Merchants in high-risk industries have long dealt with approval issues, lengthy onboarding and more scrutiny than other businesses. You’d think that would be easy to solve by now, right?
You’d think so. But even though the regulatory environment for these businesses has become clearer in recent years, it is still a lot harder to navigate than in lower-risk sectors.
Industry-specific regulation and a higher risk of fraud and chargebacks mean payment providers have to review high-risk applications more closely, and that takes time.
So while instant approval is more aspirational than achievable, knowing what influences approval decisions helps you get through the application faster. Here are the factors that matter and the tips that help you strengthen your application.
Key takeaways
- Genuine instant approval for a high-risk merchant account is rare. Underwriting a high-risk business properly takes time.
- Large platforms that sign businesses up in minutes generally restrict or exclude many high-risk categories in their published policies.
- Five factors shape your approval odds: business history, financial health, industry, compliance and security, and the accuracy of your documents.
- A complete, accurate application is the single biggest thing you can do to speed things up.
- Look past approval speed to fees, reserves, contract terms and support when you choose a provider.
What makes instant approval payment gateways so appealing
Instant approval is hard to come by in high-risk payments. The services that sign businesses up within minutes are mostly large self-service platforms such as Stripe and PayPal. They use automated checks at sign-up, but their published lists of restricted and prohibited businesses exclude or limit many high-risk categories, including adult content, and gambling usually needs separate approval. An account that is opened quickly can also be reviewed and closed quickly if your business turns out to fall into a restricted category.
That is why high-risk businesses are usually better off with a provider that specialises in their industry, even if onboarding takes longer.
The problem with the high-risk payment industry is that, due to the increased risk of loss and regulatory issues, companies have to take longer to review and approve applications. The fastest we’ve seen is about two weeks for high-risk accounts, but it depends on the merchant itself.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
Nobody has found a way to fully automate high-risk onboarding yet. The bottom line: accepting a bit more time at the start usually pays off in a more stable account later.
Payment gateway vs high-risk merchant account: instant approval odds
Businesses are classed as high risk because their industries carry more chargebacks, higher transaction values or industry-specific regulation.
Although adult sites, gambling platforms and travel businesses are more common than ever, many financial institutions still avoid them. So the odds of getting a merchant account fast are rather low.
It helps to know what you are applying for. A high-risk merchant account is your agreement with an acquirer to accept card payments and receive the money. A high-risk payment gateway is the technology that sends each payment for authorisation. The gateway connection itself can often be set up quickly, but you can’t take payments until the merchant account behind it is approved, and that is where the underwriting happens.
The 5 key factors influencing instant approval
Approval by an acquirer is decided case by case, and the criteria vary by region and industry. So it’s hard to say exactly why one business is declined and another approved quickly. Based on our experience with high-risk merchants, though, these five factors influence every application.
1. Business history
A long, stable processing history shows a provider that your business is reliable, which makes you look less risky. It can also lead to better pricing, because you can show you operate without significant losses.
You don’t always need a long history, though. Plenty of high-risk start-ups get a merchant account. New businesses are usually asked for a cash-flow forecast and a business or marketing plan instead.
2. Financial health
Showing consistent revenue and responsible financial management plays a big role in how a provider reviews your application: steady income, healthy cash flow and no significant financial problems.
When you gather evidence, check the dates. Providers want recent documents, typically bank and processing statements from the last few months. Submitting old documents usually means more back-and-forth.
Also make sure your statements clearly show your chargebacks and disputes, if you have any. Hiding them only causes problems later.
3. Industry type and risks
Every high-risk industry gets extra scrutiny, but some need longer reviews because of the regulation and legal requirements providers have to check, for example:
- adult;
- CBD;
- gambling;
- cryptocurrency;
- tobacco, vapes and e-cigarettes;
- travel.
The best way to reduce the delay is to make sure you comply with the rules for your sector before you apply.
Gambling and adult industries, for example, have specific regulations you have to consider and check for, including age restrictions and specific website policies. For CBD, you have to check the product itself, the ingredients, labels, etc.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
4. Compliance and security
To speed up the review, show that you’ve taken the steps needed to sell your products or services securely and legally. What that means depends on your industry:
- Adult: age verification and content moderation in place, with test login details for the reviewer.
