A high-risk merchant account is designed for high-risk businesses. If you don’t know your risk level, our guide below will help you understand better.
Business owners in high-risk industries face unique challenges when seeking payment processors. Knowing your options opens doors to reliable merchant services that support your growth, not hinder it.
Payment processors label certain businesses as high risk based on specific criteria, and these merchants need specialized accounts to process card transactions. This guide will give you the top providers, explain what makes a business high risk, and outline exactly what your application should contain to secure approval.
What Constitutes a High-Risk Merchant
Payment processors categorize merchants as high risk based on several factors. A business owner might find their company labeled high risk because of their industry, transaction patterns, or financial history. It’s not necessarily because they’ve done anything wrong.
Industry Classification
Certain industries automatically receive high risk classifications regardless of their business practices.
- Adult entertainment
- Online gambling
- CBD and vape shops
- Nutraceuticals
- Travel services
- Furniture and electronics stores
- Subscription services
- Multi-level marketing
- Debt collection
- E-commerce businesses
Payment gateways and credit card networks maintain specific lists of high-risk industries that face higher rates of chargebacks or regulatory scrutiny.
Transaction Characteristics
High transaction volumes, especially those involving large dollar amounts, are a potential fraud risks to payment processors.
Businesses that accept international payments outside the United States, Canada, Japan, Australia, or Europe automatically trigger high risk designations.
Poor credit history, personal or business, also elevates your risk level, particularly for startups without established processing records.
Chargeback Ratios and Financial Factors
Merchants with chargeback ratios exceeding 1% (0.5% for Visa) face immediate red flags during underwriting reviews.
Payment processors examine your credit history, business credit score, and past merchant processing statements to assess stability. New merchants without transaction history often receive high risk classifications simply because payment processors lack data to evaluate their operations.
Top 5 High-Risk Merchant Account Providers
The best high risk merchant account providers offer services that address the challenges high risk businesses face. These payment processors understand your industry, provide better fraud protection, and maintain flexible terms that support sustainable growth.
1. DirectPayNet
DirectPayNet specializes in high-risk merchant accounts for e-commerce businesses and provides comprehensive merchant services tailored to challenging industries.
We also offer offshore high-risk merchant accounts that help business owners expand internationally while processing multiple currencies. We works with merchants who have been shut down by domestic providers or struggle with high chargeback ratios, offering solutions that include negotiable rates as your processing history improves.
We emphasize a transparent fee structures and help merchants understand their options for accepting credit card and debit card payments. Our expertise extends to nutraceuticals, casinos, dropshipping, coaching, CBD, and MOTO businesses.
Our customer support team is available to guide business owners through complex payment processing decisions and account setup.
2. PaymentCloud
PaymentCloud maintains a strong reputation among high-risk merchant account providers by focusing exclusively on businesses that face approval challenges.
The company works with merchants on the MATCH list and provides customized solutions based on specific industry needs. Their experience spans multiple high-risk sectors, making them valuable partners for business owners seeking reliable payment gateways.
3. PayKings
PayKings specializes in helping merchants manage and reduce their chargeback ratio, which is critical for long-term account stability.
The provider accepts businesses even when they appear on the MATCH list and dedicates resources to finding appropriate banking partners for each client’s circumstances.
4. Durango Merchant Services
Durango Merchant Services provides fast approval for high-risk merchant accounts and offers expertise in guiding merchants through complex application processes.
The company understands that high risk merchant accounts aren’t one-size-fits-all contracts and customizes solutions based on individual business factors. Durango helps business owners understand requirements and options while prioritizing approval paths that work for their specific situations.
5. Swipesum
Swipesum operates as a payment consulting firm rather than a traditional merchant account bank.
They connect merchants with the right payment processors through a broker-like model that is especially valuable for high risk businesses. When one processor offers tough terms or denies approval, Swipesum leverages their network to find alternative solutions.
Their platform provides access to multiple payment processors, allowing merchants to compare options and route to processors that best suit their industry and transaction volume.
CONNECT WITH A PROCESSOR THAT SUPPORTS YOU
Key Features of High-Risk Merchant Accounts
High risk merchant accounts provide features that standard accounts often lack. Business owners gain access to payment processing that accommodates their risk profiles while protecting revenue and maintaining customer relationships.
Enhanced Fraud Protection
High risk accounts include advanced security features designed to detect suspicious activity and reduce chargebacks.
Payment gateways utilize tokenization, which substitutes sensitive credit card information with unique identifiers that become useless if intercepted. Data encryption protects customer information during card transactions, while real time monitoring systems identify fraudulent patterns before they escalate.
Address Verification Services (AVS), Card Verification Value (CVV) checks, and two-factor authentication like 3DS add layers of security that confirm transaction legitimacy.
Geolocation and device tracking align customer locations with historical purchase patterns, triggering alerts when inconsistencies appear.
These fraud protection measures help business owners maintain lower chargeback ratios and protect their merchant service relationships.
International Payment Support
Many high-risk merchant account providers set up their systems for international transactions, offering multicurrency support and tools that facilitate cross-border sales.
This allows business owners to expand their customer base globally while accepting payments in local currencies. Payment processors that understand international regulations help merchants navigate compliance requirements across different jurisdictions.
Chargeback Management Tools
High risk payment gateways provide alerts when chargebacks initiate, allowing businesses to engage customers promptly and potentially resolve disputes directly.
Representation services help business owners build cases to contest unjust chargebacks, enhancing favorable outcome chances. Strong chargeback management protects merchant accounts from closure while maintaining acceptable risk levels.
High Risk Account Costs
Payment processors charge higher fees for high-risk merchant accounts to offset increased risk and administrative expenses. Business owners should expect higher costs compared to traditional low-risk accounts, but transparent pricing helps manage these expenses effectively.
Fee Structures
Monthly subscription fees for high-risk accounts typically range from $5 to $45, while per-transaction fees usually amount to 1.95% to 2.4% of total sales.
Setup costs, processing fees, and various other charges appear higher than standard merchant accounts. Payment processors justify these fees based on the additional resources required to monitor high risk transactions and manage increased chargeback exposure.
With the right merchant service provider, you can negotiate these fees.
Rolling Reserve Requirements
Many high-risk merchant account providers impose rolling reserves that hold back 5% to 15% of monthly revenue for six to twelve months as security against potential chargebacks.
This practice protects payment processors from sudden financial losses but can strain business cash flow, particularly for newer companies.
Payment Processing Timelines
High risk accounts often feature slower payout schedules than standard merchant processing accounts. Settlements may take up to three business days, making cash flow management more challenging. Business owners should factor these delays into their financial planning to maintain operational stability.
Strategies for Maintaining Your High-Risk Account
Business owners who actively manage their accounts reduce the risk of sudden terminations and improve their chances of negotiating better terms over time.
Monitor Chargeback Ratios
Keep your chargeback ratio low by implementing strong fraud prevention tactics and maintaining clear communication with customers. Address disputes quickly before they escalate to formal chargebacks, and use the alert systems your payment gateway provides.
Document your responses to disputed transactions and maintain records that support your position during chargeback representation.
Maintain Accurate Records
Keep detailed records of all card transactions, customer communications, and shipping confirmations. These documents are invaluable when contesting chargebacks or responding to payment processor inquiries.
Accurate record-keeping also helps during periodic account reviews that payment processors conduct on high-risk merchants.
Build Processing History
Establish a positive track record by processing transactions consistently without major incidents. As you demonstrate security and profitability, negotiate with your payment processor for reduced fees or improved terms.