High-Risk Merchant Accounts and Payment Processing for High-Risk Industries

A high-risk merchant account allows businesses in high risk industries to accept payments. It is a type used by businesses with a higher risk of finance-related issues, such as fraud or excessive chargebacks.

This doesn’t mean these businesses are wrong; they operate in industries where these risks are more common. Traditional banks and financial institutions are less likely to work with businesses in the high-risk category.

A high-risk merchant account works by collecting payment information, processing transactions, and sending money from the buyer to the seller, while the payment gateway confirms and allows the transaction.

High-risk merchant accounts differ significantly from low-risk merchants in payment processing. This distinction has to do with the assessment of risk levels in their respective industries.

High-risk merchants, often in sectors prone to increased chargebacks, face stricter scrutiny in credit card and ACH transactions, resulting in higher chargeback fees. They may also encounter a higher rolling reserve, and processing fees are typically elevated due to added complexities.

On the other hand, low-risk merchants enjoy smoother processing, lower chargeback fees, potentially no rolling reserve, and more favorable processing fees due to their reduced risk profile.

When do I need a high-risk merchant account?If your industry is labeled high-risk by banks and payment processors, a high-risk merchant account is likely necessary.

These accounts typically include more robust fraud prevention and security measures.

Consider a high-risk payment solutions provider if your business:

• Often experiences chargebacks (when customers dispute a charge and ask for their money back)
• Sells products or services to customers internationally, especially if you deal in multiple currencies
• Is prone to seasonal fluctuations, which affect steady revenue streams
• Operates in a high-risk industry

Yes, if you operate in a high-risk industry and are in the market for a high-risk merchant processor, it is advisable to use it along a high-risk payment gateway.

A high-risk payment gateway is specifically designed to accommodate businesses with elevated risk profiles, offering specialized features to manage the challenges associated with high-risk transactions.

Look for payment processors specializing in high-risk credit card processing who are experienced in dealing with the unique challenges of high-risk industries – like PayFasto.

With a 90%+ approval rate, we get your high-risk payment processing platform approved and running as soon as possible. You can count on personalized, dedicated support every step of the way.

Fill out the short form and get your free quote within 12 hours, no strings attached.

To find the best high-risk merchant account provider, start by researching and comparing options:

• Look for providers with a solid reputation in handling high-risk industries, checking for customer reviews and testimonials if possible.
• Evaluate their experience in your specific industry and assess the range of services offered, including fraud prevention measures and customer support.
• Compare fee structures, considering processing fees, chargeback fees, and any additional costs.
• Ensure the provider complies with industry regulations and offers transparent terms.

Rates for high-risk merchant accounts can vary widely depending on factors such as industry type, processing volume, and the provider’s policies.

Generally, high-risk merchants can expect higher processing fees and possibly elevated chargeback fees compared to low-risk counterparts.

Request a personalized quote from PayFasto for merchant account rates that fit your industry and processing volume.

Payment processing fees in high-risk industries tend to be higher than those in low-risk sectors.

Typically, average rates span from 2.5% to 10% per transaction. Additionally, many high-risk merchant accounts may incur a monthly fee, typically falling between $10 and $50.

Keep in mind that rates can vary widely based on the specific industry, business model, and the payment processor’s policies.

Instant approval for a high-risk merchant account is rare due to the complexities involved in assessing risk profiles. High-risk businesses often encounter lengthy response times and support communications that lack depth or expertise, leading to frustration for customers.

If you want to get tips on how to speed up the process, we have an entire article on getting a high-risk merchant account with instant approval. 

PayFasto boasts a 90% approval rate for our high-risk merchants. We aim to speed up approvals, typically approving low-risk profiles as soon as within 24 hours, and getting high-risk merchant accounts up and running within up to 2 or 3 weeks – staying always one call away to update you on the process.

High-risk businesses are those that operate in industries that financial institutions and payment processors consider more likely to encounter issues like chargebacks, fraud, or regulatory challenges.

These industries often face higher scrutiny and may have difficulty obtaining standard merchant services.

Here’s a list of industries that are considered high risk:

• Adult Industry (adult films, magazines, and websites, toys, and live performances)
• Affiliate Marketing 
• Cannabis and Marijuana businesses
• CBD businesses (CBD, oil, edibles, supplements and more)
• Credit Repair and Debt Management 
• Cryptocurrency 
• Dating and Escort Services 
• Debt Management and Collection Agencies 
• Direct Sales and Pyramid Selling 
• Drugs and Drug Products (Including Prescriptions) 
• E-Cigarettes and Vapes
• Gambling, Casino, and Online Gaming  
• Investment Schemes
• Travel Agencies

The required credit score for a merchant account varies among providers, but generally, a good to excellent credit score is preferred. Many high-risk merchant service providers look for a score of 650 or higher.

However, some high-risk merchant account solutions may be more lenient or not heavily reliant on credit scores, focusing instead on other factors such as business stability, industry risk, and financial history.

It’s advisable to check with specific providers for their criteria, as requirements can differ based on the type of merchant account and the provider’s policies.

Yes, setting up a merchant account is an essential step for eCommerce businesses.

A merchant account makes it possible for online businesses to accept credit and debit card payments securely. It acts as an intermediary between the business, the customer, and the payment processor, facilitating smooth and secure transactions.

While some platforms offer simplified payment processing without a traditional merchant account, having one provides additional flexibility, control, and customization options for managing eCommerce transactions.

At PayFasto, we offer US high-risk merchant accounts, UK high-risk merchant accounts, and serve most European markets, including (but not limited to) countries such as:

• Spain
• Italy
• France
• Germany
• Portugal
• Denmark
• Sweden
• Greece
• Austria
• Malta
• Monaco
• Netherlands
• More!