What Is a High Risk Merchant Account?

A credit card merchant account can be a great financial tool if you use it right. But if you don’t, it’s going to cause you issues. For instance, if you give your account information to someone with a bad credit score, or get it stolen, you may find your account becomes “high risk.”

In that case, you need to switch to a high risk merchant account. This way, you don’t allow a less-than-trustworthy individual to take advantage of you.

To that point, read on. In this article, we’ll break down what you should know about high risk merchant accounts.

High Risk Merchant Accounts: An Overview

A high risk merchant account is a type of merchant account designed for businesses considered to be high-risk. These businesses need to have access to their funds quickly and easily, and an account provides them with that capability.

These accounts also come with added fees and restrictions that don’t usually apply to other merchant accounts. But they offer protections that can help protect the funds of a high-risk business. They often include fraud protection and fraud prevention services.

Types of Businesses That Need a High Risk Merchant Account

Different types of businesses need a high risk merchant account. Some of these businesses are below:

Online Gambling

Many banks are weary of providing online gambling businesses payment credit card processing services. The account enables online gambling businesses to accept a variety of payment methods from their customers. This includes credit cards and other online payment processors.

The catch is that the business will likely be subject to regular audits by the merchant account provider. This is to ensure that the business is operating in a compliant manner and that all customer data is secure.

Adult Entertainment

These businesses are more skeptically viewed by banks and payment processors. So this makes it necessary for adult entertainment businesses to have high risk merchant accounts. Otherwise, they may have restricted transactions.

High risk merchant accounts also provide features specifically designed for adult entertainment businesses. This includes secure payment processing, secure cards, and restricted access to customer data. If you’re interested in the ins and outs of the business, you can learn more about selling adult novelties on the link.

Travel Agents

Transactions in the travel business often have a higher risk of chargebacks. This can happen if a customer’s flight is canceled, if their trip is delayed, or if something else happens that makes them want to return their goods. With a merchant account, travel agents can protect their businesses from expensive chargebacks and losses.

They can also access and set up features like automatic scam prevention and risk analytics. To make the most of their sales, travel agents also need to accept payments from people all over the world. This means that their payment processing service must let them accept a wide variety of currencies and payment ways.


A high risk merchant account is necessary to process credit cards and online payments for a business such as telemarketing. So telemarketers need to work with specialized payment processors. These processors will know and understand the nuances of their business.

A high risk merchant account allows telemarketers to accept payments quickly and securely. It provides them with features such as payment dispute resolution and fraud protection.


Pharmaceuticals often need a high risk merchant account. This is because these are generally very sensitive products. They need extreme caution and oversight for customers when it comes to their purchases.

Money-Lending/Payday Loans

Payday loans and money lending services, need to adhere to financial factors. They need to follow certain principles to ensure a safe and trusted system upon which to transact money and take out loans.

Thus, many lenders and borrowers do not trust traditional banks and financial institutions. They instead rely on the security of a high risk merchant account. This is because they can handle and safeguard large amounts of money over a secure and reliable system.

Warranty/Service Plans

Warranties bring with them the certainty and protection that consumers need for extra security. Customers expect the merchant to store their information and adhere to government regulations. As a result, these businesses must have a secure payment processing platform such as a high risk merchant account.

Subscription-Based Services

An example of this is an online streaming service, which requires constant payments over time to keep customers. These services need a merchant account to be able to securely and efficiently process customer payments.

The Process

First, the business must present detailed information. The company must present a business model and expected volume of consumers. They must also add other pertinent information required by the agency they are applying to.

Next, the merchant needs to provide evidence of sound financial stability. Then, the merchant must verify their bank account and identity before the application approval.

The last step involves the signing of a high-risk merchant agreement and putting in place anti-fraud security measures. Once all the paperwork is completed, the provider will activate the merchant account. Then, they can begin processing payments.

The Risks

The risks associated with high risk merchant accounts include higher fees. There will also be more paperwork during the application process. And there will be increased scrutiny of the retailer’s data.

High risk merchants are usually required to provide additional documents. This includes tax returns, background checks, and bank statements. The account processing fee will also include extra costs to cover potential fraudulent activity.

Is a High Risk Merchant Account Right for Your Business?

A high risk merchant account can help businesses that operate in higher risk industries to be able to process payments and receive funds. With low processing fees and chargeback protection, merchant accounts can bring huge benefits. Not to mention that businesses get to have an extra layer of security.

If you are interested in seeing the benefits of a high risk merchant account for your business, contact an agent to discuss the options today.

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