Best merchant account for the high-risk industry in 2022

If your industry is only considered “high-risk,” you may have trouble finding a reputable high-risk merchant account. But who determines whether or not a company is high-risk? And what factors support the risk? 

This article will assist you in comprehending all of this and much more. As a result, you can choose the best payment platform for your company’s needs.

What is the meaning of a high-risk merchant account?

High-risk establishments will need a high-risk merchant account. To accept debit/credit card transactions. A high-risk firm has a high chargeback or fraud ratio, and several other features.

However, in the payments industry, there seems to be no central authority. Therefore it’s difficult to assess a company’s risk characteristics. Every bank and high-risk payment provider, on the other hand, has its own set of rules.

Certain payment services expressly state that they do not serve certain industries. Others will pay little attention to specific details about a company’s issue. Post that their proposal may be either denied or accepted as a result of this risk. It ultimately boils down to this: 

  • A payment processor’s structural parameters and 
  • Risk management perspective.

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A set of criteria that classifies a company as high-risk

High-risk businesses are those that operate in industries with a high level of risk. High-risk industries include the following:

  • CBD oil, e-cigarettes, and vapes are all options.
  • Credit repair. 
  • MLM stands for multi-level marketing (MLM).
  • Adult-oriented goods and services.
  • Pawnshops.
  • Nutraceuticals and supplements
  • Help with technology.
  • Travel agencies are businesses that help people plan trips.    
  • Online gaming
  • Businesses that deal with tobacco.
  • Trading on the foreign exchange market.
  • Collection Agencies, etc.

Several other factors, on the other hand, can classify a company as high-risk.

  • If you’ve recently joined and never processed payments, certain payment services may deem you high-risk.
  • Your perception of risk may rise if you have a bad credit history or a weak credit score.
  • If your company sells contentious products or operates on a shaky legal footing.
  • Industries that provide overseas sales may also be purely classified as high-risk.
  • High-risk industries are those that are subject to government controls or legislation.
  • A high-risk merchant account in order if your firm accepts card-not-present payments.

What’s the Difference Between a Regular and a High-Risk Merchant Account?

Being labeled as a high-risk company might be intimidating. Your application could be easily rejected by a payment processor. A high-risk payment processor, on the other hand, may choose to impose some restrictions. So to mitigate your business’s element of risk.

These are the major characteristics that distinguish a high-risk merchant account from a standard merchant account.

A prolonged application process

If you’re looking for a high-risk merchant account, a payment processor may request specific information. To assess your risk profile or examine previous financial transactions. Payment service providers will typically look at your company’s:

  • Transaction history, 
  • Your credit history, and 
  • Your alliances.

Fees for processing payments are higher. 

Payment service fees for small firms were maybe 0.3% higher than exchange rates. With an interchange rate, this might go up to 1.5% for a high-risk merchant account. Interchange fees, on the other hand, may vary per company, with a higher risk of incurring a higher fee.

Requirements for cash reserves.  

Certain payment gateways may help a company buffer a particular amount of funds. They have a few options for managing the reserve’s boundaries.

Rolling Reserve

Every transaction you complete is set aside by a high-risk payment service. It might be as much as 10%.

Reserve a spot in the front row. 

A high-risk payment service collects a portion of the transaction fee upfront from the merchant. The processor might indeed put a hold on all transactions till the merchant pays the full purchase price.

Chargeback fees are increasing. 

Chargeback fees must be directly paid to a payment service when a company needs to handle reimbursements. This fee may be greater for organisations with a high chargeback percentage to balance the risk of extensive chargebacks. These prices, on the other hand, could range from $20 to $100 per person.

The transaction has a volume cap. 

If your sales volume surpasses a certain threshold, certain payment services may prevent you from processing additional transactions. Processors presume that while dealing with large volumes, the dangers are greater.

What is the best way to find a high-risk merchant account service?

You may not be able to extract pricing structure specifics for a high-risk merchant account. Moreover on a payment system’s website or other comparable platforms if you are a high-risk merchant. Instead, you’ll need to schedule appointments or private meetings with their members. So that you can make your issue a priority.

To begin, make a list of high-risk payment processors that provide solutions to your industry. Some of the most well-known ones focus on high-risk merchant accounts.

When you have a few choices, you must consider what each person contributes to the table. You can make your decision built on the following factors:

  • What kind of expertise do they have in dealing with businesses?
  • How long will it take for you to be able to receive payment?
  • Is there any kind of reserve requirement?
  • Do they accept eChecks and ACH payments in addition to credit and debit cards?
  • If you move to some other operator in the future, would they impose an early termination fee?
  • What kinds of equipment do they offer (such as point-of-sale machines, virtual terminals, and so on)?
  • What is their customer support like? Is it responsive and reliable?

What is the procedure for obtaining a high-risk merchant account?

You’ll need to find a reputable high-risk payment processor to take online payments. However, obtaining a high-risk merchant account is a simple and quick process. The process begins by filling out an application.

If you chose Paypound Gateways as your payment provider, for example. They will assist you in locating a bank that is appropriate for your company’s needs. You can begin collecting online payments once your firm has the authority from the acquiring bank.

Before registering for a high-risk merchant account, you must have the following documentation on hand:

  • Certificate of incorporation.
  • Certificates of stockholders.
  • Passport copies will be required.
  • You can need a utility bill to verify your address.
  • Bank statements over the previous three months.
  • Recent six-month operation record (total number of transactions, chargeback percentage).
  • The license number, as well as the name of the organisation that issued it.

Is Paypound Gateways a Good Fit for High-Risk Companies?

Paypound Gateways is one of a few handfuls of payment providers that high-risk merchants can partner with. Paypound Gateways, for instance, will be capable of providing you with a high-risk merchant account if you own an adult toy store or an online casino.

The main advantage of working with Paypound Gateways is that a merchant must go through an authorization procedure. That too before getting approval for a merchant account. This technique identifies danger factors at the outset, saving you time and money. If we can’t supply you with the payment platform, we’ll let you know. We will even propose some methods to improve your business so you may resubmit and receive the best option.


As the preceding section has shown, certain firms have risk-involved characteristics. Furthermore, each payment processor’s classification of high-risk varies. Furthermore, some high-risk payment services provide a simple sign-up process. But merchants must bear the consequences of being ripped off at any time.

You may rest assured that if you use a payment provider like PayPound Gateways, there will be no unpleasant surprises in the future. Please contact us immediately for a more in-depth discussion. So that we can assess your company’s risk factors and recommend the best options.

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