Businesses need to have payment solutions that specialise in high-risk merchants. This is because businesses that operate in the digital world are deemed high-risk for financial, regulatory, or reputational reasons. To assist you in making the best choice of merchant service provider for your company, we have curated this guide to help you explore the top high risk merchant account providers and assess their features, costs, and offerings. When a business or industry is deemed to carry a higher risk than other categories of enterprises, banks or merchant services providers may designate it as a “high-risk” merchant account. This classification is based on several variables, some of which may be ownership or business-related problems.
If you are a high-risk business and you are looking for the best merchant account service provider, this blog is for you.
Why is a Company Labeled as a High-Risk Account?
A business may be classified as high-risk for several reasons, some of which are indicated by the illustration below. We will be going over each of them one by one in-depth, starting with the business’s niche, history, financial situation, and e-commerce challenges.
TYPE OF INDUSTRY: As fraud and chargeback rates are higher in some businesses than others, business sectors such as telemarketing, adult entertainment, internet gaming, travel services, etc, are thought to be intrinsically riskier for sure.
BUSINESS HISTORY: A company may be classified as high-risk if it has a history of numerous chargebacks, which occur when customers contest a payment and have it refunded to them. A high chargeback rate may be a sign that there is an issue with the good or service being offered. This, sometimes, leads to the degraded market reputation of the business.
FINANCIAL STABILITY: A company may be deemed high-risk if its finances are unstable because of their bad credit. The reason for this is that merchant service providers and banks want to make sure that a company has the resources to pay for refunds and chargebacks.
E-COMMERCE: Due to the higher risk of fraud and chargebacks, companies that operate solely online and in emerging industries are sometimes seen as high-risk. This is particularly true for companies who sell overseas, as fraud risk increases even further.
Businesses in these categories require high-risk merchant accounts, as standard merchant accounts would not approve them. High-risk merchant accounts give businesses the chance to accept credit cards and run efficiently, even though they frequently have stricter conditions and higher fees to offset the greater risk.
Do I Need a High Risk Merchant Account?
Every high-risk industry needs a payment processor that can meet their needs. If your company operates in one of the high-risk industries listed below, you must have a high risk merchant account.
- Wine, Tobacco, and Vitamins
- iGaming Dating Websites Add-ons
- CBD Items
- Travel Agencies with Telemarketing
- Multi-Level Marketing for Adult Entertainment: Gambling and Betting Subscription-Based Enterprise
As was previously indicated, banks view this industry as high-risk. They therefore offer to open a merchant account with a significant risk.
Low-Risk vs High-Risk Merchant Account
A merchant might be considered low-risk to a payment processor based on a few common factors. Usually, low-risk retailers have –
- A single currency
- Sectors classified as low-risk
- Transactions under $500 on average
- Low chargebacks and a small proportion of returns
- Minimal monthly transaction volume (less than $20,000)
- Activities in one low-risk nation (the United States, Canada, Japan, Australia, and the European countries)
Remember that when your firm grows, your risk status might grow with that. For example – your business can be considered high-risk if you experience rapid business growth. A payment processor can view an expansion into new markets or a change in business sectors as a change in risk. If this occurs, your high risk merchant account providers will have to find a new supplier to handle your payments because they do not support high-risk merchants, in addition to modifying your status or terminating your account.
Best High-Risk Merchants Accounts Service Providers
A payment processor is a type of service that helps customers and merchants conduct online transactions. Because certain businesses have a larger risk than others, processors of high-risk payment accounts evaluate and manage elevated risks, carry out extensive due diligence, put improved security measures in place, and negotiate unique terms. The top suppliers of high risk merchant processing solutions are listed below, and we’ve assessed their features, costs, and compatibility.
For Large High Risk Businesses: Square
Square is one of the best options for high-risk businesses. This payment processor focuses on working with companies in markets including adult entertainment, online gambling, and CBD. They provide affordable prices, swift approval processes, and various methods for processing merchant payments. They are great for high-risk businesses, and they only service businesses with a chargeback of less than 1%. If any business goes above 1%, they tend to shut them down. Hence, they are the best high risk credit card processing option for you based on credit score.
FEATURES
- It is easy to set up
- Clear pricing without any additional costs
- Quick approval procedure and simple account creation
- Dedicated account managers to provide tailored assistance
- Availability of many payment gateways and interfaces with shopping carts
- Allows contactless payments through Apple Pay, Google Pay, Cash App Pay, and Tap to Pay
COMPATIBILITY
Square in the United States is mainly used by wineries, breweries, and distilleries, in addition to flower and gift industries and government sectors. Also, restaurants that are huge in size and operation use Square POS. Moreover, adult merchants can also benefit from Square.
