red flag, often leading them to deny your application or shut down your account with little warning. But this doesn’t mean you’ve hit a dead end. It simply means your business requires a specialized payment partner who understands your industry’s complexities and has the infrastructure to support you. It’s about finding the right fit, not changing your business to please a one-size-fits-all provider.

Industries Often Labeled High-Risk

Certain industries are almost automatically categorized as high-risk because of their business models or the regulatory environments they operate in. If your business is in sectors like CBD and THC sales, subscription services, travel, online gaming, firearms, or adult products, you’re likely considered hard-to-place. This isn’t because these businesses are inherently problematic; it’s because they carry factors that make traditional processors nervous. For example, subscription services can have higher chargeback rates when customers forget to cancel. Industries like CBD face a shifting legal landscape, which adds a layer of compliance risk that standard providers aren’t equipped to handle.

Key Factors That Affect Payment Processing

It’s not always about what you sell, but how you sell it. Several operational factors can land you in the high-risk category, even if your industry seems straightforward. A high volume of chargebacks is one of the biggest red flags, as it suggests potential customer dissatisfaction or fraud. Other factors include selling high-ticket items, which increases the financial loss from a single dispute, or having unpredictable sales patterns with sharp spikes and lulls. Even being a new business with no processing history or having a poor personal credit score can make it difficult to secure a standard merchant account, as processors have no data to assess your reliability.

What Are Merchant Categories?

Behind the scenes of every credit card transaction is a four-digit number called a Merchant Category Code (MCC). This code is assigned to your business based on the products or services you provide, and it tells card networks like Visa and Mastercard what you do. A bookstore has a different code than a travel agency, for instance. The problem is, certain MCCs are automatically flagged by acquiring banks as high-risk. This happens systemically, often before a human even reviews your application. Knowing that your business falls into one of these “specialty” or hard-to-place merchant categories from the start helps you bypass the frustration of applying with standard processors and go straight to a provider who is built to say “yes.”

The Biggest Payment Processing Challenges You’ll Face

Running a business in a high-risk industry means you’re already used to clearing extra hurdles. When it comes to payment processing, those hurdles can feel even higher. Standard payment providers often aren’t equipped to handle the unique complexities of your business, which can lead to some significant and frustrating challenges. From finding a provider who will even work with you to managing the constant threat of account holds, the path can be rocky. Understanding these obstacles is the first step toward finding a solution that provides the stability and support you need to grow without interruption. Let’s walk through the most common issues you’ll likely encounter.

Fewer Provider Options and Higher Fees

When you’re labeled “high-risk,” your options for payment processing shrink dramatically. Mainstream providers like Square or PayPal often have strict policies that exclude entire industries, and even if you get approved, you risk sudden account termination. This leaves you with a smaller pool of specialized high-risk merchant account providers. Because these processors take on greater financial risk, they charge higher fees to offset potential losses from chargebacks and fraud. You can expect to see higher transaction rates, monthly fees, and sometimes a rolling reserve, where the processor holds a percentage of your revenue for a set period to cover any disputes. It’s the cost of doing business in a specialized market.

Dealing with Account Holds and Instability

Few things are more stressful for a business owner than waking up to a frozen bank account. For hard-to-place businesses, this is an all-too-common reality. Because your business might have a higher volume of online sales, a new credit history, or sell products with specific regulations, traditional processors see you as unpredictable. A sudden spike in sales or a few customer disputes can trigger an automated security flag, leading to an account hold or termination with little warning. This instability disrupts your cash flow and can halt your operations entirely. Finding a processor who understands your sales patterns and industry is critical for maintaining the financial stability you need to operate smoothly.

Meeting Compliance and Documentation Demands

Getting approved for a high-risk merchant account is not a simple sign-up process. The underwriting is far more intensive because the processor needs to verify that your business is legitimate and compliant. You’ll be asked to provide a mountain of paperwork, including detailed financial statements, supplier agreements, business licenses, and proof of your compliance with all relevant industry regulations. Processors look closely at your chargeback history and credit score to assess their risk. While it can feel invasive, this thorough vetting process is designed to protect both you and the processor from fraud and legal issues down the line. Having all your documents organized and ready will make the application process much smoother.

