A high-risk merchant account is a type of payment processing account that is designed for businesses that are considered to be high risk by payment processors. These businesses may have a higher chargeback rate, a higher risk of fraud, or operate in a legally regulated industry. As a result, they may be difficult to get approved for a traditional merchant account.
High-risk merchant account providers
There are a number of high-risk merchant account providers that specialize in working with businesses that have been classified as high risk. These providers typically have higher fees than traditional merchant account providers, but they may be able to offer more flexible underwriting guidelines.
Types of high-risk businesses
Some of the types of businesses that are typically considered to be high risk include:
Adult entertainment businesses
Dating and escort services
E-cigarette and tobacco retailers
Gambling and betting websites
Online pharmacies
Travel and ticketing agencies
Benefits of a high-risk merchant account
There are a number of benefits to having a high-risk merchant account, including:
The ability to accept credit and debit cards
Access to fraud protection and chargeback mitigation services
The ability to process payments online, by phone, and in person
The ability to grow your business without the fear of having your account terminated
How to get a high-risk merchant account
If you think your business may be considered high risk, you can get a high-risk merchant account by following these steps:
Shop around for a provider. There are a number of high-risk merchant account providers, so it is important to shop around and compare rates and fees.
Gather your documentation. You will need to provide the provider with a number of documents, including your business license, tax returns, and bank statements.
Be prepared to answer questions. The provider will want to ask you a number of questions about your business, including your chargeback history and fraud prevention measures.
Be patient. The underwriting process for a high-risk merchant account can take several weeks.
Additional tips
Here are a few additional tips for getting a high-risk merchant account:
Be transparent with the provider. The more information you can provide the provider, the better your chances of approval.
Be prepared to pay higher fees. High-risk merchant accounts typically have higher fees than traditional merchant accounts.
Have a solid business plan. The provider will want to see that you have a viable business model.
Be prepared to accept credit card payments. This is the most common payment method for high-risk businesses.
Have a strong fraud prevention plan. This will help to reduce your chargeback rate and make you more attractive to providers.