What Are High Risk Merchant Accounts?

Businesses who accept debit or credit payments have to open a merchant account—but unfortunately, that’s easier said than done. Many traditional merchant services providers don’t want to deal with high risk industries. That can include online lenders, online gaming, and offshore companies.

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Frustrated Trying To Get A Merchant Account?

As a business owner, the process of being denied by one merchant account provider after another is not just frustrating but potentially crippling to your success. Customers expect the ability to make payments with a credit or debit card. For e-commerce companies, this is the only way for you to make any transactions. Without a merchant account, you might as well close shop.

eMerchant Authority specializes in servicing industries and companies that are considered high risk. They understand the way your business works and have adjusted their criteria for approval. They are willing to accept the liability, and become your partner in processing your online transactions.

Industries We Work With

What Makes an Industry “High Risk”?

 High Risk of Chargebacks

Merchant account providers like Paypal, Chase, and Wells Fargo have flagged certain industries as high risk because of the possibility that customers will try to dispute the charges and ask for a chargeback. They will call their card company and claim that they never authorized the payment. The merchant account will then have to refund the money. Even if you are a reputable and stable company, with a good history of collecting payments on time, your customer profiles place you in the category of “high risk.”

 High Risk of Fraud

This includes any industry that has a high incidence of identity theft, credit card fraud, money laundering or other criminal activity. Offshore companies are often flagged for this.

 Highly Regulated Industries

Some companies will refuse to open merchant accounts for any company involved in the adult industry, or sells CBD oils, firearms, and e-cigarettes.

 Recurring Bill Payments

Many companies use a continuity or recurring billing model: post-paid phone services, streaming services, memberships. While this is part of any subscription service, there are more cases of customers complaining that they are being charged without signing up (usually because of the end of a free trial) or that they have already cancelled their subscription.

 Credit and Payment History

Another “high risk” factor is your company or your personal credit score, or the number of chargebacks that you have had in the past. If your business or industry has any of these factors, while you can apply for a merchant account with them, you will go through a longer approval process, need to submit more documents, and will frequently be turned down at the end of the wait.

What Is High Risk Merchant Account

Why High-Risk Merchant Account Instant Approval Is a Myth

All businesses want instant clearance for key business services, which is why getting instant approval for your high-risk merchant account may sound like a good thing.

However, a payment processor that promises an instant approval high-risk merchant account isn’t genuine.

Let’s look at why it’s not possible to get a high-risk merchant account instant approval.

Is It Possible to Get Instant Approval for Your High-Risk Account?

While it’s possible to get an instant approval for a low-risk merchant account, approval for high-risk accounts takes longer.

High-risk merchant accounts approval often takes a minimum of three to five days, and some can take even longer.

The reason, high-risk merchant account approval compromises a two-step process. First, you must get approved by your merchant services provider. Then, you must get approved by your acquiring financial institution or the processor who will process your credit and debit card payments.

The whole of this approval process takes more than a day.

Besides, since bad credit is one of the factors that may make your business to be considered high risk, high-risk businesses require an extensive investigation.

Thus, your payment processor and the bank will require you to provide more documentation and the application and underwriting process may take longer due to the credit checks.

So, be wary of merchant account services providers who promise high-risk instant merchant accounts approval. Some other warning signs that can tell you that such providers are out to defraud you include:

  • A long-term contract that has an expensive early termination fee
  • Hidden processing fees
  • Allowing you to start credit card processing before the merchant account approval process is complete

Can You Get Instant Approval For A Merchant Account?

Merchant Account Instant Approval

While high-risk merchant accounts are willing to accept liability, they will still go through due process. Do not trust or believe any company that says that they will give merchant accounts instant approval, because that usually means that they are not being transparent about their application process.

At eMerchant Authority we do have same day approvals, for certain industries.

Use our quick application form to see if you can get a same day approval.

Five tips To Get Your Merchant Account Approved

So what is the secret to getting approved for a high risk merchant account?


First of all, try to explain the nature of your business or company well. Write a cover letter that highlights your business’ strengths, such as your sales record, the quality of your product or service, your competitive advantage. This shows that your business is stable, successful and is professionally run. That lowers the possibility of chargebacks, and the risk of fraud.


Also mention any proactive steps you are taking against credit card fraud and high chargebacks. This can include any security systems on your site, customer service and customer protection, or even the communication strategies you have that keep customers informed about future payments or total fees.


