High-Risk v/s Low-Risk Merchant Account: Pricing Difference

6 Tips for Finding Your Ideal High-Risk Merchant Services Provider

High-risk businesses are more likely to engage in activity with more financial risk involved. what high-risk business is? E-commerce companies have been growing rapidly in recent years alongside payments done with credit and debit cards. As a consequence, this makes it challenging to complete all transactions quickly and error-free.

E-commerce retail sales made up about 20% of all retail sales globally in 2021. Forecasts indicate that by 2025, this segment will grow to over 25%. Seamlessly handling these increasingly numerous transactions is crucial to maintaining uninterrupted business operations. Additionally, financial fraud threats are rising with growing numbers of online purchases. If gone unchecked, businesses risk losing a significant portion of their revenue due to financial fraud.

Finding an ideal high-risk Merchant Services Provider takes work. Many factors need to be considered, such as the types of services offered, the types of risks they can cover and the reputation.

This article will provide a list of 6 tips to help make your decision easier by breaking down these factors.

Type of services offered: You want a provider that offers high-risk merchant services, so it is important to determine what these services are before you start looking.

Types of risks they can cover: Every company has their own set of risks, and it is important to match what your company needs with what this provider provides.

Reputation: You want a provider with a good track record in customer service and service quality, so you should look for reviews on this aspect before settling for one supplier.

high risk

Suppose you are an online seller called a high risk merchant, somehow you must be looking for different ways to tackle the situation. There are a lot of business owners who don’t understand what is high risk merchant account until or unless they are being called one. It's important to know that being called high-risk usually isn't a personal comment on the business owner.

Payment processors are ready to take risks where business is involved. Payment processor also plays an important role when merchants don’t have adequate funds to reimburse customers for dispute charges. Payment processor takes the liability to make careful decisions about the type of business with which they work. Payment processing providers do not provide merchant service to that businesses that are considered too high risk.

Determining If Your Business Is High-Risk

Every provider of high-risk merchant accounts sets their own criteria for determining risk. Generally, these providers evaluate two main aspects: the industry of the business and its financial background, including credit history.

Some of the factors that payment processors rely on when classifying businesses as high risk include.


Business with high chargeback rates are generally categorized in high risk business. Businesses who have chargeback more than 1% are considered as high risk Chargebacks can occur for many reasons, from customers forgetting they subscribed to recurring services to those who are charged without their agreement.


Business serves several products to customers and various products can lead to experiencing inconsistent profits. Normally, payment processors view as a warning sign and suggest financial uncertainty.


Handling customer sensitive data is considered high-risk due to the potential for data breaches and identity theft.


Financial institutions may classify businesses as high-risk when they regularly handle transactions that are large in value but infrequent in occurrence.


Businesses with low credit scores are less likely to be lent money by financial institutions.

Find the below common example of High Risk Businesses

Adult Entertainment

Adult Industries acquire high risk merchant accounts for payment processing. You should select a reputable company that has direct relationships with a bank that offers payment processing.

E-Cigarettes and Vaping

E-cigarettes and vaping products are often deemed high-risk by financial institutions due to regulatory uncertainties and varying legal statuses across regions. Additionally, the associated health concerns and age restrictions contribute to their high-risk classification.


The seller of Firearm are categorized as high risk even after companies experience. Company often sell firearm difficult to find payment processing solution. Credit card providers are often worried about potential regulations addressing firearms.

Subscription box services

Subscription box services are considered high risk due to their susceptibility to high chargeback rates and cancellations, often stemming from customer dissatisfaction or billing disputes. Additionally, the recurring payment model can lead to issues with payment continuity and card expiration.

Other frequently identified high-risk sectors encompass airlines, reservation services, motor vehicle warranties, credit repair services, consulting, CBD, medical marijuana, debt collections, online gaming, pawn shops, vaping, and web design.

6 Tips for finding the right high-risk merchant services for your business

Fast and High Approval Rates

Select a high-risk merchant account supplier that takes pride in offering quick approvals. So that your company can start accepting credit cards right immediately, the application and approval processes should be rapid.

A supplier with many positive reviews is another option to consider. Reviews are great in making sure that banks that do business with companies like yours will receive your application, which will save you a ton of time..

Securing the Security

Security is crucial when selecting a high-risk account provider. That is because the security of a company's financial assets is of utmost importance. The best high-risk merchant account providers are those that ensure the security of all of your financial transactions. Therefore, you will want to find a supplier that takes the initiative and offers the top fraud prevention services.

Do extensive research before choosing a supplier for your accounts. Select a service provider with no history of fraud. Additionally, find out what kind of precautions they take to lessen the chance of financial theft.

Choose A Processor with Experience in Your Industry

The ideal high-risk merchant account can be set up with the assistance of an experienced high-risk merchant account provider. This is because they have built up a sizable network of high-risk banks over time and have personnel skilled in developing and improving their network of local and international banking partners. As a result, they can provide various solutions for practically all high-risk merchant account types.

A high-risk merchant account provider who has been around for a long time has also tried and tested the majority of financial institutions to determine which is the best fit for your company.

Quick Access to Your Funds (Next Day Funding)

With next-day funding, businesses get their credit card transaction proceeds the following day. Typically, for the cash to be available for the next business day, you must process your daily batch before a set time. Additionally, you should inquire about your payment service's policies on transactions on Fridays and Saturdays because, oftentimes "next-day" refers to next business day.

Look for Providers Without Lengthy Contracts

As you research the different high-risk payment processing companies, you'll discover that some want long-term contracts, especially for high-risk businesses.

Another clause that may come as a surpriseis the automatic renewal clause. Read the small print and inquire about the duration of the contract to avoid this. Searching for a supplier that offers flexibility through month-to-month contracts is ideal. By doing this, you may adapt your services to your company's needs.

Select Processor with Minimum Documentation Requirements

Making sure your payment processor can handle your processing requirements will prevent you from having to forgo services you need, or deal with multiple payment service providers.

Credit card terminals, point-of-sale systems, mobile payment solutions, payment gateways, and integrations are some of the most standard payment processing services that should be provided. Keep in mind that as long as they are provided by the service provider and properly priced, they only need to be included in the base cost for your high-risk merchant account.

The tips provided above are not exhaustive, and simply provide some guidelines to keep in mind when looking for the right provider. Of course, as a business owner it is necessary to do your own research and due diligence, as well as read other customer reviews. Merchantech has proudly and successfully been serving high-risk accounts for years. Contact us today to find out how we can take your business to newer heights.

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