Some industries find it much harder to get payment processing than others. Banks and acquirers class them as high risk, which means stricter onboarding, higher fees, reserves and closer monitoring, and in some cases registration with the card schemes before a single payment can be taken.
This guide lists the industries most often treated as high risk, explains why each one is, and covers what being in a high-risk industry means for your payments and how to reduce the impact.
Key takeaways
- An industry is treated as high risk when its payments carry more chargebacks, fraud, regulation or reputational risk for the card schemes and acquirers.
- Visa requires acquirers to register before processing for some categories: adult content, dating and escort services, gambling and pharmacies, and, at a second tier, crypto, cyberlockers and games of skill.
- Many other industries, such as nutraceuticals, CBD, vapes, travel and subscriptions, are treated as high risk by acquirers even without scheme registration.
- Being high risk usually means higher fees, a rolling reserve, more documents and closer monitoring.
- Good compliance, low chargebacks and a clear website make a big difference to the terms you get.
What is a high-risk business?
A business is high risk when the acquirer that processes its card payments sees a higher chance of losses. The acquirer is liable for chargebacks and refunds that a merchant can’t cover, so it looks at:
- What you sell: regulated, age-restricted or controversial products and services.
- How you sell it: subscriptions, free trials, delivery long after payment, high transaction values or international sales.
- Your history: a short trading history, previous high chargeback rates or account closures.
Industry is the biggest factor, but not the only one. A business in a “low-risk” industry can still be treated as high risk because of how it sells. Read more about the difference between high-risk and low-risk merchant accounts.
Card scheme high-risk categories
Under Visa’s Integrity Risk Program, acquirers need Visa’s approval before they can sign or process for high-integrity risk merchants:
| Tier | Category | MCC |
|---|---|---|
| Tier 1 | Adult content | 5967 |
| Tier 1 | Dating and escort services | 7273 |
| Tier 1 | Gambling | 7995 |
| Tier 1 | Pharmacies | 5122, 5912 |
| Tier 2 | Crypto merchants (exchanges, wallets, on-ramps), card-absent | 6051, 6012 |
| Tier 2 | Cyberlockers and file-sharing services, card-absent | 4816 |
| Tier 2 | Games of skill, card-absent | 5816 |
Mastercard has its own registration requirements for certain categories. Your merchant category code decides which rules apply, so it must reflect what you actually sell.
List of high-risk industries
| Industry | Why it is treated as high risk |
|---|---|
| Adult content and services | Card scheme registration, age verification rules, brand risk, “I didn’t authorise this” disputes |
| Dating and escort services | Scheme registration, subscriptions, friendly fraud |
| Gambling and gaming | Licensing that differs by country, scheme registration, issuer blocks, fraud |
| Nutraceuticals and supplements | Health claims, free trials and continuity billing, high chargeback rates |
| CBD and cannabis | Legal status that varies by country, product testing and labelling rules |
| Vapes, e-cigarettes and tobacco | Age restrictions, product and cross-border sales rules |
| Subscriptions and continuity | Forgotten renewals and free trial disputes |
| Travel | Payment taken long before delivery, cancellations, long dispute windows |
| Cryptocurrency | Fraud and money laundering risk, scheme registration, fast-changing regulation |
| Nightlife and adult venues | High transaction values, disputes about bills, brand risk |
| Pharmacies and telehealth | Prescription rules, counterfeit risk, scheme registration |
| Online education and coaching | High-ticket courses, refund disputes, payment plans |
Other businesses often treated as high risk include file-sharing services, debt and credit services, firearms accessories, high-value electronics and luxury goods, depending on the acquirer.
What being high risk means for your payments
Stricter onboarding and compliance
Expect a detailed application: company and owner documents, processing history, licences where needed, and a thorough review of your website. Our guide to getting approved for a high-risk merchant account explains what acquirers check.
Higher fees
Processing, chargeback and scheme registration fees are higher than for low-risk merchants, because the acquirer takes on more risk and more monitoring.
A rolling reserve
Most high-risk merchants start with a rolling reserve, a share of settlements held back for a set period to cover future chargebacks.
A merchant account reserve refers to what are basically involuntarily savings that merchant processors keep as a safeguard against certain risks. This usually amounts to 10% in high-risk industries. If you don’t have any chargebacks or fraud and operate within a low-risk industry, it’s easy to negotiate it down to a lower percent. However, in high-risk industries, it’s usually set at 10%, and it’s hard to lower that. I wouldn’t trust a merchant services provider who says they can negotiate extremely lower percentages for a high-risk business, as they’re not trustworthy.
Dennis E.R. Pedersen, CEO and Founder of FastoPayments
Closer monitoring
Card schemes monitor fraud and disputes under programmes such as Visa VAMP, and acquirers watch high-risk merchants closely. A sustained spike can lead to higher reserves, volume caps or a closed account.
A higher chance of ending up on the MATCH list
If an acquirer closes your account for reasons such as excessive chargebacks or fraud, it may add your business to the MATCH list, which makes getting a new account much harder.
How to reduce your business’s risk
- Get compliance right. Know the rules for your products and the countries you sell to, and hold the licences you need.
- Make your website clear and consistent. Company details, terms, refund and cancellation policies, product information and age verification where required.
- Keep chargebacks low. Recognisable billing descriptors, easy refunds and fast support. See our guide to preventing chargebacks.
- Use fraud controls. 3D Secure, fraud screening and card-testing protection.
- Be transparent about subscriptions. Clear terms, renewal reminders and easy cancellation. See our guide to recurring billing.
- Use the right MCC. Miscoding your business to look less risky breaks card scheme rules.
What to look for in a payment provider
- experience with your industry and the card scheme rules for your MCC;
- clear, honest fees and reserve terms, in writing;
- support for the currencies and local payment methods your customers use;
- fraud and chargeback tools;
- an individual risk assessment rather than a blanket decision based on your industry label.
Read more on how to compare high-risk merchant account providers.
Frequently asked questions
What are high-risk industries for payment processing?
Common examples are adult content, dating, gambling, nutraceuticals, CBD and cannabis, vapes and tobacco, subscriptions, travel, cryptocurrency and pharmacies. Acquirers class them as high risk because of higher chargebacks, fraud, regulation or brand risk.
Why are some industries considered high risk?
Because their payments are more likely to lead to chargebacks, fraud or regulatory problems, and the acquirer is liable for losses a merchant can’t cover. Age restrictions, delayed delivery and subscriptions all add to the risk.
Which merchant categories need Visa registration?
Under Visa’s Integrity Risk Program, Tier 1 includes adult content (MCC 5967), dating and escort services (7273), gambling (7995) and pharmacies (5122 and 5912). Tier 2 includes card-absent crypto merchants, cyberlockers and games of skill.
Can a high-risk business get a merchant account?
Yes. Specialist providers and acquirers work with high-risk industries. Expect a detailed application, higher fees and a rolling reserve, especially at the start.
What is a merchant account reserve?
A reserve is a share of your card sales that the acquirer holds back for a set period to cover future chargebacks and refunds. It is released to you once the hold period ends.
How can I lower my business’s risk level?
Keep chargebacks and fraud low, make your website and policies clear, use 3D Secure and fraud screening, be transparent about subscriptions, and build a clean processing history.
Next step
Being in a high-risk industry doesn’t mean you can’t get good payment processing. Fasto works with adult, subscription, nutraceutical, gaming, dating and hospitality merchants. Approval typically takes two to three weeks.
Get a free quote and tell us about your business.
Source: Visa Integrity Risk Program.
