3 Things You Need to Know About High-Risk Merchant Account Processing

August 18, 2022

Chris Algie

Head of Business Development

Few things are guaranteed in business but one thing we can be sure of is risk. There are many types and levels of risk and, unfortunately, perception matters. Is your business in a so-called high-risk industry? If so, you’ll want to read our article on the key things to know about high-risk merchant account processing, including what dictates risk levels, how this can impact your payment processing and why the right partner can make a big difference.

From meeting compliance requirements to ensuring a smooth checkout experience, the high-risk nature of an industry can lead you to require additional support from your payment service provider (PSP). When it comes to payment processing, high-risk merchants should consider the support of an experienced payments consultancy or service provider. Let’s dive into the key considerations.

1. What makes a merchant account “high-risk”?

Merchant accounts that are considered high-risk usually share some commonalities. The business model is one of the first indicators. For example, if the nature of the business generates more risk exposure, by selling intangible services rather than products. 

These business models tend to see larger numbers of transactions per month, and high volume contributes to greater risk exposures.

Payment processing for industries like dating, gambling, and many other subscription services, generally falls into this category of high-risk merchant account processing. With additional data concerns and blurred lines surrounding legalities, those red flags put you at greater risk of fraudulent activity and chargebacks. Other factors that will greatly contribute to risk exposure include an international payment acceptance, low credit score, or no payment processing track record. 

Equally, your company’s reputation can influence perception from PSPs and stakeholders. A low credit score or an online presence saturated with negative reviews and fraudulent terminology that might suggest fraudulent interception are huge red flags. Compliance is another key assessment tool for risk assessors and stakeholders, and poor compliance records can push you towards a high-risk label.

2. Why being labelled “high-risk” can have an impact on your payment processing

Let’s get one thing straight, being considered a high-risk merchant (or what we like to refer to as higher risk) isn’t always a bad thing. What we need to do is look at ways to manage this risk rather than remove it entirely. There will always be some level of risk in business management, but how you approach it is ultimately what matters.

So, what kind of impact does this have on your payment processing? The impact mainly stems from higher payment processing fees. Fees for high-risk merchant account processing are generally greater than with low-risk ones. 

There are additional considerations for the payment process in cases of high-risk accounts. For example, rolling reserves to counteract the risk of loss to the merchant, additional PCI considerations and regulatory demands.

Plus, if a merchant’s payment processing history includes incidents of fraud, or if they lost their previous account due to a high chargeback ratio, they may struggle to get a high-risk merchant account.

If you operate with a subscription model, as mentioned above, this can increase risk. But with robust tools and the right payment gateways, most risk challenges can be overcome.

3. How the right high-risk merchant account processing partner can make a big difference

If you think you fall into the high-risk category or if you’re grappling with any of the issues mentioned above, don’t panic. This isn’t necessarily a hindrance to your business. With the right support, additional risk factors can be managed professionally – ensuring your business operates smoothly, reputation is managed and compliance requirements are met. 

A good payment processing partner that has experience working with high-risk merchant accounts can offer tailored rates and help you manage the costs of being a high-risk account more effectively. They can offer support in maintaining high volume traffic rates that the acquirer will accept and be willing to onboard.

Below are some of the capabilities a trusted high-risk merchant account processing provider will be able to support you with:

  • Sought-after expertise and payment knowledge – be sure your provider is a trusted authority on the subject of high-risk payment processing accounts and has built both a reputation and portfolio within the space
  • Bespoke solutions – look for a provider who can offer a portfolio of bespoke solutions, such as efficient payment card processing and alternative payment methods (APMs)
  • Risk management capabilities – can they provide technological tools to prevent high chargeback and fraud ratios? 
  • Transparent payment structures and payment consulting will help you eliminate the possibility of reputational damage and inefficiencies
  • Ongoing support – 24/7 and continuous support is a must from any provider since the high-risk nature of your account comes with many unpredictabilities
  • Strict security should be a top priority with greater risk exposure – look for a provider who can offer robust security solutions

When you find the right payment processing partner, you should be assigned dedicated account managers with varied expertise, who can offer cutting-edge payment solutions. A specialist payment consultancy should consist of experts specialising in payments compliance, risk management and dispute management.


Complex business models can equate to higher levels of risk. But that label doesn’t automatically set you up for failure. Hopefully, this blog has shed some light on the best ways to manage and counteract the potential risks that could lie within your business. With tailored support from an experienced provider, your business can succeed and operate efficiently, even with a high-risk, high-volume model.

Risk should be managed, not avoided. And a partner like Fibonatix can help you do just that. We have a portfolio spanning an array of industries and we support high-risk merchant account processing, helping businesses categorised as high-risk to boost sales and meet compliance requirements while avoiding financial and reputational damage. Our knowledge, expertise and bespoke solutions let us help you deliver a seamless payment experience.

If you wish to get some further reading on this topic, feel free to download our Merchant’s guide to Chargeback Management, which explores the topic of chargebacks at greater length, including the main participants and the most common reasons consumers make chargebacks. Alternatively, if you’d like to discuss your account with a member of our experienced payments team, get in touch with Fibonatix today.