What Can High Risk Merchant Account and Do?

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Every business comes with risks; some are open to more than others. What does more risks mean to your business? It means greater legal and financial concerns, from more operating costs to difficulty acquiring financing and merchant accounts, among others.

In an era when cashless transactions are gaining ground, with higher adoption in Europe and the US slowly catching on, a high risk business will be under further scrutiny from payment gateways. And the outcome is high risk merchant account, with providers like

How Does a High-Risk Merchant Account Work?

A high-risk merchant account is specifically designed to cater to businesses operating in industries deemed high-risk due to factors such as higher chargeback rates, potential fraud risks, or regulatory considerations. Unlike traditional merchant accounts, which are easier to obtain, high-risk merchant accounts involve a more thorough risk assessment and underwriting process.

Payment processors and acquiring banks specializing in high-risk businesses evaluate the business’s risk profile, financial stability, and compliance with industry regulations. Once approved, the high-risk merchant account allows the business to accept payments from customers through various payment methods, such as credit cards. The payment processor and acquiring bank work together to facilitate the secure transfer of funds while also implementing robust fraud detection and prevention measures. 

Despite the associated risks, high-risk merchant accounts allow businesses to access payment processing services tailored to their specific needs and enable them to operate in industries that would otherwise face challenges in obtaining traditional merchant accounts.

What’s a High Risk Merchant Account?

Businesses in certain industries are classified as high risk, like firearms sale or weed dispensaries. Photo by Cova Software on Unsplash

High risk merchant accounts are created for businesses that have been identified as being at higher risk for:

  • High volume returns
  • Chargebacks
  • Fraud

High risk merchants may include the following businesses:

  1. The firearms and tobacco sales
  2. Marijuana dispensaries
  3. CBD and vape shops
  4. Online gambling
  5. Online dating
  6. Debt collection
  7. Multi-level marketing
  8. Bail bonds
  9. Travel and vacations
  10. Mail-order transactions

The industry where your business operates isn’t the only factor payment processors look at when classifying it as “high risk.”

Startups may also be considered as risky since the payment history will be nil to minimal. It’s similar to how banks may not be open to approving a business loan to new merchants because a track record has not been established just yet. In relation to this, businesses with a low credit score may be classified as high risk as well.

Businesses that have foreign currencies, or even cryptocurrencies, for their transactions may be deemed “risky,” too. So if your company accepts international payments, you may be a high risk merchant and need an account with a provider handling such businesses.

Many payment gateways tend to list such businesses as high risk, opting not to accept their applications for payment processing. Some payment gateways will be able to accept risky companies, but it’ll mean higher fees.

Your high risk business will be charged with higher payment processing fees, chargeback fees and interchange fees, among others. Aside from higher fees, high risk merchants are also subjected to longer contracts, monthly fees or early termination fees and a rolling reserve. A rolling  reserve is  a percentage of your business income that a payment processor holds until a verification of your transactions come out as not fraudulent.

High-Risk Merchant Account Eligibility Criteria

The eligibility criteria for a high-risk merchant account are determined by various factors that assess the risk profile of the business. Some common considerations include industry risk, chargeback ratios, credit history, and compliance with regulatory requirements. High-risk industries, such as online gambling, adult entertainment, and pharmaceuticals, are more likely to require a high-risk merchant account. 

Financial stability and operational requirements are also evaluated, with businesses expected to demonstrate a solid financial track record and meet certain revenue thresholds. Additionally, businesses seeking a high-risk merchant account must provide comprehensive documentation, including business licenses, financial statements, bank statements, and any other relevant information that supports their eligibility. Meeting these criteria is essential for businesses to access high-risk merchant account providers’ benefits and specialized services.

