A High-Risk Merchant Account at Highriskpay.com is designed for businesses in industries with elevated risk factors. It provides secure payment processing solutions tailored to businesses that face challenges with traditional banks. Highriskpay.com ensures reliable transactions with specialized services, helping companies to thrive despite their high-risk status.
Highriskpay.com offers specialized merchant accounts tailored for businesses with unique challenges. Need a solution for your high-risk business? Secure payments, lower risks, and grow your business confidently with their expert services.
What Is a High-risk Merchant Account?
Businesses that are characterized as “high-risk” will need a high-risk merchant account to accept debit and credit card payments. A high-risk business has a greater likelihood of chargebacks or fraud (and certain other characteristics as well).
However, there is no central authority or framework in the payments industry that determines the risk factors associated with a business. Instead, every bank and every payment processor has its own set of standards.
Some payment solution providers may state upfront that they don’t serve certain industries. Others will typically seek detailed information about a business to ascertain risk, depending on whether their application is accepted or rejected. Ultimately, it all boils down to a payment processor’s internal criteria and outlook toward risk management.
What Factors Determine If a Merchant Is High-risk?
Businesses from certain industries that innately carry higher risks may be automatically flagged as high-risk businesses. Here are a few examples of high-risk industries:
- CBD (Cannabidiol), e-cigarettes, and vape
- Stun guns and tasers
- Credit repair
- Multilevel Marketing (MLM)
- Adult products/services
- Pawnshops
- Supplements and nutraceuticals
- Tech support
- Search Engine Optimization (SEO) services
Besides this, there are many other factors that could result in labeling a business as “high-risk”:
- Some processors could label you as “high-risk” if you are a new entrant and have never processed payments before.
- Poor credit records or low credit scores for defaulting on loans, etc., are other significant factors. If a processor has previously put you on the MATCH list, that could increase your risk perception as well.
- The same goes for businesses that have controversial product lines or operate on a slippery legal slope.
- Businesses that are overly dependent on international sales may also have high-risk scores. This is because of the relatively unpredictable economic dynamics abroad.
- Industries that are highly regulated by legislation or governments are also labeled “high-risk.”
How Do High-risk Accounts Differ from Regular Accounts for Payment Processors?
Being labeled as a high-risk business can seem to be quite daunting. A processor may simply decline your application. Alternatively, however, a payment processor might choose to offset your inherent business risk by enforcing some measures.
There are several ways in which a payment processing company may mitigate its risk. These are also the prime differentiators between high-risk and regular merchant accounts.
Longer application process
If you’re applying for a high-risk merchant account, a merchant services provider may ask for very detailed information to analyze your risk profile or study past patterns of your finances. Typically payment processing companies will check your business’ processing history, partnerships, and even your personal credit history (to watch out for bad credit, etc.).
Higher payment processing fees
For standard small businesses, payment processing fees may be 0.3% above the rate of interchange. However, for a high-risk merchant account, this could go up to 1.5% plus the interchange rate. While interchange fees may vary from company to company, in general, higher risk will incur higher fees.
Cash reserve requirements
Some payment solution providers might even hedge a certain amount of cash for a business. They may maintain the thresholds of this reserve in a number of ways:
- Rolling reserve. A high-risk payment processor sets aside a proportion of every transaction that you process (which you’ll receive later). This could be as high as 10%. For instance, if you have a six-month rolling agreement, you receive the balance from January in July.
- Capped reserve. The processor holds a certain proportion of each transaction until the cash reserve reaches a predetermined level. At this point, the per-transaction contributions will stop but the reserve will remain.
- Upfront reserve. A high-risk payment processor receives a set amount from the merchant upfront. Sometimes, the processor may even withhold all transactions until the merchant pays the said amount.
Higher chargeback fees
When businesses need to process refunds, they must also pay chargeback fees to their payment processor. For businesses that have a high chargeback ratio, these charges may be higher to offset risks of excessive chargebacks. These rates may vary anywhere between $20 to $100 each. Businesses with high chargeback ratios such as clothing brands could therefore feel the heat.
