When selecting the best high risk merchant account provider for your business, there are factors such as pricing, contract terms, and security features that you must consider. However, that should not be your limit; other factors and features exist.
High risk merchant accounts are more costly than traditional merchant providers. They allow businesses to accept credit and debit cards, thus minimizing or altogether avoiding cash payments. This guide looks at the seven best high risk merchant account providers. We’ve also included benefits and consideration factors you can rely on to find the best.
Table of Contents
What Is a High Risk Merchant Account?
A payment processor labels a merchant account as high risk once they analyze your business account is at high risk for chargebacks, fraudulent activities, or higher sales volume returns.
A new business with bad credit scores and operating in high risk countries is considered a high risk business. Such businesses as adult entertainment are listed in the high risk category as they accept credit and debit card payments without physically seeing the card owner.
How We Selected the Best High Risk Merchant Account Providers
High risk merchant services partner with various underwriting banks to assist business owners in filling applications and shopping around with is that’s why prices vary. So, we did not focus on account fees or transparency when choosing the best providers to accept credit card payments.
Our focus was on specific features and the overall pricing structure. Every provider offers chargeback prevention, protection tools, and load balancing, but other providers stand out because merchants can get merchant accounts even with bad credit history or business type.
We also looked at their business ratings, the quality of their customer support services, payment features, customer reviews, and deposit times. Our evaluation shows that High Risk Pay is the best high risk merchant account provider.
In addition to its high risk payment gateway, highriskpay.com offers transparent pricing, low payment complaints, and quality customer services. They also don’t have any limit to the high risk category or the early termination fee.
What Is it Considered a High Risk Merchant?
A payment processor can label a merchant as high risk once they determine your business account is at risk of fraudulent activities, chargebacks, and high sales volume. Though traditional processing service providers find it challenging to consider businesses with elevated risks, advancement in payment processing solutions has made it possible for processors to serve high risk businesses.
Reasons for a merchant being considered high
There are many factors that a payment processing solution can characterize your merchant business type as high risk. Though each provider has criteria, here are general reasons for being considered high risk.
Higher transaction volume: Merchants are considered high risk because of higher transaction volume and a high average transaction rate. If your business processes over $20,000 monthly or $500 in average transactions, your business is considered high risk.
New merchant: if your business is yet to process payments or has a low transaction history, it can be listed as a high risk business as it lacks a track record.
Accepts international payments: If your business deals with international merchants in countries considered a high risk of fraud, your business could be considered a high risk except in countries such as Australia, Canada, the U.S., Japan, and the EU countries.
High risk industries: This is another reason for your business to be considered high risk by high risk merchants. Your business is considered high risk if it falls under categories that have a high risk of fraud cases and chargebacks. For instance, subscription service providers are labeled high risk as most customers sign up for free trials and forget to cancel their payments.
Low credit scores: A merchant with low-risk credit scores is also considered high risk.
Business types considered high risk
If your business falls under this high risk industry, consider finding best high risk merchant account provider.
Adult Industry
Furniture and electronic stores
Gambling
Online dating
Subscription services
E-cigarette, CBD, and vape shop
E-commerce
Multilevel marketing (MLM)
Debt collection
Credit Repair
Travel, airlines, cruises, and vacation planners
7 Best High Risk Merchant Account Providers
Here are the best merchant account providers;
- Best overall: PaymentCloud
- Best for Large risk businesses: Host Merchant Services
- Best for International Businesses: Durango Merchant Services
- Best for ultra high risk merchants: SMB Global
- Best for online CBD and high approval rate: eMerchantBroker
- Best for high risk businesses: High Risk Pay
- Best for high risk e-commerce businesses: Soar Payments
1. Best overall: PaymentCloud
PaymentCloud, based in Woodland Hills, California, is one of the best merchant service providers you can rely on. The company boasts great customer service and fast approvals. Its products and services include:
- Mobile phone swipers.
- Point-of-sale solutions.
- Online payments gateway.
- Virtual terminal.
- Merchant cash advances.
- EMV-compatible terminals.
PaymentCloud offers a dedicated account representative to assist new merchant account owners throughout. The company is yet to receive negative complaints from customers. When it comes to pricing, they customize their prices according to business types and processing history.
With these merchant account providers, you can accept online, ACH, credit card, and cryptocurrency payments through POS. Another thing is, PaymentCloud offers zero-cost credit card processing accounts after a merchant signs up for their mobile EMV terminal.
This merchant accounts provider caters to low-risk, medium-risk, and high risk merchants, including dating sites, tech support, cigars and tobacco, adult entertainment, debt consolidation, and credit repair.