How to Handle Chargebacks

Chargebacks are a headache for any business, but for a high-risk merchant, they can be a death sentence for your processing account. A chargeback happens when a customer disputes a charge with their bank, which then reverses the transaction. Processors monitor your chargeback ratio—the percentage of your transactions that result in a chargeback—very closely. If that ratio exceeds their threshold (typically around 1%), your account could be terminated. Because of this, it’s essential to have a proactive strategy for preventing chargebacks in the first place. This includes clear communication with customers, excellent service, and using fraud prevention tools. A good high-risk processor will also offer support to help you fight illegitimate disputes.

Finding the Right Payment Solution for Your Business

Finding a payment processor who understands your industry can feel like searching for a needle in a haystack. Many traditional providers will turn you away simply because you operate in a “hard-to-place” niche. But the right partner isn’t just willing to work with you—they have the specific infrastructure and expertise to help you thrive. The key is to look for specialized providers who see your business as an opportunity, not a liability. Let’s walk through some top contenders and what you should look for.

Borderfree Payments

At Borderfree Payments, we specialize in supporting the very businesses that are often underserved by mainstream processors. We say “yes” when others say “no” because we’ve built our systems to handle the unique needs of industries like CBD, telemedicine, online pharmacies, gaming, and online dating. Our platform allows you to accept all the ways your customers want to pay—from credit cards and checks to digital wallets. We provide the secure and reliable payment backbone you need to operate confidently, knowing your revenue is protected and your account is stable.

Other Specialized Processors to Consider

Doing your research is always a smart move, and there are other strong players in the high-risk space. PaymentCloud is known for its personalized service and ability to help businesses on the MATCH list. For extremely hard-to-place industries like auction houses or adult content, Durango Merchant Services is a go-to option. If you’re concerned about credit history, High Risk Pay boasts an impressive approval rate and can get you up and running quickly. Exploring the best high-risk merchant accounts helps you compare features and find the perfect match for your specific situation.

Solutions Tailored to Your Industry

Why are some businesses labeled “hard-to-place” in the first place? It often comes down to factors like a high volume of online sales (which can increase fraud risk), a new credit history, or operating in a field with complex regulations. The right processor provides hard-to-place merchant services that address these challenges head-on. This includes offering flexible payment acceptance methods that fit how you do business, whether you need a Virtual Terminal for mail or phone orders, a mobile solution for on-the-go payments, or a traditional countertop POS system.

How to Decode Fee Structures

Let’s be direct: high-risk merchant accounts typically come with higher fees. This isn’t to penalize you; it’s to cover the provider’s increased risk in managing your transactions. But don’t let that discourage you. The goal is to find a provider whose fee structure is transparent and justifiable. Look beyond the discount rate and ask about setup fees, monthly minimums, and chargeback fees. The right partner balances fair pricing with robust risk management tools and dedicated support, ensuring your account remains stable and secure for the long haul.

Must-Have Features in a Payment Processor

When you’re running a business in a high-risk industry, choosing a payment processor isn’t just about finding the lowest rates. You need a partner who understands your challenges and provides the right tools to keep your business secure and growing. The wrong choice can lead to frozen funds, a closed account, and a major headache. To avoid that, focus on processors that offer a specific set of features designed to protect your operations and support your long-term success. Let’s walk through the absolute must-haves you should look for.

Fraud Prevention and Security Tools

High-risk industries are often prime targets for fraudulent activity, making robust security non-negotiable. A solid payment processor will offer a suite of tools designed to stop fraud before it happens. Look for essentials like Address Verification Service (AVS) and CVV checks, but also ask about more advanced solutions. Many specialized processors use AI-powered systems that analyze transaction patterns to flag suspicious behavior in real time. These tools are your first line of defense against chargebacks and revenue loss. Investing in a processor with strong fraud protection isn’t just about security; it’s about protecting your bottom line and maintaining a healthy merchant account.

