If you try setting up a merchant account for an otherwise lucrative business you might, like many UK businesses have found you are categorised with others as high risk businesses.
When it comes to payment processors you many have been refused accounts due to the nature of the business, or the way the product or service is carried out; or offered higher rates.
There is an alternative, there are merchant services providers who have an appetite for your business at competitive rates Don’t waste your time, though, completing applications with typical acquiring banks that will simply decline your application, provide bad rates or impose too tough limitations and delayed payments.
You will need payment services providers who know your business and the type of high risk account you require.
The high risk business community can be a vibrant place, with high staking risks but high rewards for those that succeed.
If the specific merchant account security requirements are fulfilled then high transaction volumes can be transacted efficiently and cost effectively.
High Risk Merchants
What businesses are considered more of a risk? There are accounts for high risk businesses, industries and transactions
High Risk Industries – high risk markets in which it is very easy to commit fraud or other crime
High Risk Transactions – any transaction with a high chance of chargebacks is high risk. This can include anything from ecommerce sales of certain products to high turnover high value B2B sales
Business Sectors that may Require a High-risk Merchant Account
Cryptocurrency and Bitcoin
When it comes to high risk merchant accounts, businesses that deal in cryptocurrency are usually included. For this reason, many high risk merchant account providers will charge high fees for the types of transactions involved with trading cryptocurrency, or they may even deny a business a high risk merchant account altogether.
Peer to Peer lending
Peer to peer lending is high risk for merchant services providers that will offer high rates as compensation for the risk, but those rates may be variable depending on which provider you choose. The best high-risk merchant providers will work with you and find a solution that best suits your business needs.
Forex trading is high risk for the payments industry providers as it involves trading of large sums or investments. The merchant account provider will charge high rates to businesses to make up for the high risk that they are taking.
Alcohol Related Businesses
Alcohol related businesses don’t necessarily require high risk merchant services but they do require a lot of checks and are often refused or charged higher rates by the payment processor.
Tobacco products are high risk for merchant services providers because there is a high chance of chargebacks. Tobacco products are often bought with a credit card, and if the buyer decides they don’t want the product, they can request a chargeback from their credit card company. This increases the risk that the merchant account provider will lose money on the transaction.
Nutraceuticals and dietary supplements are high risk for merchant services providers because there is a high chance of chargebacks. Many people use credit cards to purchase these items, and if the buyer decides they don’t want the item, they may request a chargeback from their credit card company.
This increases the risk that the merchant account provider will lose money on the transaction.
Airlines, Travel and Tourism
There are a few reasons why airlines, travel, and tourism companies require high risk merchant accounts. First of all, high risk account providers will charge high rates because there is a high chance that the customer will request a chargeback.
Processing high value international transactions can also cause a business to be considered for a high risk merchant account. There is a high chance that there will be a lot of fraud and chargebacks. This high risk is why high risk providers charge high rates for these types of transactions.
- Adult Entertainment
- Advertising Services
- Affiliate Marketing
- Airline, Travel and Tourism
- Alcohol Related
- Cryptocurrency and Bitcoin
- Dating & Escort Services
- Debt Management and Collection Agency
- E-cigarettes and CBD
- Events and Ticketing
- Foreign Exchange
- Monthly Membership
- Online Auctions
- Payday Loans Company
- Peer to Peer lending
- Private Club
- Software Company
- Stamps & Coins Trading
- Subscription Services
- Tech Support
- Timeshares & Holiday Clubs
- Tobacco Products
High Risk Merchant Account Providers for High Risk Businesses
There are many high risk merchant account providers available for businesses desiring high risk merchant accounts. These businesses specialize in dealing with high-risk merchants and can help you find an affordable solution for your business needs.
A high risk merchant account is often required for high risk industries where there is high chance of chargebacks from card payments and other payment types. High risk merchant account providers are businesses that specialize in high risk merchants and transactions, so they are your best bet when looking to set up high-risk merchant accounts for your business.
Firstly, there is a high risk of chargebacks with these types of businesses.
Another risk of using a merchant account is fraud. Fraud occurs when someone uses a stolen credit card or fake credit card information to make purchases.
Businesses can protect themselves from fraud by using fraud prevention tools, such as fraud detection software and manual reviews of transactions.
Debt Management & Collection Agency
Debt collection agencies are high risk for merchant accounts because of the high volume of chargebacks. Fraud is also a high risk for this type of business which makes it high risk to the merchant account provider.
E-cig and CDB Sales
E-cigarette, vape shops and CBD sales are considered a risk to a future payment partner. This increased risk is due to the high volume of chargebacks when merchant accept card payments for their products which often result in increased chargeback fees.
High Risk Merchant Account
If you’re taking payments in some business sectors, your account may be high risk because you sell products that have a high risk of returns or refunds or successful chargebacks by customers.
These transactions might include services that could have a higher vulnerability to fraud or customers being unable to pay.
These high risk products could include: gambling (online and/or offline), adult entertainment, and seemingly ordinary products such as jewellery and furniture and many other examples considered high risk merchant activity.If high risk merchant accounts are not available for high risk business then high risk merchant account providers may require you to pay higher fees and wait a longer settlement period.
High risk merchants also have high chargeback rates, which can be costly when combined with high fees.
High-risk businesses are sometimes refused high risk merchant account services by traditional payment processors due to the high fraud or chargeback risks involved in their transactions.
To protect itself from this financial liability, a high-risk merchant services provider will usually charge higher transaction fees in order to optimize revenue collected upon successful sales.
Businesses selling goods that have a higher potential for return or refunds, such as technology products and electronic equipment, gym memberships or debt collection agency services may need high-risk merchant accounts because high-risk merchant account providers want to reduce their high rates and fees.
High Risk Merchant Account Providers
There are many providers that offer high-risk merchant accounts with different fee structures, including: World Pay, First Data, Authorize.Net and Payment Express just to name a few.
For companies deemed high risk there are a number of options that will allow you to accept card payments by setting up a merchant account.
Accepting payments through your website is one of the best options available to high-risk merchants. High-risk businesses can set up an ecommerce website that uses SSL (secure socket layer) technology to secure credit card info.
High risk online merchants can also process payments through high-risk merchant accounts using high-risk payment gateways (also high risk)
Some of the best high risk payment processors offer high volume business accounts. High-risk merchant services providers may not require a high minimum monthly transaction volume, but they will probably charge more for individual transactions than traditional merchant account providers.
High risk business types that will require high risk merchant accounts are high demand businesses that sell high volume high priced items or high volume or high-ticket/high value services.