Merchant Account for High Risk Business

Merchant Account for High Risk Business

Chargebacks are one of those problems that can flare up overnight. As in, literally overnight, like you go to bed one evening, and when you wake up you have thirty chargebacks to manage.

What may seem like a minor issue, or a complete non-issue, can be amplified by any number of factors. Maybe you got featured on a blog before you could fix a problem with your refund system. Maybe you were targeted by identity thieves. Whatever the case, you might not see it coming.

Alternately, you might simply not be able to do much about your high rate of chargebacks. If you run an online casino, for instance, high rates of chargebacks pretty much come with the territory. Someone’s always going to be experiencing buyer’s remorse and trying to get their money back. The same goes for industries like adult entertainment and gun sales. There are certain things that you can do, no matter what you’re selling, to try and bring those numbers down. But some businesses are simply more at risk than others, and there isn’t really anything that can be done in order to change that. Covering your own ends is smart, making sure that your refund policy is streamlined and easy to follow will help, but sometimes it’s simply out of your hands.

Merchant Account for High Risk Business

Having a high rate of chargebacks or otherwise being regarded as a high risk merchant is a hassle, but it’s probably not a death sentence for your business. For some it may even represent a positive benchmark. If you have enough chargebacks to be regarded as a high-risk merchant, but you’re still turning a profit, then that means that you’re doing a lot of business. Some businesses may even seek to be classified as high-risk because that comes with certain privileges and freedoms (the main one being you don’t have to worry about being classified as a high-risk merchant anymore).

No matter your industry or why you’re being classified as a high-risk merchant, once you get put on that list, you have to start looking for the best deal that you can get as a high-risk merchant. Some credit card processing services won’t deal with high-risk merchants at all while others will charge outrageous rates to make up for the higher risk they’re taking on. You can hardly blame these companies for wanting to protect their own ends, of course. Chargebacks don’t just affect you, the merchant, they also affect people who do business with you, especially your credit card processing company. Anyone who makes a living through commissions and percentages on your sales is relying on you to keep a clean house and keep chargebacks to a minimum. As we said, that is easier said than done in some fields, and this is why there are processing services that specialize in providing service to businesses that are classified as high risk, whether for their industry, the products they sell, or a history of chargebacks exceeding what you might expect for someone running a business of that type.

When it comes to specialty services like this, it’s often a safe assumption that you have to take what you can get. Long-trip bus tickets cost about the same as an airplane ticket these days, so why would you spend all that extra time on the bus when a plane trip could cover the same distance in a couple hours? Well, it’s because not everyone can take a plane. Maybe they’re afraid of flying, maybe they don’t want to go through the security checkpoint. Whatever the reason, this means that a long-trip bus company runs on a “Take what you can get” model. The service doesn’t have to be more affordable or better than an airplane if it’s your only option.

But, there’s actually a lot of competition in the high risk merchant credit card processing service field. Yes, you’re going to pay a little more than a low-risk merchant would for the same services. But you don’t have to take the first offer someone makes to you. There are a lot of businesses out there looking to help merchants who are classified as high-risk. They compete with one another on price and quality of service just as in many other free markets.

Before settling on any one high risk merchant credit card processor, you should take the time to study each one of your options. A credit card processing company is a partner in your business. If you’re buying some ballpoint pens it makes sense to grab whatever’s cheap. You don’t need to marinate on that decision. But a credit card processor is someone who’s going to be with you for the long haul, so you should be sure to do your research and make the decision that works best for you. Remember that there’s really no such thing as a single “best” in this category. There’s just what works for you. Each business tends to do one or two things better than others, but other things not as well. It’s what’s important for your brand that counts.

So that leaves us with the question: What are you looking for?

Here are some criteria we recommend using to evaluate a credit card processing company for your high-risk business:

Do They Cover Your Business?