Pros
- Specializes in high risk merchant payment processing solutions
- High-customizable payment processing solutions
- Accept new business types
- Have a quicker approval rate
- Works with all payment gateways
- Seamless merchant account migration
Cons
- No fees disclosed
If you’re a small business owner but running a high risk business, PaymentCloud works best for you. You’re guaranteed chargeback and fraud prevention. They can also handle large-scale transactions securely thanks to their level 2 and 3 data processing.
2. Best for Large risk businesses: Host Merchant Services
Host Merchant Services, based in Newark, Delaware, is a merchant account provider suited for most business types and domestic high risk merchants. Its primary focus is on e-commerce businesses. Its products and services include online marketing tools, mobile credit card processing, online payment gateway, virtual terminal, and point of sale solutions with specific packages for professional services, contractor, restaurant, and salon sectors.
What we like about host merchant services is that they offer interested new business owners free websites and email addresses. They are rated an A+ with BBB and CPO and always receive positive merchant feedback.
We rate it as best for high risk businesses as Host Merchant Services partners with Electronic Merchant Systems to offer services specifically tailor-made for high risk businesses. If you open the merchant account with them, you will accept credit card payments, ACH online payments, through mobile POS, or in-person.
Some of the high risk businesses that can benefit from Host Merchant Services include life coaching, e-cigarettes, airlines, loan modification companies, pawn shops, real estate, web hosting, SEO, timeshares, modeling agencies, debt collection, gambling, some international merchants, and adult toys.
If your business processes over $10,000 in sales monthly, Host Merchant Services is the best for you. They also have transparent pricing on their website with no contracts or account fees needed.
Host Merchant Services charges per transaction fee.
Their transaction fee includes interchange fees plus;
- Restaurant: 0.20% & 9 cents/transaction
- Retail storefronts: 0.25% & 10 cents/transaction
- E-commerce: 0.35% & 10 cents/transaction
These fees are a little higher for small business owners, but they are worth it for large business types.
Pros
- Works with various business types
- Great customer service
- Offer support for no-cost credit card processing
- Interchange plus rate for only low-risk businesses
- No termination fees
- No contract
Cons
- Higher rates for new and very small businesses
Though they specialize in e-commerce businesses, they are also a reliable alternative for high risk businesses. They are partners with EMS to offer customized and tailor-made services suitable for high risk businesses.
3. Best for International Businesses: Durango Merchant Services
Durango Merchant Services, based in Durango, Colorado, offers products and services for high risk businesses. This is the most reliable and oldest merchant service provider. They are known for assisting small businesses with bad credit history secure a payment processing solution.
They work with various processors and banks worldwide to ensure businesses get services that meet their needs. So if you have international merchants or customers, this is your go-ahead alternative.
Durango Merchant Services specializes in multi-currency merchant accounts, making it ideal for international transactions. They also accept crypto processing and digital coins online, in-store, and via invoice. You will get assigned an account manager for a lifetime and their direct contact number.
Another thing is opening an account with Durango is easy as they don’t consider your business history, whether or not a different provider rejected you, and whether your merchant account was terminated. They assist low businesses, even with poor credit, by providing low rates and using risk management tactics to maintain lower risks.
Pros
- Supports crypto processing
- Provides offshore businesses account
- Multi-currency merchant accounts
- Caters to very high risk businesses
- No early termination fee
Cons
- No fees listed
Durango is a merchant account provider that doesn’t just price high risk merchants with flat standard prices. The exciting part is you contact them to negotiate. You can explain your case to them based on the business type or locality.
4. Best for ultra high risk merchants: SMB Global
SMB Global, based in West Jordan, Utah, is a high risk merchant accounts provider specializing in supporting ultra-high risk businesses such as adult, gambling, offshore businesses, debt collection, and CBD. Ultra high risk businesses are those that other high risk specialists often turn away.
With over 20 international and domestic banking relationships, you can rely on SMB Global no matter your locality. This is a guarantee of a customized solution for merchants. Their payment processing includes checks, credit cards, international, and ACH payments.
With their dedicated team of customer representatives and developer-friendly APIs, you get full customization and how to accept payments. Their chargeback prevention suite allows you to monitor your account in real time. In cases of any difficulty, their chargeback representment will assist you.
SMB has two payment gateway solutions; and Network Merchants. They have a free EMV terminal and mobile reader if you want to accept in-person payments. This is a bonus for those operating a mobile or static storefront. For those with an international customer base, SMB Global is best for high risk businesses.
