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The In’s and Outs of High Risk Merchant Accounts

A high risk merchant account is a specialized merchant account that a business owner must apply for if their business industry is considered “high risk”.

What Factors Make a Small Business High Risk?

Many of our SecureGlobalPay small business owners are surprised to learn that their small business is considered “high risk.” What can be even more confusing to a small business owner is that one merchant account provider may consider your business high risk while another would NOT consider your small business high risk.

So what factors make your small business high risk? It really depends on the underwriting guidelines that your merchant account provider uses to approve a merchant account. Some merchants follow strict guidelines while others may not be quite so strict.

However, perhaps the biggest consideration of high risk is determined by the processing history of others within your same industry. If your industry has a proven history of high chargebacks and fraudulent purchases, you will most likely be considered high risk.

For example:

If you have a lot of offshore business processing.

If you sell items that are questionable or bordering on being illegal.

If your sales tactics are not straightforward.

Those are just a few reasons why your account may be considered high risk.

How Does a High Risk Merchant Account Get Approved?

Once it has been determined that your business is high risk there are a number of factors that can determine whether you can be approved for a merchant account. Factors will also determine your merchant account fees. As mentioned above the underwriting guidelines each merchant account provider adheres to really determines your ability to be approved for a high risk merchant account.

Other factors will be whether you are a new business or if you have been running your business for a number of years. The best case scenario in being proven for a merchant account would be a proven history of successfully processing credit cards with another merchant account provider.

If you are in a high risk business, the lower your chargeback and fraud prevention risks are, the easier it will be to set up a high risk merchant account.

Why do High Risk Merchant Accounts have higher fees than a regular merchant account?

Oftentimes the reason that high risk merchant accounts have higher fees is due to the direct relation to how much risk a merchant account provider will have to take with your particular business. That is why the fee set up is calculated in a way that will support or directly off-set that risk. For example, a regular merchant account may pay a 1.5% fee vs. a 3.5% fee for a high risk merchant account.

I Have a High Risk Merchant Account. How do I Protect My Rates?

As a high risk merchant account owner, it is important to be diligent with your account. It is important to set up processes that promote great customer service. Clearly define the results your product can produce to reduce the amount of chargebacks. Other factors that can make it difficult to get approval for a high risk merchant account would be having numerous declines on one charge. If a cardholder’s credit card fails, then let the cardholder know instead of running it through your merchant account repeatedly. Do not charge the same card repeatedly over and over. If you need to make multiple charges on one card, then process the order wait a few minutes and process again.

If your merchant account processing is seasonal, be sure to let your merchant account provider know when to expect an increase in credit card traffic so it doesn’t look as if you are processing fraudulently.

Do not use your high risk merchant account to process a variety of unrelated businesses transactions. For example, if you are a hair salon, you should not be processing credit cards for automotive store. Your merchant account provider will ask what and document your chosen business industry. Be sure all charges are related to that industry.

Take the time to review your contract and understand all of the processing fees. Some fees can occur simply by how you collect credit card information. Interchange fees can quickly add up each month, so make sure that you send in all the required information with each credit card transaction.

Who Should I Pick?

Many of our small business owners try to use a regular merchant account provider to set up their high risk merchant account. This can lead to a long and frustrating process without reassurance that you are getting the best rates for your high risk merchant account. That is why it is important to find a merchant account provider who specializes in high risk merchant accounts. SecureGlobalPay specializes in high risk merchant accounts.

How We Can SecureGlobalPay Help?

Some high risk businesses include:

Adult Related eCommerce

Male Enhancement

Air Charters


Bail Bonds

Muscle Enhancement

Check Cashing



Online CBD

Collections Agencies

Online eCigarettes and Vape

Credit Repair/Restoration*

Online Firearms and Ammo

Dating Websites

Online Liquor/Wine

Debt Relief/Consolidation

Online Tobacco

Direct Marketing/MLM

Payday Loans (including Tribal)

Document Preparation

Short Term Loans




Student Loan Assistance

Gentlemen’s Clubs

Tech Support/Remote IT*

Home Improvement

Teeth Whitener

How To Businesses



Title Loans

Legal Advising

Travel Packages/Tour Operators

Magazine Subscriptions


Mail Order/Telephone Order

Web Development

Penny Auctions

*expect a reserve

 What to Do?

If your application is denied because your business is considered high risk, talk to a SecureGlobalPay customer representative to see if they can place you with an alternate banking and processing relationship. SecureGlobalPay has relationships with many banks and processors, some of which have an appetite for businesses who qualify for a higher risk merchant category. They uniquely specialize in high risk business types.

Learn more about our High Risk Merchant Account

Other Articles About High Risk Merchant Accounts

PCI Compliance Guide
How the Address Verification System (AVS) Works
What is a High Volume Merchant Account
How to Find the Best Point of Sale System for your Business

High Risk Credit Card Processing