- CBD: lab test results for your products, published in a clear place on your shop.
- Gambling: your licences for each market, displayed on your site.
- Cryptocurrency: the licences or registrations your market requires.
- Tobacco and vapes: age verification, legal opinion letters where needed, and compliance with distribution rules.
- Travel: clear insurance, cancellation and refund policies.
Whatever your industry, use a secure (SSL) checkout and keep your team up to date with regulatory changes in your sector.
5. Documentation and application accuracy
Being thorough with your documents makes the process faster. Simple mistakes, such as outdated transaction history or an ID uploaded under the wrong document, cause avoidable delays. Double-check everything before you submit it.
💡 Want to know exactly what to include? Read our complete checklist of requirements.
To increase your chances of approval, get your documentation in order. For example, a lot of people forget to submit login credentials if their website is in beta version. Or, they submit bank statements that are outdated and don’t show access to sufficient funds. We ask for a cash flow forecast and business plan, and we’ve found that it’s great if that plan includes a marketing strategy to show that you have or will have the money to reach your business goals.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
6 tips for improving your approval odds
Whether you want approval instantly, quickly or at all, it depends on several factors. Work with a provider that knows your industry, ask questions, and make sure you understand what is expected in your case.
1. Provide accurate information
Prepare everything before you apply: business registration, licences, processing history, proof of domain ownership and ID. When in doubt, provide more information, not less.
2. Maintain good business standing
Your reputation, online and offline, affects how acquirers see you. A transparent business with clear contact details, terms and customer reviews looks more trustworthy.
3. Improve financial stability
Keep a positive balance, reduce debts where you can, and show steady revenue with few disputes. All of this shows a provider you can handle the financial side of your business.
4. Be realistic about your volumes
Give honest estimates of your monthly volume and average transaction size. Realistic numbers lead to realistic processing limits from day one, and a clean track record makes it easier to raise them later.
5. Strengthen your security
Use an SSL-secured checkout, multi-factor authentication for your admin accounts, 3D Secure and a PCI DSS-compliant integration. Strong security makes you more appealing to providers and to customers.
6. Show a plan for managing chargebacks
High-risk businesses will see some chargebacks, but a high ratio is a red flag for acquirers. Show that you have clear refund policies, quick customer support, fraud screening and a plan for preventing chargebacks.
Choosing the right instant approval payment gateway
Approval speed matters, but it shouldn’t be the only thing you compare. Fees, rolling reserve terms, contract length, integration options, support and industry experience are just as important, often more. A fast approval with poor terms, or an account that is closed a few months later, costs more than waiting a couple of weeks for the right provider. See our guide to comparing high-risk merchant account providers.
Frequently asked questions
Can I get instant approval for a high-risk merchant account?
Rarely. High-risk merchant accounts need underwriting: the provider checks your business, website, documents and processing history. Some payment gateways can be connected quickly, but the merchant account behind them still has to be approved.
How long does high-risk merchant account approval take?
It depends on the provider, your industry and how complete your documents are. Expect days to weeks rather than minutes.
Why do platforms with instant sign-up not work for high-risk businesses?
Self-service platforms approve sign-ups automatically, but their published policies restrict or prohibit many high-risk categories. If your business falls into one, the account can be reviewed and closed later, often with funds held.
What can I do to get approved faster?
Submit complete, recent and accurate documents, make sure your website meets your industry’s compliance requirements, and show a clear plan for managing chargebacks and fraud.
Is guaranteed merchant account approval real?
Be careful with any provider that guarantees approval for a high-risk business without reviewing it. Proper underwriting protects both you and the provider, and accounts approved without it are more likely to be closed later.
Can a start-up get a high-risk merchant account?
Yes. Without a processing history, providers usually ask for a cash-flow forecast and a business plan instead, and may start with lower limits or a rolling reserve.
Next step
Fasto works with adult, subscription, nutraceutical, gaming, dating and hospitality merchants. Approval typically takes two to three weeks.
Get a free, no-obligation quote for a high-risk merchant account and payment gateway.