Pros
- Fair rates for the international payment
- Works with businesses that have a bad credit history
- Accepts ultra high risk merchants
- Supports offshore businesses
- Over 175 online shopping cart integration
Cons
- Only specific businesses (not listed) get a free terminal
- No prices listed
- Strict guidelines for approving CBD businesses
SMB Global is an excellent choice for high risk businesses. Some industries they work with include weight loss programs, firearms, auto parts, collectibles, supplements, and electronics. You can contact them to confirm their pricing and check if your business type will be considered.
5. Best for online CBD and high approval rate: eMerchantBroker
eMerchantBroker, based in Los Angeles, is one of the best-known credit card payment processors specializing in high risk e-commerce business types. Its high risk processing services include online payment gateway, chargeback dispute resolution, MOTO processing, ACH processing, and merchant cash advance.
eMerchantBroker has a BBB rating of A+, and the company has maintained a lower complaint review. You get custom pricing plans depending on your business type and needs. Their approval rate for merchant accounts is 99% and it takes 48 hours for low-risk and high-risk merchants to get approved.
When dealing with customer services, they are available 24/7. Whether you are a new business, have no credit history, or have poor personal credit scores, eMerchantBroker has you covered. Even if your merchant account was closed because of chargebacks, they are ready to assist you. Besides, their chargeback dispute resolution feature will prevent that from happening again.
eMerchantBroker serves businesses such as prepaid calling cards, Ecig merchant accounts, ticket brokers, airlines, water purifiers, electronics, furniture, gaming, and sports betting advice, Tech support, educational seminars, adult entertainment, credit repair, collection agency, diet programs, software and eBooks, and more.
What we also liked is their expertise in working with high risk businesses. Their 24/7 customer support, chargeback mitigation services, and fraud prevention make it best for high risk businesses. Their customized payment gateway solutions ensure you meet your business needs. eMerchantBroker is also the best option for small businesses selling high-risk products and services.
They also have a transparent pricing structure, but their transaction and monthly fees vary. Here is a quick breakdown;
- Chargeback fee: $35
- Payment gateway fee: $0 for proprietary payment gateway but up to $25 with partners
- Rolling reserve: 0% to 10%
- Contract length: one to three years
- Early termination fee: up to $595
Pros
- $0 e-commerce integration monthly fee
- chargeback prevention system
- Specializes in CBD
Cons
- long term contracts
- Early termination fee
So, if you sell CBD oil, edibles, and vape extracts, eMerchantBroker is the best for you. Even though other processors like PaymentCloud exist, you should compare prices before deciding.
Also, you get to enjoy advanced features such as multi-currency conversion, intelligent transaction routing, and 3D security. You can even integrate with apps like WooCommerce, Wix, Square, and Shopify.
6. Best for highest approval rate: High Risk Pay
High Risk Pay primarily specializes in offering merchant accounts for high risk businesses. It processes credit and debit cards for high risk business types. Some of the industries they serve include CBD, bad credit, startups, e-cigarettes, e-commerce, travel, and adult entertainment businesses.
By signing up with them, you’ll enjoy fast approvals, a virtual terminal, payment gateways, a POS terminal, fraud protection, chargeback protection, recurring billing, data reports and analytics, continuity subscription, and B2B/B2C processing.
With a BBB rating of A+, this service provider is yet to receive customer complaints. Regarding pricing, this is the most transparent provider on this list. The most interesting part about High Risk Pay is they accept all types of businesses.
So, whether you have a poor credit score, a new business, or your account was terminated, you will get approved by them. The fast merchant approval rate of 24 hours to 48 hours makes them reliable.
This is what their pricing looks like;
- Payment gateway fee: $10 per month
- Monthly fee: $10
- Swiped rate: 1.79% to 9.95% + $0.25
- Keyed-in rate: 2.19% to 9.95% + $ 0.25
Their transaction fees vary depending on business type, transaction history, and locality.
Pros
- Flexible terms and conditions
- Higher processing limits
- Dedicated customer support
- Handles setup, application, and transaction fees
Cons
- They haven’t mentioned early termination fees.
7. Best for high risk e-commerce businesses: Soar Payments
If you’re running a high risk U.S based business, Soar Payments is your go-to alternative. Based in Houston, Texas, Soar Payments offers high risk merchant accounts for online businesses. Once you apply with them, you get an instant quote, minimum industry pricing, and a direct number to their customer representative.
Soar Payments is a reliable, efficient, and flexible high risk merchant account provider. What we like about this credit card payment processor is they accept businesses that most payment providers reject. This includes country clubs, Nonprofits, Pet products, fantasy, antiques and collectibles, Saas companies, sports betting, and bus lines.