Comparison of High-Risk vs. Low-Risk Merchant Accounts

When comparing high-risk and low-risk merchant accounts, several key differences become evident. Low-risk merchant accounts are generally easier to obtain, with less stringent underwriting requirements and lower risk tolerance. These accounts typically have lower chargeback ratios and require less comprehensive documentation. In contrast, high-risk merchant accounts are designed for businesses operating in industries with a higher risk profile, such as adult entertainment or online gaming. 

They involve stricter underwriting processes, higher processing fees, and more extensive risk management measures. High-risk merchant accounts often come with specialized payment gateways and processors tailored to address the unique needs of these businesses. 

While low-risk accounts offer lower fees and rates, high-risk accounts provide benefits such as enhanced fraud prevention tools, broader market opportunities, and the ability to accept various payment methods. Ultimately, the choice between a high-risk or low-risk merchant account depends on the specific needs, risk tolerance, and industry of the business.

How Do You Get a High Risk Merchant Account?

business deal
Choose your high risk merchant account provider well and fill out an application to get your account. Photo from Pexels

If your business has been labeled “high risk,” you don’t have to restrict your transactions to just cash. Your business may still be able to accept credit card payments through high risk merchant account providers, like

High risk merchant processor has been providing payment gateway services and merchant account for 20 years. It exclusively serves high risk businesses in America. Some of the companies it works with are debt collection agencies, e-commerce companies, online pharmacies, firearms merchants and CBD and hemp shops. So if your business needs a CBD payment processor, may be able to help.

Before you go and apply with just High Risk Pay, know that other high risk merchant account providers have been rated as better.

According to Forbes, these providers for high risk merchant accounts are some of the best:

  • Helcim
  • Payment Depot
  • Host Merchant Services
  • Durango Merchant Services
  • Payment Cloud

To get a high risk merchant account, fill out an application form and attach the required documents. The provider will then find a bank where your merchant account will be opened. So your application doesn’t guarantee you’ll get a high risk merchant account. It’s important to find the right payment processor.

How to Find the Right High Risk Merchant Account Provider

First, look at the list of credible high risk credit card processing providers. This will include reading up on customer reviews as well as finding their business ratings. The next step is to talk to the providers you’ve shortlisted.

The high risk merchant account providers must have a deep understanding of your business. So you must go over key information about your company.

Once the provider learns more about your business, it’s your turn to evaluate their services.

  • Does the high risk merchant account provider do multiple payment methods, from credit cards and international options to cryptocurrency and echecks?
  • What are the transaction fees?
  • What industries does the high risk payment processor work with?
  • Do they have an early termination fee?
  • What type of support will you get with your account?
  • Does the high risk merchant account provider, like, offer flexibility and customization?

A business by itself is a risk. It doesn’t matter whether the industry isn’t risky. Once you make a commitment to invest in a commercial endeavor, you’re opening yourself up to legal and financial challenges. But with each risk comes a solution. And if you’re in the high risk industry and must process credit card payments, find the right merchant account provider.

10 Amazing Benefits of High-Risk Merchant Accounts

High-risk merchant accounts have plenty of benefits, here are some of them. 

Expanded market opportunities for high-risk businesses

High-risk merchant accounts open doors to broader market opportunities, enabling businesses to reach a larger customer base. With the ability to accept payments from customers who prefer credit cards or other payment methods, high-risk businesses can tap into new markets and expand their reach.

Availability of specialized payment gateways and processors

High-risk merchant accounts provide access to specialized payment gateways and processors that are specifically designed to cater to the unique needs of high-risk businesses. These gateways and processors offer robust security features, fraud prevention tools, and customizable options to ensure smooth payment processing.

Ability to accept various payment methods, including credit cards

High-risk merchant accounts enable businesses to accept a wide range of payment methods, including credit cards. This flexibility allows customers to choose their preferred payment method, increasing convenience and improving the overall customer experience.

Enhanced fraud detection and prevention measures

High-risk merchant accounts come with advanced fraud detection and prevention measures. These include real-time transaction monitoring, risk assessment tools, and security protocols to safeguard against fraudulent activities. This helps protect businesses from financial losses and reputational damage.

