Get The Best High-Risk Merchant Account In High-Risk Industry

Get The Best High-Risk
Merchant Account In High-

Risk Industry

If your business lies in the “high-risk” category, you may struggle to
find a reliable high-risk merchant account. But who confirms that a
business comes in the high-risk category? And what parameters
confirm the risk? In this blog, we’ll help you to understand all this and
many more things. So, you can find the right payment processor for
your business requirements.

What is a High-risk Merchant Account?
Businesses that are labeled as high-risk will require a high-risk
merchant account to receive debit/credit card payments. A high-risk
business has a high ratio of chargebacks or frauds and some other
characteristics.
But there is no central authority in the payments industry that
analyzes the risk parameters associated with a business. Whereas,
every bank and high-risk payment processor has its parameters.
Some payment processors mention upfront that they don’t cater to
some industries. Others will hardly observe detailed information
about a business to a certain risk, and their application may be

rejected or accepted based on this risk. Ultimately, it all depends on a
payment processor’s internal parameters and perception of risk
management.
Parameters that label a business high-risk
Businesses from some industries that carry higher risks may be
labeled as high-risk businesses. There are some examples of high-risk
industries:

• CBD oil, e-cigarettes, and vapes
• Credit repair
• Multilevel Marketing (MLM)
• Adult products/services
• Pawnshops
• Supplements and nutraceuticals
• Tech support
• Travel Agencies
• Online Gaming
• Tobacco Businesses
• Forex trading
• Collection Agencies, etc.

On the other hand, many other parameters can label a business as
high-risk.

• Some payment processors can consider you high-risk if you have
newly entered and never processed payments before.

• If you have poor credit records or a low credit score, your risk
perception may increase.

• If your business has controversial products or runs your business
on a slippery legal track.

• Businesses that are providing international sales may also have
high-risk classification.

• Industries that have regulations by government or legislation are
also labeled high-risk.

• If your business offers card-not-present payments, you will need
a high-risk merchant account.

How does a High-risk Merchant Account Differ from a
Regular Account?
Labeled as a high-risk business can reflect to be quite daunting. A
payment processor may easily reject your application. However,
a high-risk payment processor may choose to offset your inherent
business risk by forcing some measures.

These are the primary factors that differentiate between a
high-risk merchant account and a regular merchant
account.

1. Longer application process. If you are applying for a high-risk
merchant account, then a payment processor may ask for detailed
information to observe your risk profile or study past flows of your
financial terms. Usually, payment service provider companies will
check your business’s processing history, your personal credit
history, and your partnerships.

2. Higher payment processing fees. For small businesses,
payment processing fees may be 0.3% above the interchange rates.
But for a high-risk merchant account, this could go up to 1.5% with
an interchange rate. However, interchange fees may vary
according to the company, and higher risk will have a higher fee.

• Cash reserve requirements. Some payment processors may
hedge a certain amount of cash for a business. They may manage
the thresholds of this reserve in several ways.

• Rolling Reserve. A high-risk payment processor keeps aside a
part of every transaction you will process. It can be as higher as
10%.

• Upfront Reserve. A high-risk payment processor receives a part
of the amount from the merchant upfront. Sometimes, the
processor may hold all transactions until the merchant pays the
purchased amount.

• Higher chargeback fees. When a business requires to process
refunds, they must also pay chargeback fees to their payment
processor. For businesses that have a high chargeback ratio, this
fee may be higher to offset the risks of excessive chargebacks.
Whereas, these rates may come anywhere between $20 to $100
each.

• Volume caps on the transaction. Some payment processors
may stop you from processing more transactions if your sales
volume exceeds a specific limit. Processors assume that risks may
be higher when dealing with high volumes.

How to get a high-risk merchant account provider?
As a high-risk merchant, you may not be able to find the pricing
structure details for a high-risk merchant account on a payment
processor’s website or other similar platforms. Rather than that, you
will need to fix meetings or private consultations with their members
to put your case at priority.

You can start by noting down some high-risk payment processors that
cater services to your industry. Some popular ones specialize in high-
risk merchant accounts.

When you have some options in your hand, you must look at what
everyone brings to the table. You can choose based on the following
things:

• How much experience do they have working with businesses in
your respective industry?

• How long it will take to allow you to accept payment?
• Do they have a reserve requirement?
• Along with credit and debit cards, do they support eChecks and

ACH payments?
• Will they charge an early termination fee if you switch to another

provider in the future?
• What types of equipment do they provide (like POS machines,

virtual terminals, etc.)?
• How accessible and robust is their customer service?
How to apply for a high-risk merchant account?
To accept online payments you will need to find a reliable high-risk
payment processor. Yet, the process to apply for a high-risk merchant
account is short and easy. You will have to fill out an application form.
For example, if you choose HighRisk Gateways as your payment
partner. They will help you to find a bank that is suitable for your
business requirements. When your business gets approved by the
acquiring bank, you can start accepting online payments.
You must be ready with these documents before applying for a high-
risk merchant account:

• Incorporation certificate
• Shareholder’s certificates
• Copy of your passport
• Address proof with a utility bill
• Bank statements of last three months
• Processing history of recent six months (total number of

transactions, chargeback percentage)
• The license number with the name of the organization that issued

the license
Does HighRisk Gateways Serve High-risk Businesses?
High-risk merchants have a limited number of payment providers
they can work with and HighRisk Gateways are one of them. For
example, if you have an adult toys business, an online casino business,
HighRisk Gateways will be able to serve your business with a high-risk
merchant account.

The primary benefit of partnering up with HighRisk Gateways is that a
merchant will have to follow an underwriting process before getting a
merchant account. This procedure labels risk factors initially and
saves your precious time and costs. We’ll let you know if we can’t
provide you with the payment service and even suggest to you some
ways to modify your business and you can re-apply and get the best
solution.

Wrap Up

As it is clear from the above discussion that some businesses have
inherent risk factors. Also, the definition of high-risk varies from one
payment processor to the next. Moreover, there are some high-risk
payment processors whose entry point is easy but merchants have to
face the risk of being cut off at any time. By choosing a payment
service provider like HighRisk Gateways, you can get relaxed that
there would not be any unfavorable surprises for you later on. Contact
us today for a better consultation so that we can analyze your
business’s risk factors and provide you with the best solutions
Source: Get The Best High-Risk Merchant Account In High-
Risk Industry