You have an advantage if your business has been open for a long time, but if you are a startup you can mention any investor funding. This will assure them that there is no risk of your company shutting down and discontinuing services.


Show the amount of sales and transactions you get, and how money flows both into your business and out of it (suppliers, employees, etc). Not only does the trade volume affirm that you are a successful company, but it minimizes the risk. If they do receive a few chargebacks here and there, it is a small percentage of the amount of successful payments that are made each month.


Lastly, prove your fulfilment duration: how long it takes for you to deliver a product or service after your customer makes a payment. Most chargebacks are caused by customers who had to cancel a purchase because delivery took too long, or they never received the promised item. A short fulfilment duration significantly lowers your merchant account risk.

How Do I Avoid Chargeback Claims?

As you may have noticed from this article, chargebacks are a big factor in getting merchant account approval. But they also hurt your business—and your company’s credit history. If your business accepts the majority (if not all) of your payments online, how can you avoid excessive chargebacks or deal with them when they occur?

Have protocols or systems in place for dealing with customer complaints. Do not let it reach the point where a customer cancels a sale—active customer service is key.

These protocols should also include handling obviously fraudulent complaints: customers who are misusing the system to avoid payment. One advantage of going to a high risk merchant providers is that they will actually allow you to dispute chargebacks, especially if you deal with customers who are at a higher risk for failed payments.

Be proactive about protecting your company and your customers from credit card fraud and identity theft. This can help strengthen any disputes you have against claims that a customer’s card was used without their authorization.

While these steps may mean that you invest more time and money in customer service or your site security, it will lower your risk for chargeback claims.



Manage Chargebacks

 Remember, the more cases you have of chargebacks, the more difficult it will be to open or maintain a merchant account. Even if your application is approved, if your provider notices that you have a lot of chargeback claims every month, it can suspend your account. While it can be reopened after investigation, in that period you will not be able to accept any online payments. That hurts your sales, stalls your operations, and may even infuriate your existing customers. They will blame you for having an unreliable payment system—even if it is not your fault—and may choose to take their business elsewhere.

How Do I Manage Chargeback Claims?

Merchant Account Credit Check

Yes, some industries can be at higher risk for chargebacks and fraudulent transactions. But just as you, a business owner, understands and accepts those risks, there are merchant providers who are equally experienced in handling these types of situations.

We at eMerchant Authority are working with many companies that are high risk. We help them prepare to deal with issues like unwarranted chargebacks or dishonest customers.

Unlike banks, which tend to take the side of the customer (mainly because the commissions they receive in chargebacks), eMErchant Authority will actually help YOU resolve the issue in a fair way. We will also set up top-of-the-line security, to prevent any identity theft or leaks of customer information. That lowers your risk of fraud, and your ratio of chargebacks.

The best high-risk merchant providers, like eMerchant Authority, provide reliable processing solutions, which are absolutely critical for online payments and for your continuous business operations. We have worked with different business models and various types of transactions, and have more extensive experience in your particular industry than a traditional bank or merchant account provider.


Use our fast application to get a custom tailored merchant account that fits your needs.


eMerchant Authority prides itself in being a leader when it comes to the provision of merchant account solutions. We provide merchant account services for both low and high-risk businesses.
Our services are secure and reliable.

Besides, we understand just how financially difficult it is to become a business owner. This is why when you partner with us you also enjoy transparent pricing with no long-term contracts or hidden fees.
Whether you’re a startup or an established business, you can count on us to provide you with a perfect merchant service solution with the latest hardware and software tools such as Clover systems that are perfect for your retail payment needs.

And because customer satisfaction is what we aim for, we offer ongoing support to all our customers. Our 24/7 customer support team is always on call to answer your questions and attend to your needs.
Still interested?

Here are other additional benefits that you receive when you apply for an internet merchant account with eMerchant Authority.

Merchant Processing

Merchant Account Experts

20+ Proven Bank Relationships
Medium/High-Risk Accounts
Fast Merchant Account Approval
E-Commerce & Retail Options
B2B Vendors Supported

Multiple Payment Processing

Multiple Payment Solutions

Multiple E-Commerce Gateways
Chargeback Prevention
ACH, E-Check, Credit Cards
B2B Level 2/3 Data Discounts
3D Secure Frictionless Checkout
Mobile Payments
EMV Readers

Merchant Processing Technology

Intuitive Technology & Support

Gateway Recurring Billing
E-Commerce Cart Plugins
International Merchant Accounts
Dedicated Account Managers