What You Need to Know about a High Risk Merchant Account

One of the first things that a new business needs when it’s getting started is a payment processor. It can feel overwhelming because there are so many options to choose from, and it can be challenging to know what you need.

Starting a business? Download "The merchant services survival handbook" to  learn how to process payments.

What can make it even more challenging is if you’re only offered a high risk merchant account because your business has been assessed as high risk. Don’t worry if this has happened to you, many businesses are assessed as high risk. You’ll still be able to secure a payment processor who can provide you with all of the services you need to help your business succeed.

Who Is Considered a High Risk Merchant?

High risk merchants are companies that have been deemed risky for payment processing companies to get involved with because there’s a larger chance these merchants won’t be able to pay back their debts. High risk may also be assessed based on reputation risk.

Usually a high risk merchant is a business that has few ties to a specific geographical location, and processes transactions involving large sums of money. They’re also companies that can be easily susceptible to fraud.

For example, an airline is considered a high risk merchant because someone can buy an airline ticket with a credit card that isn’t theirs and board a fight before the airline or the credit card company catches the illegal act. The airline company is thus out that flight money and is presented with a chargeback.

Some other industries that are considered high risk are casinos, dating and gaming sites, and medical marijuana businesses. These are just some examples; the list of businesses that can constitute a high risk merchant is a long one.

Higher Fees

The major difference between a low and high risk account are the fees that a payment processor will charge. The fees on a high risk merchant account are oftentimes higher because the payment processor wants to be able to recoup some of its loss should a high risk merchant go bankrupt or not be able to pay chargebacks or other kinds of debt. However, there are many payment processing companies that work specifically with high risk merchants, and those companies are able to provide deals and services where both sides benefit.

You want to work with a payment processor that doesn’t shy away from your business or drown you in fees because they’re afraid of what might happen. Working with a payment processor that specializes in high risk merchant accounts ensures this doesn’t happen and that you have the specific support you need.

Additional Security Measures

Security of funds for any business is paramount, but for a high risk merchant, it’s even more so. Payment processors have security measures put into place for all of their clients to ensure the protection of their accounts and funds. However, with high risk merchant accounts, many payment processors will offer additional security measures and protections.

Additional security measures and protections are one of the benefits of working with a payment processor that specializes in high risk merchant services. They understand exactly what you need and are able to provide you with a great service so you feel comfortable knowing your funds are safe in their hands.

If you’ve been assessed as a high risk merchant, there’s no need to worry. Many different industries are deemed high risk. One of the best things you can do is look for a payment processor that specializes in high risk merchant accounts. Your business will be safe in the hands of people who understand what they’re doing, can give you additional security, and who can ensure that both of you benefit from the partnership.



Text Size

Matt Moore

As the President and Co-Founder of BNA Smart Payment Systems, Matt is responsible for the company’s strategic direction, daily operations, and growth. Entrepreneurial by nature, he brings a wealth of sales and marketing experience earned from over 36 years in business. He has developed, implemented, and directed international sales and marketing strategies, established strategic alliances with international companies, and demonstrated leadership in the electronic payments market. Prior to BNA, Matthew served at the senior levels of major EFT/POS companies, helping them increase sales and optimize customer service. Matt is also a father of three, a fitness enthusiast who does power lifting and CrossFit, and he enjoys weekends at the cottage.

Find Matt Moore on:

Subscribe to our blog