Multi-Currency and Global Support

If your business serves customers around the world, you need a processor that can handle international payments without a hitch. Multi-currency support allows you to accept payments in your customers’ local currencies and display prices they can easily understand. This simple feature can dramatically improve your conversion rates by creating a seamless and familiar checkout experience. A processor that offers dynamic currency conversion simplifies your accounting and protects you from the complexities of fluctuating exchange rates. It’s a key feature for any business looking to build a global brand and tap into new markets. Don’t let currency barriers limit your reach.

Smooth Payment Gateway Integration

Your payment processor should work flawlessly with your existing website and shopping cart. A clunky or complicated integration process can lead to technical glitches, a poor customer experience, and abandoned carts. The best processors offer a payment gateway that is easy to integrate, whether through a simple plugin for platforms like Shopify or a well-documented API for custom builds. Before you commit, ask about their integration process and what level of technical support they provide. A smooth setup ensures you can start accepting payments quickly and reliably, without disrupting your business operations or frustrating your development team.

Systems to Protect Against Chargebacks

Chargebacks are one of the biggest threats to any high-risk business. A high chargeback ratio can quickly land you in hot water, leading to hefty fines or even account termination. Your payment processor should be your partner in the fight against chargebacks. Look for features like real-time transaction monitoring and alerts that help you identify potentially problematic orders. A great processor will also provide support for chargeback disputes, helping you gather the necessary evidence to fight illegitimate claims. Proactive chargeback management tools are essential for keeping your ratio low and your merchant account in good standing.

Features That Ensure Account Stability

For a high-risk business, account stability is everything. Mainstream processors like PayPal or Square are known for suddenly freezing funds or closing accounts with little warning, which can be devastating. A specialized high-risk processor understands the unique transaction patterns and regulatory landscape of your industry. They provide a stable processing environment, so you can run your business without the constant fear of being shut down. This stability is the most critical feature of all, as it allows you to focus on growth instead of worrying about whether you’ll be able to accept payments tomorrow. It’s the foundation upon which you can build a sustainable business.

Your Step-by-Step Setup Guide

Getting your payment processing set up might seem like a huge hurdle, but it’s completely manageable when you break it down. The key is to be prepared and work with a partner who gets the unique needs of your business. Think of this as a clear roadmap to getting your account approved and integrated, so you can start accepting payments without a hitch. Let’s walk through exactly what you’ll need to do, from gathering your documents to going live.

What You’ll Need for Your Application

First things first, you’ll be applying for a high-risk merchant account. These are specifically designed for businesses that can’t get a standard account due to industry type or transaction models. The application process is more detailed because providers need to fully understand your business operations and risk profile. You’ll need to provide clear information about what you sell, how you market your products or services, and your fulfillment process. Be ready to share details about your business history, including any previous processing history you might have. Honesty and transparency are your best friends here—they build a foundation of trust with your payment processor from day one.

Your Essential Documentation Checklist

To get the ball rolling, you’ll need to gather some key documents. While the exact list can vary, most providers will ask for the basics: a government-issued ID, a voided check or bank letter for your business account, and several months of recent business bank statements. You’ll also likely need your business license, articles of incorporation, and details on your sales volume. When you choose a provider, make sure they understand the specific challenges of your business type. This ensures they know what to look for and can guide you in providing the right documentation to prove your business is stable and legitimate.

What to Expect for Approval Time

Patience is important, but you shouldn’t be left in the dark. Approval times for high-risk accounts can vary quite a bit depending on the provider and the complexity of your business. Some processors who are highly specialized in your industry might give you an answer in as little as 24 to 48 hours. For others, a more thorough underwriting process could take around four to six business days. If you have all your documentation ready and organized, you can help speed things up significantly. Ask any potential provider for their typical approval timeline upfront so you know exactly what to expect.

Steps for a Smooth Integration

Once you’re approved, the final step is integrating the payment gateway with your website or sales system. This is where working with a processor that specializes in hard-to-place businesses really pays off. Their systems are often designed for a simple payment gateway integration, minimizing technical headaches. Your provider should give you clear instructions or even hands-on support to connect their technology to your platform. A good partner will help you test the entire setup to ensure transactions run smoothly, security features are active, and your customers have a seamless checkout experience from the very first sale.

