12 Facts about high-risk merchant accounts

high-risk merchant accounts

High-risk accounts are used by what banks consider unsafe businesses as a payment processing service. A business can be regarded as risky if they have a long history of fraudulent activity, a bad credit rating, a high rate of chargebacks, and financial instability.

As a result of being considered high-risk, these businesses must pay much higher fees processing than usual and be subjected to a much greater level of investigation when attempting to obtain specific services due to the risk factors mentioned earlier.

Some merchant banks out there have rolling assets in place (an amount of money to cover possible chargebacks) for the account of a high-risk business. This is especially true if the business has a verifiable history of chargebacks and refunds. These types of accounts are known as high risk merchant accounts.

Facts about High-Risk merchant accounts

Operating a high-risk business seems to be difficult and also comes with numerous limitations. But it may prove beneficial for some people as well. The following are a few key features of having a high-risk merchant account.

1. High chargeback protection

High chargeback protection means you have a greater chance of keeping your merchant account in good shape. For instance, when a merchant has a routine history of chargebacks and keeps crossing the threshold of chargebacks, they may even end up with a terminated account. It becomes easier to maintain a high-risk merchant account in running and good condition with a high-risk processor. But, it doesn’t mean that you may continuously ignore multiple chargebacks.

2. Global coverage

When you are a high-risk merchant, there are chances for you to develop your business operations across the world by accepting different currencies from various countries that are regarded as low-risk. This global coverage may help you grow your business at a broader range. Access to the world market means a high exposure. It is quite the contrary in low-risk merchant accounts having several limitations and limited to domestic purposes only.

3. Expansion of business

A high-risk merchant account may help an individual sell various goods and services, which may not be identical to those with a low-risk merchant account. This account may give you opportunities to sell your goods and earn more money. You can have several options for long-term growth.

4. Customization and Flexibility

Another aspect of a high-risk merchant account is having more flexibility in payment choices over other merchant accounts. Low-risk merchant accounts will not be able to have such flexible payments. At the same time, high-risk merchants can process recurring payments and a greater variety of goods and services. In a few words, a high-risk merchant may process more payments and also have a higher monthly volume of payments.

5. Reduction of processing delays

Besides these benefits, you can also have easier access to your funds with fewer roadblocks and lower processing times. It may help you claim the money with minimal stress and as fast as possible.

6. Lower risk of account termination

The bank may terminate an account if a low-risk merchant experiences chargebacks. This situation is unlikely in high-risk merchant accounts as both individuals are informed of its possibility well in advance. Therefore a few chargebacks won’t lead to the termination of their accounts.

7. Absent volume caps

The manager of a high-risk merchant account does not have to worry about a particular target volume per month, which means they can efficiently transact as they want. It enables a merchant to transact any sum of money from one place to another at any point in time. This scenario is quite the opposite in the case of low-risk merchant accounts, as they come with a monthly target volume.

8. A higher level of fraud protection and security

All merchant account providers have a certain level of fraud protection and security in their place. Additionally, high-risk payment processors presume a more significant percentage of fraud in the transactions they process and thus support more robust security actions. This extended level of monitoring preserves the payment processor, the cardholder, and the merchant, thus allowing the clients to shop with increased peace of mind.

9. Merchant underwriting procedure

If you wish to accept payments from customers, you will require a payment processor and merchant account. But, to get one, you must first go through the merchant underwriting procedure. This process helps decrease the chance of errors on both the payment processor’s and the merchant’s sides. High-risk merchant accounts are given special attention, although all companies go through the same screening procedure. This solution analyses if the merchant can satisfy professional and financial obligations to remain afloat with their business. The ability to manage refunds and chargebacks is one of the essential aspects of this procedure.

10. Merchant account reserve

If your business model is estimated to require a high-risk merchant account, finding a financial institution willing to deal with you is not easy. Therefore, acquiring institutions or banks will ask for a specific deposit to act as a security deposit. This layer of protection for the bank limits any possible chargebacks and other unexpected occurrences. It is necessary to have a merchant account reserve to ensure that the processor will always be paid, even if the merchant encounters difficulties.

11. Higher fees

Whether you like it or not, you are likely to pay more if your business is associated with a higher risk. A merchant account provider will charge more fees when compared to usual merchant accounts. A high-risk account allows the processing of most credit card types which is a great advantage for an online business, mainly focused on a worldwide market. Even though you will pay higher fees, you will enjoy one of the most incredible benefits of a high-risk merchant account, i.e., the processing of credit cards.

12. Higher expenses for set-up and benefit

On account of a high-risk business, you could also bring about an increased month-to-month charge, set up costs, and prepare expenses. Running an organization that has some proficiency in high-risk businesses will further boost your good fortune and come top of the line in the businesses.


High-risk merchant accounts may be helpful depending on your business or transaction types. A high-risk merchant account may help you grow as quickly as you wish, but the only thing you need is an investment of a higher amount to open this account. You will need a company that explicitly trades high-risk merchant account services and can set you up. You may get fast bank confirmation and simple online credit card processing with the relevant processing partner if you have a high-risk merchant account. The only key is to accurately choose when deciding high-risk credit card processing partners and merchant service providers.


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