Not every high-risk processing service covers every type of high-risk business. Some high-risk businesses come with a certain stigma that a processor might not want to be associated with. Firearms, for instance, might be a touchy subject for some given that guns and ammunition are such a politically contentious issue. The same goes for some areas of adult entertainment, “glassware” or head shops, marijuana dispensaries and so on.

Other business types are fairly universal in that most high-risk processing services will cover them. Air travel, for instance, doesn’t really carry a negative stigma. It isn’t really associated with any criminal or borderline-criminal element, and while we’ve all taken time to complain about our least favorite airlines, their business decisions are generally all above-board, legit and legal. The reason airlines can be a high-risk business is because it’s not uncommon for people who need to cancel a flight to file a chargeback instead of going through the airline’s refund or exchange protocol.

Generally speaking, just about any high-risk merchant credit card processing services is going to cover you if you run, say, an online clothing store or a restaurant or something, and just happen to have a higher-than-average rate of chargebacks. Processing companies will reject certain merchants based on industry type, but if you’re getting turned down based on an extremely, unusually high rate of chargebacks, then you have bigger problems on your hands than trying to find a credit card processing service.

In any event, it’s a good idea to check and see what industries a service will and will not cover. Give them a call or shoot them an email and see if they can meet your needs.


Convenience comes down to a number of factors. Is their software easy to use? Does it get regular updates? Do they offer mobile and wireless devices in order to keep your store up to date? Do they cover physical and online shops, or just one or the other?

Convenience and accessibility are incredibly important for anyone running a business in the 2010’s. If you can’t provide your customers with it, your competitors will. So your payment processor needs to be on the same page on this front.

Additional Services

This will of course vary from one merchant to the next. You might not need anything more than someone who can process credit card purchases for you. Or, you might be looking for a company that can offer not only payment processing but other services like online marketing management, Quickbooks integration and so on.

This might not be a big deal breaker. There are free apps and other services to manage a lot of the additional work that a payment processing company might perform for you. But it is nice to have it all in one place, all accessible through the same service, and with assistance from a team of knowledgeable professionals.


Groups like the Better Business Bureau make it easy to track any company’s reputation, and the same goes for sites like Yelp. Not all payment processing companies are listed on these sites, though. High-risk merchant payment processors in particular are a niche within a niche, so you can’t always expect a whole lot of reviews to be found on these sites.

But a quick Google search of any company you’re considering doing business with should alert you to anything you need to know. Generally you’re not so much looking for positive reviews and testimonials, though that’s always nice, rather, you’re looking for red flags. When people are happy with their payment processor they tend to take it for granted. It’s when a payment processor repeatedly drops the ball that people tend to talk.

Not to say a few bad reviews are definitely a red flag, but you may want to proceed with caution when everything you read about a company is negative.


You’re trusting this company with your whole business, here. If they’re not secure then everyone who does business with you is at risk, and should something go wrong then you’re going to be shouldering a lot of the blame. Look for a processor that is PCI-DSS compliant and PA-DSS compliant. Make sure that they use a platform like mCommerce in order to stay up to date on modern security protocol.

Security and PCI-compliance can be a headache. Half the reason you work with a payment processing service is so that they can worry about it so you don’t have to.

Quality of Service

This is maybe the most important feature of a good payment processor: Quality service.

This is true for a number of reasons. Perhaps the most important of these reasons being that a money problem only gets more expensive the longer it goes unaddressed. If your payment processor does not answer the phones on weekends, holidays or after five in the evening, then you don’t really have anyone to call if you have an issue that you need resolved immediately. So 24/7 service is one of the main things you should be looking for when evaluating a company on the quality of their service.

Have You Found the Right Payment Processing Company?

When it comes to your payment processing company, this isn’t just someone who provides you a service or sells you some equipment, they’re a partner at the very hub of your whole business: The point of sale. If you’re not making money then you’re running a charity, not a business. So this is a pretty important decision. Take your time in making the decision and go with a company you feel you can trust.

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