Smart Ways to Manage Risk

Once you have a payment processor, the work isn’t over. Actively managing your account is key to preventing holds, disputes, and other headaches that can disrupt your cash flow. It’s about creating a stable foundation for your business to grow without interruption. Think of it less as a set of rules and more as a series of smart habits that keep your payment processing smooth and secure. This proactive approach lets you focus on running your business, not fighting fires.

How to Monitor Transactions Effectively

Your best defense against chargebacks is a good offense. This means using tools that spot suspicious activity before it becomes a problem. Look for a payment processor that offers robust fraud protection tools that automatically flag potentially risky transactions. These systems analyze data points like IP addresses, order velocity, and AVS (Address Verification System) responses to catch fraud in real time. By monitoring transactions closely, you can significantly reduce the number of disputes you have to deal with, protecting your revenue and keeping your merchant account in good standing.

Strategies for Managing Transaction Volume

Sudden sales spikes—even from a successful marketing campaign—can look like fraudulent activity to a processor, leading to frozen funds. The best way to handle this is to maintain open communication with your payment provider. If you’re planning a big launch or promotion, give them a heads-up. A good partner will work with you to understand your business model and expected volumes. Choosing from the best high-risk merchant accounts means finding a provider that offers personalized service and solutions that can scale with your sales, preventing unnecessary account freezes.

Staying on Top of Compliance

Staying compliant isn’t just about following rules; it’s about protecting your customers and your business from data breaches and hefty fines. The most important standard is the Payment Card Industry Data Security Standard (PCI DSS). Your payment processor should provide PCI-compliant systems that keep customer payment information safe and secure. Don’t be afraid to ask a potential provider about their compliance measures. Ensuring your setup is fully compliant from day one is one of the most important steps you can take to build a trustworthy and resilient business.

Guidelines for International Payments

If you sell to customers around the world, you need a way to handle their payments smoothly and securely. Offering multi-currency conversion is a great way to improve the customer experience, as it allows shoppers to see prices and pay in their local currency. This simple feature can reduce cart abandonment and build trust with your international audience. A processor with experience in global payments can also help you handle the complexities of cross-border transactions, from currency fluctuations to international banking regulations, ensuring you get paid without any surprises.

Keep Your Processing Account Healthy and Growing

Getting your high-risk merchant account approved is a huge milestone, but the work doesn’t stop there. Think of your payment processing account like a garden—it needs consistent attention to thrive. Simply setting it and forgetting it can lead to unexpected problems like holds, freezes, or even termination. To build a stable, long-term processing relationship, you need to be proactive.

This means regularly checking in on your account’s health, using the right technology to stay secure, actively preventing fraud, and planning for your future growth. By taking these steps, you show your processor that you’re a responsible and reliable partner, which is key to maintaining a healthy account and ensuring your payments continue to flow smoothly as your business expands. Let’s walk through how you can keep your account in great shape.

Why Regular Account Reviews Matter

Because high-risk merchant accounts come with stricter rules, they are monitored more closely than standard accounts. That’s why scheduling regular reviews of your account is one of the smartest things you can do. These check-ins give you a chance to catch potential red flags before they become serious issues. Look at your transaction patterns, processing volumes, and chargeback ratios. Are there any sudden spikes or unusual dips?

Treat your relationship with your processor as a partnership. Keep them in the loop about any changes to your business model, new products you’re launching, or marketing campaigns that might cause a surge in sales. This transparency helps them understand your activity and prevents your account from being flagged for suspicious behavior. Consistent communication and review will build trust and keep your account on solid ground.

Staying Current with Technology

In any high-risk industry, your payment technology is your first line of defense. Using outdated systems not only makes you inefficient but also leaves you vulnerable to security breaches and fraud. A great payment processor will provide you with modern, secure, and easy-to-use tools that protect both you and your customers. This includes essentials like end-to-end encryption and tokenization, which safeguard sensitive payment data.