Integration with recurring billing and subscription services

High-risk merchant accounts facilitate integration with recurring billing and subscription services. This feature is particularly beneficial for businesses offering subscription-based products or services, as it automates the billing process, reduces administrative tasks, and ensures a seamless customer experience.

Increased flexibility and customization options for payment processing

High-risk merchant accounts offer businesses increased flexibility and customization options for payment processing. This includes features such as setting up installment plans, implementing dynamic currency conversion, and tailoring payment pages to match the business’s branding and customer preferences

Access to dedicated customer support and risk management services

High-risk merchant accounts often provide access to dedicated customer support and risk management services. Experienced professionals can assist businesses with navigating the complexities of payment processing, addressing issues promptly, and managing potential risks effectively.

Potential for higher revenue and sales growth

By accepting a broader range of payment methods and reaching a wider audience, high-risk businesses have the potential to increase their revenue and achieve sustainable sales growth. Offering convenient payment options can attract more customers and encourage repeat purchases.

Improved reputation and credibility for high-risk businesses

Establishing a high-risk merchant account can enhance the reputation and credibility of businesses operating in industries often associated with higher risk. Accepting a variety of payment methods and demonstrating compliance with industry regulations builds trust with customers and stakeholders.

Compliance with industry regulations and standards

High-risk merchant accounts ensure businesses adhere to industry regulations and standards, promoting compliance and mitigating potential risks. By following legal and ethical guidelines, high-risk businesses can operate with confidence, demonstrating their commitment to responsible practices.

Pros and Cons of Getting a High-Risk Merchant Account

In the following section, we’ll take a look at some of the pros and cons of getting a high-risk merchant account. 


    • Increased revenue potential – Obtaining a high-risk merchant account opens doors to expanded revenue potential. By accepting a wider range of payment methods, businesses can attract more customers and increase sales opportunities.
  • Access to specialized services and tools – High-risk merchant accounts offer access to specialized services and tools tailored to the unique needs of high-risk businesses. These include advanced fraud prevention measures, risk management services, and specialized payment gateways.
  • Enhanced fraud protection – High-risk merchant accounts prioritize robust fraud protection, providing businesses with advanced tools and technologies to detect and prevent fraudulent activities. This helps minimize the risk of financial losses due to fraudulent transactions.
  • Ability to accept diverse payment methods – High-risk merchant accounts enable businesses to accept diverse payment methods, including credit cards, debit cards, and alternative payment options. This flexibility caters to customer preferences and improves overall convenience.
  • Market expansion opportunities – High-risk merchant accounts open up market expansion opportunities for businesses. By being able to process payments from customers worldwide, businesses can tap into new markets and reach a broader customer base.


  • Higher processing fees and rates – High-risk merchant accounts often come with higher processing fees and rates compared to low-risk accounts. This is due to the increased risk associated with high-risk industries, which requires payment processors to mitigate potential losses.
  • Strict underwriting and documentation requirements – Obtaining a high-risk merchant account involves more stringent underwriting and documentation requirements. Businesses must provide comprehensive documentation, financial statements, and other supporting information to demonstrate their eligibility.
  • Potential for frequent chargebacks and disputes – High-risk businesses may face a higher likelihood of chargebacks and disputes. This can result from factors such as customer dissatisfaction, fraud attempts, or regulatory scrutiny. Dealing with chargebacks and disputes requires careful management and can impact cash flow.
  • Limited choice of acquiring banks and payment processors – High-risk businesses may have a limited selection of acquiring banks and payment processors willing to work with them. This reduces the flexibility and choice available to businesses when it comes to selecting a payment processing partner.
  • Impact on the business’s reputation and credibility – Being classified as a high-risk business can potentially impact a company’s reputation and credibility. Some customers may perceive high-risk businesses negatively, which can affect customer trust and brand image. Building and maintaining a strong reputation becomes crucial in mitigating these effects.
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