Volume caps in credit card processing
Some credit card processors may simply bar you from processing any more transactions if your sales volume exceeds a certain limit. Processors presume that risks may be compounded when dealing with high volumes.
Additional requirements
Depending upon the type of business, some processors may have other requirements when providing services to high-risk merchants. If you sell age-restricted goods, the processor may ask you to use tools that ensure you aren’t selling to underage customers. They may not approve your processing account till you fulfill all the criteria.
What to Do If You’re a High-risk Business and Need a Payment Processor
If you are a high-risk merchant, what’s the best way to go about your search for a payment processor? Here are a few simple things you should keep in mind:
- Maintain healthy cash levels. Most processors would like to see a healthy cash level in your business bank account. This conveys a picture of financial stability thus lowering the risk perception.
- Try to reduce chargebacks. There could be several factors behind the soaring number of chargebacks in your business. In industries such as eCommerce, this could stem from a mismatch between a product description and the actual product. Or, it could also be due to prolonged delivery times. Whatever the reasons may be, you can always analyze them and try to reduce your chargebacks.
- Be transparent. Disclose all materials and relevant information during the application process. Not doing so could be detrimental to your cause and will only affect your credibility. Unlike low-risk merchants, processors may ask you for very detailed information about your business and finances. Be open, honest, and transparent.
- Keep your documents ready. This could mean having six months of bank statements and a few years of tax returns. That said, each processor has its own set of requirements so make sure to check them.
- Follow the guidelines of your payment processor. When you apply for a high-risk credit card processing solution, besides your business needs, the risk-taking ability of the processor also matters. So, be flexible and see if there are things you can do to reduce your risk by discussing with them and following their recommendations.
How to Find a High-risk Merchant Services Provider
As a high-risk business owner, you may not be able to find standard pricing info for high-risk merchant accounts on a provider’s website or other public platforms. Instead, you might need to arrange meetings or private consultations with their representatives to put forth your case.
Start off by listing down a few payment processors that are likely to cater to your industry. Some popular ones that specialize in high-risk merchant accounts include Durango Merchant Services, Payment Cloud, Payline Data, Host Merchant Services, Soar Payments, etc.
Once you have a few options at hand, you must look at what each one brings to the table. Seek clarifications on the following:
- What kind of experience do they have working with businesses in your industry?
- How long does it take them to deposit payments?
- Do they have a reserve requirement?
- Besides credit and debit cards, do they support eChecks and ACH payments?
- Will they charge an early termination fee in case you switch to another provider in the future?
- What kind of equipment (POS machines, virtual terminals, etc.) will they provide?
- How robust and accessible is their customer support?
Does Stax Cater to High-risk Businesses?
High-risk merchants are going to have a limited number of providers they can work with and Stax may not be one of them. If you’re a CBD merchant, for instance, Stax won’t be able to cater to your business. That said, we see several high-risk businesses come to us to see if we can serve them.
The biggest advantage of signing up with Stax is that a merchant will go through an underwriting process upfront—before they get their merchant account. This process flags risk factors early on and saves you precious time (and costs). We’ll let you know upfront in case we can’t serve you and perhaps even recommend a processor that can serve you better.
However, it’s important to note that there are other providers whose process for flagging risks early on, isn’t as effective. Square, for example, lets merchants process payments right away — in minutes or days. That’s because they don’t go through an underwriting process like that of Stax.
So they may approve a merchant initially, but suddenly flag them as high-risk and close their account or hold their funds. Merchants that might not be aware of this policy could be in for a surprise. Square can cut you off at their discretion at any time.
Exploring the Top 10 High Risk Merchant Account Providers in 2024
In the dynamic world of e-commerce and online transactions, high risk merchants often encounter challenges when it comes to securing reliable payment processing solutions. However, with the emergence of specialized high risk merchant accounts, businesses operating in industries such as Online Gambling, Online Poker, Tobacco Fantasy Sports, Forex, E-cigarettes can find personalized solutions to their unique needs. Below are the top 10 high risk merchant accounts providers in 2024, examining their overview, key features, and suitability for different types of businesses.
