High-risk businesses face challenges that other businesses don’t: stricter onboarding, higher fees, closer monitoring and a real chance of having an account closed without much warning. In the UK and Europe, regulation adds another layer, and choosing the wrong provider can cost you months of lost sales.
This guide explains what makes a business high risk, the difference between a merchant account and a payment gateway, what to look for in a high-risk merchant account provider in the UK and Europe, the warning signs to avoid, and what you need to apply.
Key takeaways
- A high-risk merchant account lets a business in a higher-risk industry accept card payments. It is an agreement with an acquirer, not a bank account.
- Most merchants need a merchant account and a payment gateway, and it is simplest to get both from one provider.
- Check that a provider is authorised to serve your country. In the UK, that means the FCA register. Since Brexit, EU licences no longer cover the UK automatically.
- Look for experience in your industry, transparent fees, clear reserve terms, fraud and chargeback tools, and real support.
- Be wary of “instant approval” and “no questions asked”. Proper high-risk onboarding takes time. At Fasto, approval typically takes two to three weeks.
What makes a business high risk?
Acquirers and card schemes call a business high risk when its payments are more likely to lead to chargebacks, fraud, regulatory problems or reputational damage. Common high-risk industries include:
- adult content and services;
- dating;
- gambling and gaming;
- nutraceuticals and supplements;
- CBD;
- vapes and e-cigarettes;
- subscriptions and continuity billing;
- travel and hospitality;
- cryptocurrency.
Other factors can push a business into the high-risk category too: high average transaction values, a short trading history, a high chargeback rate in the past, or customers and suppliers in countries on the UK or EU list of high-risk third countries for anti-money laundering. These lists change, so check the current version from FATF, which the UK and EU lists are largely based on.
High-risk vs low-risk merchant accounts
| Low-risk merchant account | High-risk merchant account | |
|---|---|---|
| Onboarding | Often quick and largely automated | Detailed underwriting, more documents, website review |
| Fees | Lower | Higher, reflecting the extra risk |
| Rolling reserve | Rare | Common, especially at the start |
| Monitoring | Standard | Closer, with card scheme registration for some categories |
| Providers | Most banks and payment platforms | Specialist providers and acquirers |
Read more in our guide to high-risk vs low-risk merchant accounts.
Merchant account vs payment gateway: which do you need?
Merchants often mix these up. They are different things, and you usually need both.
High-risk merchant account
A high-risk merchant account is your agreement with an acquirer to accept card payments. The acquirer receives the money from the card schemes, deducts its fees and any reserve, and settles the rest to your business bank account. Your merchant account comes with a merchant ID and a merchant category code that tells the card schemes what you sell.
High-risk payment gateway
A payment gateway is the technology that takes the customer’s card details at checkout and sends them securely to the acquirer for authorisation, then returns the result. A good gateway connects to your website or platform, supports 3D Secure, and gives you tools for fraud screening and reporting.
Which is best?
You don’t have to choose. The merchant account and the gateway work together, and getting both from the same provider means one onboarding, one contract and one support team.
It’s usually always easier and better to get high-risk merchant account and payment gateway solutions from the same provider. At FastoPayments, we work with five different gateways, allowing us to cover a majority of the acquirers in the world.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
What to look for in a high-risk merchant account provider
Authorisation in your market
Check that the provider, or the acquirer behind it, is authorised to offer payment services where you trade. In the UK, you can look up firms on the FCA register. In the EU, payment institutions are authorised by their national regulator and can serve other EU countries under passporting. Since Brexit, an EU licence no longer covers the UK on its own, and a UK licence no longer covers the EU, so ask how the provider serves your country.
Experience in your industry
An acquirer that already works with adult, gambling or nutraceutical merchants knows the card scheme rules for your category and is less likely to close your account in a panic. Ask which industries the provider works with and whether it handles card scheme registration for your MCC.
Transparent fees and reserve terms
High-risk processing costs more, and that’s normal. What matters is that every fee is explained up front: transaction fees, chargeback fees, monthly and setup fees, scheme registration fees, and the rolling reserve percentage, hold period and cap. Cheap headline rates with hidden fees end up costing more.
