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High Risk Business Credit Card Processing: A Comprehensive Guide

Do you own a business that falls into a high-risk category? If so, you know that finding a credit card processing solution that works for your company can be complicated.

Traditional banks typically won't offer high-risk merchant accounts, which can leave business owners feeling lost and confused. Don't worry - our team at ModPay Solutions is here to help!

In this comprehensive guide, we'll discuss high-risk business credit card processing in detail. We'll also cover:

  • What makes a business high-risk

  • What types of businesses typically need high-risk merchant accounts

  • What to consider when choosing a provider

High Risk Business Credit Card Processing: A Comprehensive Guide

Table of Contents:

  1. What is A High-Risk Merchant Account?

  2. High-Risk and Low-Risk Merchant Accounts: What's The Difference?

  3. What Makes a Business High-Risk?

  4. Business Industries That Need High-Risk Business Credit Card Processing

  5. Understanding Why High-Risk Processing is Important

  6. Considerations When Looking for a High-Risk Merchant Provider

  7. Conclusion

People Also Ask:

What is considered high risk for credit card processing?

Merchants (businesses) are often regarded as high-risk if they have a large number of transactions or have a high transaction rate on average. If businesses process over $20,000 in monthly payments or have average transactions of $500 or more, they'll likely be considered high risk.

On average, merchants that accept international payments may also be classified as high-risk.

What does high-risk processing mean?

High-risk processing means that merchants classified as "high risk" need a specialized merchant account to accept and process credit or debit card payments.

What's a high-risk merchant?

A high-risk merchant is a business classified as high-risk by traditional financial institutions like banks, credit unions, and credit card companies.

What is A High-Risk Merchant Account?

If you're a business owner, you know that credit card processing is essential to running your business. But what happens if your company is considered "high risk" by traditional banks and credit card processors? This is where high-risk merchant accounts come in.

Simply put, a high-risk merchant account is a type of credit card processing account that's designed for businesses considered to be high-risk. Various contributing factors can make a business high risk.

High-risk businesses often have difficulty obtaining traditional merchant accounts, so they may have to pay higher fees for credit card processing. However, high-risk merchant accounts can allow companies to accept credit cards, which is critical for any growing business.

High-Risk and Low-Risk Merchant Accounts: What's The Difference?

A low-risk merchant account is just what it sounds like—an account for a business with a lower risk of fraud or chargebacks. Low-risk businesses typically include brick-and-mortar stores, restaurants, and utility companies. These companies usually have a long history of successful credit card processing and low rates of returns or refunds.

On the other hand, high-risk merchant accounts are for businesses that are at a higher risk for fraud or chargebacks. These businesses might be new or have a history of credit card processing issues.

Pro Tip: Don't sugarcoat your business's practices when applying for a high-risk merchant account to accept credit card processing. Be as detailed about your company and industry as possible if you wish to receive a more accurate rate quote.

What Makes a Business High-Risk?

Below are a few reasons businesses may be considered high-risk by traditional banks and credit card companies.

  • Higher refunds, chargebacks, or fraud ratios: If your business deals with a large number of monthly transactions, your risk for refunds, fraud, or chargebacks goes up.

  • Industry type: Certain business industries, such as online gambling and adult entertainment, are known for higher average chargebacks.

  • Not enough transactions: If your business doesn't have enough monthly transactions on average, this could put your business at high risk.

  • New business: If your company was established recently, you won't be able to present an extensive transaction history to a bank or credit union.

  • Location: Businesses in high-risk countries outside of the United States (Ghana, Nigeria, etc.) can lead to financial institutions labeling these companies as high-risk.

Business Industries That Need High-Risk Business Credit Card Processing

Certain high-risk business industries may have difficulty getting approved for regular business credit card processing. These businesses usually have to go through a high-risk merchant account provider to get the credit card processing they need.

Some of these high-risk business industries include:

  • E-cigarettes and other tobacco products

  • Online gaming and gambling

  • Dating websites

  • Adult entertainment

  • Multi-level marketing programs

  • Pharmaceuticals

  • Pawn shops

  • Travel agencies

  • Furniture sellers

  • Real estate

Understanding Why High-Risk Processing is Important

For high-risk businesses, finding a merchant account provider can be difficult. Many banks and processors won't work with high-risk businesses, while others will charge exorbitant fees for the privilege of processing credit card transactions. This can make it difficult for high-risk companies to find the capital they need to grow and prosper.

Fortunately, some merchant account providers specialize in working with high-risk businesses. These providers understand the unique challenges that high-risk businesses face and can tailor a solution that meets your specific needs. By working with a merchant account provider specializing in high-risk processing, you can get the services you need at a more competitive cost.

Considerations When Looking for a High-Risk Merchant Provider

If you're a business owner in a high-risk industry, you know that finding a trusted merchant provider can be challenging. Not all providers are willing to work with high-risk businesses, and of those that are, not all will offer the same terms or rates.

So, how do you choose the right provider for your business? Here are a few essential things to consider:

  • Pricing: When looking at different merchant providers, one of the first things you'll want to compare is pricing. What are the provider's rates and fees? Are they upfront about all of their charges? Make sure you understand what you'll be paying before committing to anything.

  • Terms and Conditions: In addition to pricing, you'll also want to look at the provider's terms and conditions. What kind of contract are you agreeing to? How long is it for? What happens if you need to cancel early? Be sure you're comfortable with the terms before signing on the dotted line.

  • Customer Service: Another vital factor to consider is customer service. What kind of support will you have access to if something goes wrong? Is there someone you can contact 24/7 if there's an issue with your account? Make sure you know what kind of service you can expect before choosing a provider.

  • Reputation: Before selecting a merchant provider, be sure to do your research and read online reviews. What do other customers have to say about their experience with the company? Are they happy with the service they received? You'll want to choose a provider with a good reputation to avoid any headaches down the road.

  • Security: Last but not least, when selecting a merchant provider, security should be one of your top concerns. What kind of security features does the company offer? Do they have fraud protection in place? Are they PCI compliant? These are all important factors to consider when making your decision.


Accepting and processing credit cards is essential for any business, regardless of size or industry. If you're the owner of a high-risk business, it's that much more important to find the right merchant services company that understands your needs.

At ModPay Solutions, we specialize in providing credit card processing to high-risk businesses. And with years of experience working with companies in various industries, we know the unique challenges you face.

Contact us today to learn more about our customizable high-risk merchant services and how we can help you take payments online and increase sales.

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