1. WebPays
Overview: WebPays continues to lead the pack as the top high risk merchant account provider in 2024. With a strong reputation for reliability and customer service, WebPays offers tailored solutions for high risk businesses across various industries. By acquiring WebPays as your payment partner, you can get multiple benefits for your online business comprising:
Key Features: WebPays provides advanced fraud prevention measures, seamless integration with e-commerce platforms, and 24/7 customer support. Our services include high risk credit card processing, chargeback management, and customizable payment solutions.
Ideal For: Businesses operating in high risk industries such as Online Gambling, Online Poker, Tobacco, Fantasy Sports, Forex, and E-cigarettes require secure and reliable payment processing solutions tailored to their specific needs.
2. SecureMerchant
Overview: SecureMerchant is a reputable high risk merchant account provider known for its focus on security and compliance. They specialize in serving businesses in industries like nutraceuticals, travel, and subscription services.
Key Features: SecureMerchant offers customizable solutions to minimize risk and maximize revenue for high risk merchants. Their services include secure payment processing, fraud prevention tools, and comprehensive chargeback management.
Ideal For: Businesses seeking robust security measures and compliance support, particularly in industries with stringent regulatory requirements such as nutraceuticals and travel.
3. HighRiskPay
Overview: HighRiskPay stands out for its comprehensive suite of services tailored specifically for high risk merchants. They specialize in industries like online gaming, and adult entertainment.
Key Features: HighRiskPay offers flexible payment solutions, including high risk credit card processing, and chargeback management. They prioritize security, reliability, and customer satisfaction.
Ideal For: High-risk businesses looking for customizable payment solutions and expertise in navigating the complexities of payment processing, particularly in industries like online gaming.
4. EMB (eMerchantBroker)
Overview: EMB, or eMerchantBroker, is recognized for its commitment to innovation and customer satisfaction. They serve high risk merchants in industries such as firearms, and e-cigarettes.
Key Features: EMB provides a range of payment solutions, including high risk credit card processing, e-checks, and alternative payment methods. They focus on seamless integration, robust security, and competitive pricing.
Ideal For: Businesses seeking innovative payment solutions and personalized support, particularly in high-risk industries such as firearms, and e-cigarettes.
5. Instabill
Overview: Instabill is a trusted partner for high risk merchants worldwide, with over a decade of experience in the payments industry. They specialize in personalized solutions for businesses in various high-risk industries.
Key Features: Instabill offers secure and reliable payment processing solutions, including high risk credit card processing, offshore merchant accounts, and multi-currency processing. They prioritize customer satisfaction and flexibility.
Ideal For: Businesses looking for well-experienced payment processing solutions tailored to their specific needs, particularly in high-risk industries such as online gaming and e-commerce.
6. PayKings
Overview: PayKings is distinguished by its commitment to transparency, integrity, and customer satisfaction. They specialize in serving high risk merchants in industries such as nutraceuticals, CBD, and subscription services.
Key Features: PayKings offers customizable payment solutions tailored to the specific needs of each merchant. Their services include high risk credit card processing, ACH payments, and chargeback management, backed by advanced technology and dedicated support.
Ideal For: Businesses seeking transparent and reliable payment processing solutions, particularly in industries with complex regulatory requirements such as nutraceuticals and CBD.
7. Soar Payments
Overview: Soar Payments is a trusted name in the high risk merchant account industry, known for its reliability, flexibility, and exceptional customer service. They specialize in serving high risk merchants in industries such as CBD, travel, and online gaming.
Key Features: Soar Payments offers a range of payment solutions, including high risk credit card processing, ACH payments, and chargeback management. They prioritize security, compliance, and seamless integration, empowering high risk merchants to accept credit card payments with confidence.
Ideal For: Businesses looking for flexible and reliable payment processing solutions, particularly in high-risk industries such as CBD, travel, and online gaming.
8. MerchantScout
Overview: MerchantScout is a leading provider of high risk merchant accounts, offering tailored solutions to businesses operating in challenging industries such as adult entertainment, gaming, and e-cigarettes.
