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Reasons Why You Need A High-Risk Merchant Account

High-Risk Merchant Accounts: What Are They and How Do You Get One?

High-risk merchant accounts are a type of service that enables companies to accept credit card payments from consumers. Credit card processors categorize merchants as either high risk or low (average) risk based on various variables.


High-risk merchants have fewer processor options, as well as higher fees and tighter contracts. It sounds terrible to be classified as high-risk. However, in some situations, it can be your best choice.

Identifying Merchant Accounts

eCommerce merchants cannot function without the acceptance of credit or debit cards. But before you can accept “plastic,” you’ll need a payment processor that will serve as a go-between for you, banks, and credit card networks.


Many processors only do business with low-risk merchants, whom they regard as a safer investment. As a result, companies deemed high-risk would have a small number of possible processors to choose from. Any processor you approach will conduct a comprehensive review of your business to decide whether it fits their concept of “high risk” based on the financial risk it represents.

Why Is Good For Your Business

The rationale of setting up any high-risk account seems counterintuitive. After all, any organizations that run in high-risk industries invite fewer institutions willing to do business with them, if not outright rejection. Most financial institutions conduct risk calculations before categorizing accounts into a high-risk binary or low risk. 


The latter is anything that doesn’t happen to be high risk. While specific markets, like gambling and adult entertainment, dominate the high-risk category, the number of seemingly innocuous entities falling into the same category seems to be increasing. This, in turn, increases the likelihood of any given account falling into the high-risk category, meaning that while high-risk status should not be actively sought after, it should be anticipated and prepared for because it could very well become a reality.


With all of this information in mind, the following are five reasons why you need to set up a high-risk account.

1. You May Be At High Risk Already

The first reason you need to set up a high-risk account is that you may very well be running a high-risk business. There may be many arbitrary reasons why your account is classified as high risk, including chargeback history and operation within a high-risk industry. More and more institutions are using convenient yet risky digital credit card payments, yet the risk goes up without instant bank verification methods. Having a high-risk account makes it more difficult to find financial institutions willing to do business with you. Making use of high-level merchant services can therefore secure your bottom-line success.

2. Chargebacks Are Enabled

The second reason why you need to set up a high-risk account is that more chargebacks are permitted. Chargebacks provide some of the very best benefits to signing up with high-risk merchant service providers. Merchants tend to charge fees per chargeback that cover services’ administrative costs. High-risk payment processors tend to charge exceptionally high prices per transaction. Furthermore, preexisting presence in a high-risk industry and receipt of excess chargebacks drive up prices even further. That being said, high-risk merchant accounts are seldom shut down due to excessive chargebacks. Though a merchant may pay heftier fees, its competitiveness and longevity run no risk of compromise.

3. High Risk Can Reap Rewards

The third reason you need to set up a high-risk account is to use it to earn more money. High-risk merchant services backing up payment processing can enable you to cultivate a source of sustainable long-term growth for your account. More than a few merchants rely on large transactions or recurrent payments to create steady income streams to bolster their businesses. High-risk merchant service providers allow you to follow this path with relatively little trouble.

4. High Risk Can Heighten Security

The fourth reason you need to set up a high-risk account is to be more secure. The very nature of high-risk enterprises encourages more careful payment processing. High-risk merchant services regularly make use of reliable means of detection during transactions to determine whether the card and transaction are legitimate or not. Such techniques help guard the organization, the cardholder, and the merchant provider from fraud or theft.

5. High Risk Can Generate Growth

The fifth and final reason you need to set up a high-risk account is that it provides ample room for expansion. The usual low-risk processors tend to place spending and currency limits on transactions, limiting growth. The sheer earning potential brought about by more sales can make high-risk accounts appear more attractive. Additionally, seemingly endless revenue opportunities stem from promising prospects of making sales in the broader marketplace and various currencies. It’s vital to ask relevant questions while enlisting the help of high-risk merchant services providers to make sure that you are teaming up with the provider best suited to you and your needs.


The business world can be counterintuitive, and the dichotomy between high and low risk is a prime example. While high-risk entities may struggle to do business or build fiduciary trust, they offer security and room for expansion. Low-risk entities are safer but have limits.
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