Your payment gateway should also integrate smoothly with your existing website or software. A clunky or unreliable integration can lead to lost sales and a poor customer experience. When you choose a provider, make sure their technology is up-to-date and designed to handle the specific needs of your industry. Staying current with your tech shows your processor you’re serious about security and operational excellence.

Proactive Fraud Prevention Strategies

When it comes to fraud, a reactive approach just won’t cut it. Waiting for chargebacks to happen and then fighting them is a losing battle that can jeopardize your merchant account. Instead, you need a proactive strategy to stop fraudulent transactions before they’re even completed. Your payment processor should offer a suite of tools designed to help you do just that.

Look for features like Address Verification Service (AVS), CVV verification, and more advanced fraud filters that use AI to spot suspicious patterns. Some processors even offer specialized tools that can significantly reduce fraud and chargebacks. By actively using these tools, you not only protect your revenue but also maintain a low chargeback ratio, which is critical for keeping your high-risk account healthy and in good standing.

Planning for Long-Term Growth

As your business grows, your payment processing needs will evolve. The solution that works for you today might not be sufficient a year from now. That’s why it’s important to choose a payment partner who can scale with you. Before you commit, think about your long-term goals. Do you plan to expand into new markets? If so, you’ll need a processor that offers support for international payments.

Discuss your growth trajectory with your processor. If you’re planning a big promotion that you expect will double your sales, let them know ahead of time. A sudden, unexplained spike in volume can trigger an automatic account freeze. By keeping your provider informed, they can adjust your account limits accordingly and ensure you can handle increased demand without any interruptions. Planning ahead ensures your payment processing can support your success, not hold it back.

Frequently Asked Questions

Why are the fees for high-risk accounts higher than standard ones? It’s natural to focus on the fees, but it helps to understand the reason behind them. Processors that work with high-risk industries take on a greater level of financial liability. Because these industries can have higher chargeback rates or operate in complex regulatory spaces, the processor has to invest more in underwriting, compliance monitoring, and fraud prevention tools to protect both you and them. The higher fees reflect this increased operational cost and risk, but a good partner will be transparent about their pricing and provide value that justifies the expense.

I was just dropped by a major processor like PayPal or Square. What’s my first step? First, take a deep breath. It’s a frustrating and common experience for businesses in specialized industries, and it’s not a reflection of your business’s worth. Your immediate priority is to find a specialized high-risk processor who understands your industry. Start gathering the documents mentioned in the setup guide, like your business license and bank statements. When you reach out to new providers, be upfront about your processing history. They are used to this situation and can get you back up and running much faster than you might think.

What is a “rolling reserve” and is it something I’ll have to deal with? A rolling reserve is a risk management tool where a processor holds a small percentage of your daily revenue for a set period, typically a few months, before releasing it to you. This creates a safety net to cover potential chargebacks or refunds. While it’s common in high-risk processing, it’s not a given for every business. The decision to implement a reserve, and the percentage held, depends on factors like your processing history, industry, and chargeback ratio. A transparent provider will explain if a reserve is necessary and clearly outline the terms.

Can my business ever “graduate” from being considered high-risk? In some cases, yes, but it’s best to think of it as a long-term goal. If your business is labeled high-risk due to factors you can control, like a new processing history or a high chargeback rate, you can absolutely improve your risk profile over time. By maintaining a clean processing record with low chargeback ratios for a few years, you may be able to renegotiate for better rates or qualify for a standard account. However, if you’re in an industry that is automatically categorized as high-risk, like CBD or online gaming, you will likely always need a specialized processor who understands your market.

Besides my industry, what’s the biggest mistake that could get my account shut down? Poor communication is one of the biggest and most avoidable mistakes. Many account freezes are triggered by automated systems that flag unusual activity, like a sudden, massive spike in sales. If you’re planning a big product launch or a viral marketing campaign, give your processor a heads-up. Keeping them informed about your business plans helps them understand your transaction patterns and prevents them from mistaking legitimate growth for fraudulent activity. This simple habit builds trust and is key to maintaining a stable, long-term processing relationship.

Top Payment Solutions for Hard to Place Businesses