Soar Payments are also transparent on the business industries they don’t work with. It includes
- Adult products
- Cryptocurrency
- Debt collection or relief
- Kratom or marijuana
- Payday loans
- Pharmaceuticals
- Tech support
- Hate or racial content
- Foreign exchange
- Gambling
It also clearly states it doesn’t work with any business that engages in illegal activity, MATCH-listed applicants, and one with very bad credit.
What makes Soar Payments outstanding is the 24-hour approval rate and instant online quotes, which you won’t find in any listed alternatives. But, their underwriting process takes five business days. The company also boasts of great customer care relationships, direct interactions with accounting, and e-commerce platforms.
Though they don’t charge setup fees, their early termination fee is also $0 for some merchant accounts. Otherwise, depending on the merchant, they charge between $200 and $395. This is how their pricing looks like
- Average monthly fee: $19 to $45
- Application setup fees: $0
- Transaction fee: 2.49% for medium-risk merchants; Also have tiered and interchange plus pricing.
- Early termination fee: $0 for some merchants, $200 to $395 depending on merchant standing
- Chargeback fee: $25 to $30
- Rolling reserve typically: 5% to 10%
- Contract Length: 2 to 3 years
Pros
- Instant price quote after online application
- Industry minimum pricing
- Strong support for US-based customers
Cons
- Don’t work with ultra-high risk businesses
- It doesn’t support businesses with bad credit scores
- Higher early termination fee
- Work with US-based businesses only
Overall, Soar Payments has very competitive terms, especially for high risk merchants. Their initial two-year contract automatically renews for one year after that. The termination fee of $495 also applies to the first two years of the merchant’s contract.
How to Choose a Reputable High Risk Payment Processor
If your business is mentioned under a high risk industry, you should find a reliable merchant account provider. When choosing a reputable high risk payment processor, go for one that suits your business and needs. Here are the factors to consider.
Experienced with high risk businesses
This is a crucial consideration factor for always checking the credit card processor’s website. Though they are high risk specialists, they don’t accept all high risk businesses. Check their website or contact their sales department to check if they accept your business type.
High-risk industries include business types such as adult entertainment, gambling, CBD products, e-commerce, and more. So, find a processor that understands the challenges and requirements in your industry.
Transaction limits
Most high risk businesses have a larger sales volume, unlike low-risk businesses. So, if your business makes over $20,000 monthly, select a payment service provider that can handle higher transactions. You can confirm their transaction limit to ensure your business needs will be met.
Load balancing capabilities
Load balancing means you can spread your transactions on multiple merchant accounts integrated with a single payment gateway. This is beneficial because you can still rely on others when one account drops. Additionally, you will also transact more on a monthly basis with multiple accounts.
Chargeback management
Chargebacks are a pain for most high risk businesses. So, when selecting your merchant account provider, choose an experienced processor who can manage chargebacks and have the necessary tools to prevent them. Go for one that provides represented services, chargeback alerts, and other management tools.
Representment services are a method by which businesses respond to chargebacks. Its purpose is to prove that the charge being demanded is legitimate and cannot be reversed.
Security and fraud prevention
Fraud and chargebacks are what affect high risk businesses. When choosing your payment processor, go for one that offers tight measures for security and fraudulent activities. Some of the features that guarantee security is a 3D secure technology, encryption services, and any other measure to prevent customer data leakage.
Contract & fees
Since most high risk merchant account providers deal with multiple credit card payment processors, they rarely list their fees online. That’s because transaction fees vary from one processor to another.
However, some merchant account providers are transparent about their pricing. For instance, highriskpay.com has listed its swipe and keyed-in rates on its website in addition to its monthly subscription fee. Also, they don’t charge application and set up fees nor list anything about early termination fees and
So, before signing any contract with a merchant service provider, pay attention to their rates and ensure you are okay with any extra processing fee mentioned.
Quality customer support
Running a high risk business needs a reliable and great customer service from payment processors. A good processor offers 24/7 support and excellent customer service. You can learn more about customer support through the previous customer reviews section.
Get a quote from a credit card processor
As mentioned earlier, prices vary from one service provider to another. So, if you need a card processor that meets your budget, it’s best to get quotes from different providers. This way, you will settle for a merchant account provider that meets your budget and business needs.
Generally, choosing a high risk merchant account processor for any high risk business needs careful consideration. Choosing a processor experienced in your business type has high transaction limits, applies tight security and prevention measures, and has reliable customer support and competitive pricing guarantees your high risk business success.
