Follow Us:

Protecting Your Business With a High Risk Merchant Account

If you’re a business owner, and looking to Open High Risk Merchant Account, it’s important to understand the risks associated with credit card processing and to take the proper precautions to ensure the security of your transactions.

While Opening High Risk Merchant Account provides a secure way to accept payments online or through a Point of Sale (POS) system. They are specially designed for businesses that are considered “high risk” by banks and other financial institutions, such as those in the gambling, travel, dating, and adult industries.

In this article, we’ll cover what a high risk merchant account is, what services it provides, and what fees you should expect when setting up one of these specialized accounts. We’ll also provide some helpful tips on how to select the right high risk merchant service provider for your business.

What Is a High Risk Merchant Account?

A high risk merchant account is a type of payment processing solution that is specifically designed to serve businesses that are considered to be “high risk”. This designation is judged by the processor or bank and includes any business that presents an increased level of risk for chargebacks and fraud. These types of merchants are not accepted by traditional payment processors, so they need to use a specialized service in order to process their payments.

High risk merchants typically fall into one or more of the following categories:

  • Adult Entertainment/Dating Services
  • Online Gaming/Gambling
  • Pharmaceuticals/Supplements
  • Firearms Sales
  • Subscription Services (including recurring billing)
  • Nutraceuticals/Weight Loss Programs
  • Travel Services and Leisure Activities.

Open High risk merchant accounts are not only tailored to the business type, but the fees associated with these types of accounts can be much higher than what merchants with “regular” accounts pay when they accept payments. This is due to the higher risks associated with such transactions and the greater potential for chargebacks and fraud.

Identifying and Reducing High Risk Merchants

A merchant account is an arrangement between your business and a payment processor that helps protect you and your customers from potential fraud and chargeback risks. This type of account is beneficial for businesses that operate in higher-risk industries such as online gaming, travel, adult entertainment, e-commerce stores, and more.

One way to identify a high risk merchant account provider is to consider the type of transactions they accept. If your business involves extensive card-not-present transactions, you’re at a higher risk of chargebacks and fraud. High Risk Merchant Account Providers may be more willing to accept these types of payments because they’re often more familiar with the potential risks associated with them.

You can also reduce your chance of becoming a high risk merchant by implementing processes such as using manual card entry or configuring automated fraud detection filters. It’s important to constantly review your security protocols and evaluate other methods to reduce the chances of fraud or chargebacks. Additionally, ensuring that you have adequate customer support infrastructure in place (such as 24/7 live chat) can help prevent customer dissatisfaction from turning into payment disputes or chargebacks.

Benefits of a Opening High Risk Merchant Account

Opening high risk merchant account offers businesses a number of advantages, from lower transaction fees to greater protection against fraud. Here are three benefits of having a high risk merchant account:

Lower Transaction Fees

High risk merchant accounts can offer businesses significantly lower transaction fees compared to traditional accounts. These accounts are designed to accommodate businesses that have higher rates of chargebacks and credit card fraud, so they can access the same merchant services as their traditional counterparts, but at a more cost-effective rate.

Increased Protection Against Fraud

High risk merchant accounts can offer additional layers of protection against fraud, such as enhanced verification and authorization systems. These systems work by analyzing sales patterns in real-time and flagging suspicious activity for further review. This helps to protect your business from fraudulent transactions, ensuring that you can better protect your customer data and secure customer loyalty.

Improved Cash Flow

Having a high risk merchant account also helps improve cash flow, as payments will reach you faster due to the streamlined processing times associated with these types of accounts. Additionally, some high risk merchants may qualify for immediate funding which gives them access to capital more quickly than traditional merchants.

The Application Process to Open High Risk Merchant Account

Opening high risk merchant account requires extensive information about your business practices and operations. This includes information related to your legal entity, products and services, volume and sales, customer base, financials, and more.

The details that must be provided to the merchant service provider are needed in order to evaluate the risk associated with your business and decide on the best course of action.

The application process typically includes:

  • Providing personal identification documents, such as Social Security numbers or driver’s license numbers
  • Sharing banking information
  • Providing proof of address confirmation
  • Listing references for additional verification
  • Documenting the nature of your business activities
  • Answering any questions posed by the merchant service provider in order to assess risk levels
  • Supplying a copy of any eCommerce terms of service or other documents related to your business operations.

A high risk merchant account is not always easy to come by, so you must provide as much information as possible in order to make sure you are accurately evaluated and approved for this type of account.

Fees Associated With High Risk Merchant Accounts

High risk merchant accounts come with special fees, including higher processing charges and extra compliance and security risks. These are necessary to protect you and your customers from potential fraud, as well as to help mitigate any losses your business might incur.

Processing Fees

High risk merchant service providers typically charge a greater processing fee than non-high risk merchants because they incur higher risks. This type of pricing is in place to cover any additional fees associated with providing this level of service.

Compliance Fees

Your high risk merchant account provider may also require you to pay compliance fees in addition to processing fees. This is usually due to the extra regulations imposed on businesses that process payments in certain industries, especially those considered more risky.

Security Fees

Security fees are also common with high risk merchant accounts and can range from monthly charges to one-time charges for specific security services or policies. These are typically used to cover additional authentication steps such as tokenization or encryption, which protect both you and your customers from fraud.

Avoiding Fraudulent Transactions Opening High Risk Merchant Account

Fraudulent transactions pose one of the biggest threats to businesses of all sizes, especially those in high-risk industries. But the good news is that with a High Risk Merchant Account, businesses can enjoy greater protection from malicious chargebacks and fraudulent activity.

What is Fraud Protection?

By using a trusted service provider, businesses can avail themselves of fraud protection services such as Verified By Visa and Master Card Secure Code. These services ensure that customer purchases are authenticated using two-factor authentication, reducing the likelihood of a fraudulent transaction occurring.

Best Practices for Fraud Protection

It is always recommended that businesses implement best practices for managing their High Risk Merchant Accounts to reduce the likelihood of fraud. These include:

  1. Establishing clear customer policies on refunds and returns;
  2. Keeping up-to-date with new payment technologies;
  3. Utilizing 3D Secure tools;
  4. Working closely with payment processors to stay informed on emerging fraud trends; and
  5. Regularly reviewing your customer database to flag potentially fraudulent activity.

By taking these proactive measures, businesses can safeguard their business against malicious chargebacks and other fraudulent activity, while still offering customers secure payment options with their High Risk Merchant Account.


In sum, an open high risk merchant account provides businesses with the necessary secure payments and reliable customer service. It is an important tool for businesses operating in markets where there is a higher chance of fraud and chargebacks, helping to reduce the associated risk and ensure that customers are satisfied with their purchases. High risk merchant accounts come with higher fees than merchant accounts for low risk businesses, so it is important to consider all options carefully and choose the service that best fits your specific needs. With the right merchant account provider, you can protect your business and provide your customers with a safe and secure payment experience.

Send Us A Message



    More Posts