High Risk Merchant Processing

Merchant accounts are required in order for a business to accept credit card payments. As a merchant, there are two places you can obtain a merchant account; a bank, or a third party provider. For online merchants the most popular, and in most cases cost effective, source is from a third party merchant account provider.

A high risk merchant account is required by businesses that, when compared to a 'traditional' goods/services business, are at a higher risk of:

Bankruptcy
Fraudulent Transactions
High volume of sales
High rate of refunds
High rate of charge-backs
Other reasons a merchant may be categorized as a high risk are:

Merchants Location - Some merchant account providers will not accept merchants from certain countries.
The Product/Service the merchant sells is illegal in some jurisdictions.
Merchant Credit History - Some providers will not accept merchants with poor or no credit history.
Due to the high risk classification, most banks will not provide a merchant account to those in a high risk industry (such as adult entertainment, replica goods, pharmacy etc). As such some third party providers offer their services to both general merchants and blog - go now - high risk merchants.

Merchant account providers that have been developed to service high risk merchants will generally provide a higher level of fraud protection, so as to decrease the cost their merchants incur. In order to cover the higher level of risk, rates for a high risk merchant account will always be higher than their lower risk counter-parts.

When looking for a high risk merchant account, there are a number of factors that you should take into account. Rates will be one of the most important factors, and this includes fees for refunds and charge-backs, along with transaction fees, the discount rate and ongoing fees. You will need to think about fraud protection, customer service and reporting available to you as a merchant.


As a merchant, there are two places you can obtain a merchant account; a bank, or a third party provider. For online merchants the most popular, and in most cases cost effective, source is from a third party merchant account provider.

When looking for a high risk merchant account, there are a number of factors that you should take into account.