High Risk vs. Low Risk Merchant Accounts
Having your business listed in the high risk category can be frustrating. But there is still a chance your business will get an approved merchant account. In addition to high chargebacks and increased sales volume, a merchant can be listed as high risk because of poor credit card payments.
Overall, a high risk merchant account has the same features and functions as the traditional currently low-risk merchant accounts. However, these two accounts vary. While high risk merchants are businesses dealing with larger transactions of over $20,000, low-risk merchants are small business owners earning less than $20,000 monthly.
A high risk merchant account needs a more extensive underwriting procedure before the merchant account gets approved then you start receiving credit and debit card payments.
The credit card processing fees for a high risk merchant account are higher than that of a low-risk merchant account.
Usually, with high risk merchant accounts, you may have to accept long-term contracts with early termination fees. Low-risk accounts don’t have an early termination fee. But, the rules surrounding early termination fees from providers vary.
High risk account often comes with rolling reserve to protect against any chargebacks.
Other Considerations
When choosing the best high risk processor, you can also consider the following factors;
High risk payment gateway
You need a payment gateway if your business accepts credit card payments essential for online payment processing. Payment gateways have varying features, so understand their security features like tokenization.
Payment methods
There are many payment options. It can be online payments, take in-person, or contactless payments for your physical store. You can even decide to accept ACH transfers, send invoices, and even crypto. The high risk payment processing solutions you choose should provide you with software and hardware to enable you to receive payments the way you want.
Benefits of a High Risk Merchant Account
By choosing a high risk merchant account, here is what you tend to benefit from;
- Your merchant account with higher chargebacks won’t be at risk of termination
- High risk merchants have put in place all the necessary security and processing measures to prevent fraudulent activities and minimize the chargeback rate
- There will be fewer limitations to transacting with international merchants and processing large volumes, thus not limiting business growth
- With a high risk merchant account, you get a dedicated merchant account manager. Meaning you will work with someone who fully understands your business needs.
5 Tips to Reduce Chargebacks
A business with higher chargebacks is one reason merchants categorize it as a high risk business. Besides the risks it brings to business, chargebacks are costly, and many need higher processing fees. But you can prevent chargebacks from happening by using the following tips.
Use address verification service (AVS)
An AVS is used to verify that the billing address matches the address on the cardholder account file. The transaction will decline if they don’t match, and that’s an easy way to detect stolen credit cards and fraudulent activities.
Sign-up for fraud alert
Many payment processors send alerts to merchants once a suspicious transaction is detected. If the transaction seems shady, do not fulfill the request. The best thing to do is to issue a refund before any dispute claims.
Ensure the merchant account is correctly set
The dispute arises because customers do not recognize the business owner’s name on their credit card. You can solve it by ensuring a billing statement text is extended to your website domain.
Clearly state your return policy
When you have a clear return policy stated in your business receipts or website, it becomes easy for customers to reach you and settle returns. Prompt customer service will greatly help in avoiding disputes.
Train your staff
Since you are a high risk business, you surely must have employees. Educating your employees on how to identify potential fraud, enter orders properly, and use verification tools will make it easy to avoid chargebacks.
Conclusion
Most businesses in the high risk category choose the above high risk merchant account providers because of fast approvals, great customer support, low rates, and reliability against security and fraud prevention. Though no high risk providers approve all high risk businesses, highriskpay.com remains unique as it gives an instant approval rate of all high risk accounts within 48 hours. So, always consider the features listed above before making your choice.
Frequently Asked Questions About High Risk Merchant Account Services
1. What documents do you need to apply for a merchant account?
You need your bank account details, employer identification number, government licenses linked to your business, financial statements, and Payment Card Industry compliance.
2. Why do you need a high risk merchant account?
If you are accepting credit and debit cards payment in your business, you need a merchant account. A merchant account acts as a bridge between you and a customer. It enables business owners to draw funds from a customer’s bank account and deposit them in their business bank account.
3. Does Stripe allow high risk merchants?
No, Stripe doesn’t allow high risk merchants.
4. How much does a high risk payment processor charge?
Generally, an average high risk payment processor charges a credit card payment of between 1.5% and 3.5% and a monthly fee of $10 to $50.
5. What business types are considered high risk?
High risk businesses include furniture and electronic stores, e-commerce, adult entertainment, subscription services, multilevel marketing, online dating, gambling, travel, CBD and vape shops, and debt collection.
6. What are high risk merchant account fees?
You are subjected to higher merchant account fees, unlike traditional merchant accounts. A high risk merchant account fees may include setup fees, early termination fees, terminal fees, plus per-transaction fees and chargeback fees.