Key Features: MerchantScout provides reliable payment processing solutions, including high risk credit card processing, and chargeback management. They focus on security and compliance helping high risk merchants navigate the complexities of payment processing with ease.
Ideal For: Businesses seeking secure and customizable payment solutions, particularly in high-risk industries such as adult entertainment, gaming, and e-cigarettes.
9. HighRisk Solutions
Overview: HighRisk Solutions specializes in providing payment processing solutions to businesses in high-risk industries such as firearms, and online gaming.
Features of high-risk merchant accounts at HighRiskPay.com
Secure payment processing
HighRiskPay.com provides secure transactions through fraud prevention tools, encryption, and regular security audits. This helps protect businesses and their customers from potential financial losses. Advanced technologies such as real-time fraud detection, tokenization, and secure payment gateways are employed to safeguard sensitive information and reduce the risk of fraud.
Flexible payment options
HighRiskPay.com supports various payment methods, including credit cards, debit cards, e-checks, and digital wallets. This flexibility allows businesses to cater to a broader customer base and increase sales. By offering multiple payment options, businesses can enhance customer satisfaction and boost conversion rates. The ability to accept international payments and multiple currencies further expands market reach.
Expert support and resources
High-risk merchants often require specialized support. HighRiskPay.com offers 24/7 customer service, dedicated account managers, and extensive resources to help businesses navigate the challenges unique to high-risk industries. Dedicated account managers provide personalized assistance, ensuring that merchants receive tailored advice and solutions. Educational resources and training materials are also available to help businesses understand compliance requirements and best practices for managing high-risk transactions.
Benefits of using HighRiskPay.com
Approval for high-risk businesses
Traditional banks often reject high-risk businesses. HighRiskPay.com specializes in these accounts, offering tailored solutions and higher approval rates. This specialization means that businesses with high-risk profiles have a better chance of securing a merchant account, enabling them to process payments and grow their operations. The application process is designed to accommodate the unique needs and risks associated with high-risk industries.
Competitive rates
High-risk accounts typically come with higher fees. Businesses should compare these costs with the potential benefits of enhanced security and support. While the fees might be higher than those for standard merchant accounts, HighRiskPay.com aims to provide value through robust security measures, reliable customer support, and customizable solutions. Businesses should carefully evaluate their cost structure and consider the overall value provided by these services.
Customized solutions
Every business has unique needs. HighRiskPay.com provides personalized payment processing solutions, ensuring that each merchant receives services best suited to their operations. Customization can include tailored fraud prevention measures, specific payment gateway integrations, and unique reporting tools that help businesses monitor and manage their transactions effectively. This level of customization ensures that businesses can optimize their payment processing systems to align with their specific operational requirements and risk management strategies.
Considerations and potential drawbacks
Higher processing fees
One of the main drawbacks of high-risk merchant accounts is the higher processing fees. These fees can impact the overall profitability of a business, so it’s important to weigh the benefits against the costs. Businesses must assess whether the additional security and support provided by HighRiskPay.com justify the higher fees. This evaluation should include a thorough analysis of transaction volumes, chargeback rates, and potential financial risks.
Strict compliance requirements
High-risk merchant accounts often come with stringent compliance requirements. Businesses must adhere to these regulations to maintain their accounts and avoid potential penalties. Compliance involves meeting industry standards, such as PCI-DSS (Payment Card Industry Data Security Standard), and adhering to specific regulatory guidelines relevant to their industry. Failure to comply can result in account termination or significant fines, making it essential for businesses to stay informed and proactive in managing their compliance obligations.
Longer approval process
The approval process for high-risk merchant accounts can be more extensive and time-consuming compared to standard accounts. Businesses should be prepared for a potentially longer wait time. The detailed review process is necessary to assess the business’s risk profile, financial health, and compliance readiness. While this can delay the setup of a merchant account, it is a crucial step in ensuring that the business is adequately prepared to manage the risks associated with high-risk payment processing.