PRICING
- No additional fees for disputes or chargebacks
- For online transactions, it charges 9%+0.30 cents
- For manual transactions, it charges – 5%+0.15 cents
- It charges 6%+0.10 cents per in-person transaction
Best for Highest-Risk Businesses: Durango Merchant Services
Durango merchant services is one of the first merchant service companies, that focuses on high-risk clientele. It is among the more accommodating high-risk merchant account providers, particularly in terms of assisting small companies with poor credit in obtaining payment processing solutions. It is an excellent choice for internet businesses due to its in-house developed Durango Cart shopping cart technology and the integrated load-balancing capability of the Durango Pay payment gateway. Durango Merchant Services serves companies on the MATCH list as well as offshore and foreign enterprises. Hence, it is one of the best payment processing options.
FEATURES
- Payment methods include e-checks, ACH, cryptocurrencies, and all major credit card and debit cards.
- Payment methods include online payments via Durango Cart, mobile payments via the iProcess app, point-of-sale payments, and integration with site builders or e-commerce platforms via the Durango Pay payment gateway.
- It includes verification by Visa, Mastercard SecureCode, Fraud Scrubbing, and EMV 3d Secure 2.0.
COMPATIBILITY
Durango is only one of many high-risk merchant service providers accepted by most industries and business sectors. Some of the industries using Durango are advertising, mail or phone order companies, multi-level marketers, membership businesses, horoscope and fortune-telling services, telemarketing or telecommunications companies, high-ticket companies, pawnshops, and more.
PRICING
- $25 is the chargeback cost
- There is no early termination cost
- Fees for authorization: 15–25 cents
- Needs for rolling reserves: 0%–10%
- $30 per month (including payment gateway)
- Payment gateway: each transaction costs 10 cents
- E-commerce/MOTO transaction fees: Interchange + 0.25%
Best for International Merchants: SMB Global
Payline Data is a well-known and trustworthy low-risk processor, and SMB Global is one of their merchant service provider partners. SMB Global only works with multinationals and specialises in high-risk merchant accounts. It provides:
- Two well-liked payment gateway alternatives.
- Chargeback avoidance capabilities, such as an auto-response function to combat chargebacks swiftly.
- Each interfaces with over 175 online shopping carts.
There aren’t many user reviews for SMB Global, but those that do exist claim to be highly qualified for a month-to-month contract that offers limitless processing volume and no rolling reserve limits. It’s interesting to note that top-ranked PaymentCloud is a partner of SMB Global and Payline Data.
FEATURES
- Payment methods include ACH, e-check processing, and all major credit cards and debit cards.
- Payment options include Verifone-equipped POS machines, Authorize.net and NMI payment gateways for online and mobile purchases.
- Like most other high-risk merchant accounts, it sends your application out to numerous processing partners in search of the best rates and contract terms.
- SMB Global offers more expansive underwriting standards and higher processing volume caps to help high-risk companies apply for offshore merchant accounts.
- The analytics platform has a tool that automatically responds to chargebacks so that they may be contested promptly and adequately. It also displays your chargeback counts and ratios in real time and forecasts your month-end results in advance.
COMPATIBILITY
SMB Global collaborates with a vast array of goods, sectors, and services. It is important to note that SMB deals with a wide range of unusual product sales, such as those of automobile parts, electronics, weight-loss plans, guns, vitamins, and collectables.
PRICING
No price was made available to the public. For high-risk merchant accounts, standard terms range from month-to-month to three years, with early termination fines of up to $500.
Best for U.S.-Based Businesses: Soar Payments
This is a trusted high risk adult merchant service provider. High-risk merchant services company Soar Payments serves a range of companies and sectors. Of all the options on our list, it provides the most direct interfaces with e-commerce, accounting, and customer relationship management (CRM) platforms. One of Soar Payments’ unique selling points is that, unlike highly regarded competitors, it provides 24-hour approval and rapid online quotes. But take note that the underwriting procedure is still in place and can take up to five business days.
FEATURES
- ACH, e-checks, and all major credit and debit cards are accepted forms of payment.
- The transfer of money to your bank account via Soar Payments takes 48–72 hours to complete.
- Complete online application, 24-hour approval turnaround, plus an extra three to five working days for underwriting.
- Chargeback protection includes fraud detection, chargeback representation, alert emails, and more, thanks to a partnership with Chargeback.com.
