How to Choose the Best High-Risk Merchant Account

How to Choose the Best High-Risk Merchant Account

As a business owner in a high-risk industry, accepting credit card payments is crucial to your company’s success. However, securing a merchant account through a traditional bank can be challenging due to the nature of your business. A high-risk merchant account is specifically designed for businesses that experience a higher rate of chargebacks, returns, or fraud. With the right high-risk credit card processor, you can provide your customers the convenience of paying with credit cards while avoiding the frustrations of a standard merchant account.

What Are High-Risk Merchant Accounts and Why Do You Need Them?

As an e-commerce business owner, you may find yourself categorized as “high risk” by credit card processors and merchant account providers due to the nature of your products or services. To accept credit card payments, you’ll need to obtain a high-risk merchant account.

A high-risk merchant account is a type of payment processing solution offered by a credit card processor or merchant account provider to businesses considered risky or prone to a higher percentage of chargebacks and fraud. Due to the increased financial risk, high-risk merchant accounts typically come with additional fees like a rolling reserve, chargeback fees, and fraud prevention tools.

To select the best high-risk merchant account for your needs, consider the following factors:

  • Fees and rates: Compare overall costs including percentage rates, fixed fees, chargeback and reserve fees between providers. Look for affordable and transparent pricing.
  • Risk mitigation tools: Fraud prevention tools like Address Verification Service (AVS), card verification value (CVV), and 3D Secure help reduce chargeback risk. Choose a provider with robust risk management tools.
  • Rolling reserve: A percentage of your sales is held in reserve for a period of time to cover potential chargebacks. Look for a reasonable rolling reserve requirement, e.g. 10-15% held for 6-12 months.
  • Application process: The application process for high-risk accounts can take weeks or months. Choose a provider with an efficient application and underwriting process to avoid long wait times.
  • Customer service: Look for a provider with 24/7 customer support to help resolve any issues quickly. High-risk accounts often require additional support.

By evaluating the factors that matter most to your business, you can find a high-risk merchant account provider that offers the payment processing solution and risk mitigation tools you need to accept credit card payments securely and affordably.

How to Evaluate High-Risk Credit Card Processors

To find a reputable high-risk merchant account provider, you need to carefully evaluate your options. Consider the following factors:

  • Experience and expertise: Look for a processor with at least 5-10 years of experience handling high-risk merchant accounts. They should have expertise in your specific industry and be able to advise you on underwriting requirements.
  • Competitive rates: High-risk processors typically charge higher rates due to the increased risk, but fees can still vary significantly between providers. Compare rates like discount rates, chargeback fees, and monthly minimums. Look for a processor with reasonable and transparent rates.
  • Quality customer service: You need a processor that provides high-quality support to help resolve any issues quickly. Look for 24/7 phone and email support, limited hold times, and representatives that understand your business needs
  • Compliance and security: Your processor should have a solid compliance and security program to ensure your customers’ sensitive data is protected. They should be fully PCI-compliant and use advanced security systems. Ask about their data security protocols and how often systems are tested.
  • Terms and conditions: Carefully review the terms and conditions to understand associated risks, liabilities, and responsibilities. Look for a contract with a reasonable length and fair cancelation policy in case you need to terminate the agreement.

By evaluating these key factors, you can determine which high-risk merchant account providers meet your business needs. Taking the time to choose the right processor will help set your company up for success. With the proper account and support, you can confidently accept payments from your customers.

Questions to Ask When Choosing a High-Risk Merchant Account Provider

When evaluating high-risk merchant account providers, there are several important questions you should ask to determine the best option for your business:

  • Fees and Rates: What are the rates and fees for different card types like Visa, Mastercard and American Express? High-risk accounts typically pay higher rates, so compare providers to get the most competitive offer. Are there any additional fees like chargeback, retrieval request or statement fees? Make sure you understand all potential fees upfront.
  • Underwriting Criteria: What types of businesses do they consider “high risk” and do they specialize in your industry? Look for a provider with experience underwriting accounts in your sector. How long does the approval process take? More complex applications can take weeks to review, so choose a provider with an efficient underwriting team.
  • Risk Monitoring: What tools do they provide to monitor fraud and chargebacks? Effective risk monitoring systems can help reduce losses from fraudulent transactions. Do they offer additional risk management services? Some providers offer extra services like address verification, CVV checks and IP geolocation to minimize risk exposure.
  • Customer Support: Do they offer 24/7 customer service and support? As a high-risk business, access to emergency support is essential in case of any issues processing payments or service disruptions. How quickly do they resolve disputes and chargebacks? Fast resolution times can help limit potential losses, so look for a provider that prioritizes quick response times and actionable solutions.

Choosing the best high risk merchant account provider is crucial for any business operating in a high-risk sector. Doing thorough research, comparing multiple options and asking the right questions will help ensure you find a provider equipped to meet the unique needs of your high-risk business.


As you have seen, finding the right high-risk merchant account provider requires diligent research and evaluation of your business needs. Do not rush into a contract with the first provider you find. Compare rates, fees, and services across multiple providers to determine which offer will benefit your business the most. Look for transparent pricing, strong security and fraud protection, and a provider with experience in your industry. The extra effort will pay off by saving you money and headaches down the road. With the right high-risk merchant account partner, your business can thrive and reach its full potential.

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