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

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.

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.

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