- Payment options include POS transactions as well as online and mobile payments made with USAePay, Authorize.Net, and the NMI gateway.
COMPATIBLE INDUSTRIES
More than 50 high-risk company categories are served by Soar Payments, including individuals with poor credit, cannabis support, CBD products, credit monitoring and repair, fantasy sports, guns, multi-level marketing, pawnbrokers, nutraceuticals, survivalist enterprises, and travel.
PRICING
- Monthly average fee: $19–$45
- Setup and application fees: $0
- Transaction fee: For mid-risk merchants, transaction costs start at 2.49%.
- Interchange-plus and tiered pricing
- Early termination fees: depending on the merchant’s standing, $200–$395; for other merchant accounts, none.
- Fee for chargeback: $25–$30
- Typical rolling reserve: 5%–10%
- Duration of Contract: 2-3 Years
a Review by eMerchant AuthorityWe are dedicated to providing you with objective rankings and information while maintaining complete editorial independence. All of our material is informed by-product data, strategic methodology, and expert insights, which help you make the best decisions for your business journey.
To assist you in identifying the top four high-risk merchant account providers, we conducted a thorough methodology analysis of multiple merchant account providers. In addition to real customer reviews on external websites, our assessments also took into account having a transparent price structure, providing contactless payments and invoicing, and whether or not sophisticated services like offshore merchant processing and chargeback monitoring were accessible. Through our thorough research, we ensure you get the right high risk merchant processing for your business.
What Should You Consider When Choosing a High-Risk Payment Processor?
Here are a few factors to be considered before you get the high risk merchant account service…
- Pricing: Make sure the provider’s schedule of charges fits your company’s requirements by assessing setup, transaction, and monthly rates.
- Payment Gateway Compatibility: Verify if the supplier is compatible with the shopping cart integrations and payment gateways that are necessary for your company’s operations.
- Fraud Protection and Chargeback Management: To reduce a wide range of high risks and safeguard your company, pick a provider that provides robust fraud protection tools and chargeback management services.
- Customer Service: Select a service provider with a robust customer service department that provides prompt phone, email, or live chat support.
- Industry Expertise: Choose a supplier who has worked with companies in your particular sector and has a thorough awareness of the particular difficulties you face and the laws that apply to you.
How We Evaluate High-risk Merchant Account Providers?
Prices for high-risk merchant accounts vary since underwriting banks collaborate with them, and they will assist you in completing an application to compare prices. Therefore, comparing service providers according to costs or transparency won’t yield the greatest results.
Rather, we examined each provider’s general pricing policies as well as their unique features for main providers along with high risk merchant account providers for tech support also, such as chargeback prevention, protection tools, and load balancing. Additionally, we gave priority to processors that help merchants be placed regardless of their background or type of business. Lastly, we took into account user evaluations, customer service hours, deposit timeframes, and typical payment features.
Solving Your Doubts on High-Risk Merchant Account Providers
What is a high risk business for merchant account providers?
If your industry is regarded as high-risk, it’s helpful to know ahead of time so you can make appropriate plans, & below are some types of high-risk businesses that require providers that specialize in high-risk merchant accounts.
- Debt retrieval
- Playing Poker
- Online dating
- Online shopping
- Multi Level Marketing
- Adult-oriented business
- Electronics and furniture stores
- Vape shops, cannabidiol (CBD), and e-cigarettes
- Travel—including planes, ships, and tour operators
- Services for subscriptions and businesses that accept recurring payments
Why should high-risk businesses not use Magstripe or other manual-entry payments?
Accepting manual entry payments entails a higher risk of fraud and chargeback claims in addition to increased transaction costs. To prevent their merchant account from being terminated by the financial institution, high-risk merchants must keep their chargeback percentage low under the guidance of a high risk merchant account service provider
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How much does a high-risk merchant account cost?
Generally, high-risk business owners can expect a credit card processing fee of 0.5%-1% higher than any low-risk business, which can range anywhere between 3.49%-3.95% plus $0.20 per transaction.
How do you identify high-risk transactions?
High-risk payments consist of online payments, over the phone, and through email, which means in any case where the card is not present. This is because it is easier for a person with malicious intent to steal a credit card and make some transactions.
How do I get a high-risk merchant account?
If you want a high-risk merchant account, you can look for vendors who specialize in industries such as gambling, MLM, CBD and vapes, the adult industry, airlines, cruises, vacation planners, online dating, etc. You can contact the vendor offshore high risk merchant account providers or potential customers directly using their email or fill in the physical application. However, there are several factors they consider before approving the account.