Fraud and chargeback tools
Look for 3D Secure, fraud screening, and access to pre-dispute and alert services, so you can keep your dispute ratio below card scheme thresholds such as those in Visa VAMP.
Payment methods and currencies
If you sell across Europe, cards alone are not enough. Ask which local payment methods and settlement currencies are available for your business type.
Integration
Check that the gateway works with your platform, shopping cart or billing system, through a plugin, hosted payment page or API.
Support and account management
When payments stop, you need someone who answers. Ask who your contact will be, how quickly they respond, and how account reviews work.
When choosing a high-risk payment gateway, it does matter which one you have. For example, while it might seem small on paper, losing even 1% of your revenue yearly is a lot of money in the long run. The acquirer they work with will affect your approval odds, so it’s important to consider what you do and who you work with.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
Warning signs when choosing a provider
- “Instant approval” for high-risk businesses. Real underwriting takes time. A provider that approves without checks may close the account just as fast. Read more about instant approval payment gateways.
- Vague answers about the acquirer. You should know which acquirer processes your payments and in which country.
- Fees you only find in the contract. Ask for a full fee schedule before you sign.
- Advice to describe your business as something else. Miscoding your business to get approved breaks card scheme rules and can end with your account closed and your business on the MATCH list.
- No clear reserve terms. Get the percentage, hold period, cap and release conditions in writing.
How to apply for a high-risk merchant account
High-risk applications need more documents than standard ones. Gather them before you start: it is the single biggest factor in how fast you get approved. Typical requirements are:
Company documents
- certificate of incorporation and articles of association;
- passport copies and proof of address for directors, owners and authorised signatories;
- proof of ownership of your domain;
- recent business bank statements.
Website requirements
- company name and address, and customer service phone number and email;
- terms and conditions, privacy, refund and cancellation policies;
- a secure checkout (SSL);
- test login details if your content is behind a login.
Industry-specific documents
- licences where your industry needs them, for example a gambling licence;
- supplier agreements and product lab tests, for example for CBD or nutraceuticals;
- processing statements from previous providers;
- a PCI DSS self-assessment questionnaire, and vulnerability scans if you integrate directly.
See our full requirements checklist, and our guide on building a website that gets approved.
Keeping your merchant account healthy
Getting approved is only the start. To keep your account, keep chargebacks and fraud low, tell your provider before you change your products or markets, and stay compliant with the rules for your industry and the countries you sell to. Our guide to preventing chargebacks is a good place to start.
Frequently asked questions
What is a high-risk merchant account?
A high-risk merchant account lets a business in a higher-risk industry, such as adult, gambling or nutraceuticals, accept card payments. It is an agreement with an acquirer that processes and settles your card payments, usually with higher fees and a rolling reserve.
How do I choose a high-risk merchant account provider in the UK?
Check that the provider is authorised to serve UK merchants on the FCA register, has experience in your industry, explains all fees and reserve terms up front, and offers fraud and chargeback tools and responsive support.
Can a UK business use a European merchant account provider?
Yes, if the provider is authorised to serve UK merchants. Since Brexit, an EU licence doesn’t automatically cover the UK, so ask the provider how it serves UK businesses.
Do I need a merchant account and a payment gateway?
Usually yes. The merchant account lets you accept and receive card payments, and the gateway takes the card details at checkout and sends them for authorisation. Many providers offer both together.
How long does it take to get a high-risk merchant account?
It depends on the provider, your industry and how complete your documents are. Be careful with promises of instant approval. At Fasto, approval typically takes two to three weeks.
What documents do I need to apply?
Company registration documents, ID and proof of address for directors and owners, bank statements, a compliant website, and industry-specific documents such as licences or lab tests. Processing statements from previous providers help too.
Next step
Fasto works with high-risk merchants in the UK, Europe and beyond, in adult, subscription, nutraceutical, gaming, dating and hospitality. Approval typically takes two to three weeks.
Get a free, no-obligation quote for a high-risk merchant account.
