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What Is High Risk Credit Card Processing?

High-risk processing is a type of credit card payment processing that’s often referred to as “chargeback-friendly” or “chargeback-protected.” High risk credit card processing allows merchants to accept payments with virtually no risk of chargebacks or fines from their payment processor. This is particularly important for merchants who accept payments through platforms like Square, PayPal, Shopify and more — because these services are often not available in all states.

What is high risk credit card processing?

High risk credit card processing refers to the use of a credit card processing machine that has been designated as such by your bank or financial institution. If you’re unsure whether or not your business qualifies as high risk, it’s best to check with your bank before applying for a merchant account.

High risk merchants typically fall into one of two categories: those with poor credit histories and those who provide products or services that are considered “risky” by their banks (e.g., firearms sales). To find out more about what makes a business qualify as high risk, read below!

Why are high risk credit cards so risky?

High risk credit card processing is a good option for low-volume merchants. If you have a small business and only process a few hundred transactions per month, it’s unlikely that the additional fees associated with high risk processing will be worth it. However, if your sales volume is higher and/or more unpredictable than usual–for example:

  • You sell gift cards or other prepaid products in person at events or conventions
  • You sell products online but don’t have an established customer base yet (e.g., Amazon FBA resellers)
  • Your business operates in industries like healthcare or construction where there are many contractors who rarely use traditional bank accounts

Who should use high risk processing?

High risk processing is for businesses that don’t have a lot of credit card transactions or even those that want to accept credit cards but can’t get a merchant account from a bank or payment processor. It’s also good for those who want to expand their business and offer customers more payment options than just cash or check.

Can any merchant accept high-risk credit cards?

High-risk processing is not for every merchant. If you have a small business with low volume or are just starting out, high-risk processing might not be right for you. You’ll need to consider whether the additional fees will outweigh the benefits of accepting high risk payments.

If your business has a large number of transactions, however, then high risk processing could be worth exploring–especially if it means lowering your costs overall by allowing customers who want to pay with their cards but can’t due to their poor credit histories or a bad history with past bills.

Is there a solution for low-volume merchants who can’t afford to process with a bank or payment processor?

If you’re a small business that processes less than $1 million in annual sales, it can be difficult to find a credit card processor that will work with your business. Banks and payment processors often require up-front costs of thousands of dollars as well as monthly minimums–and even if they don’t, the rate they offer may not be competitive with other providers.

That’s why some merchants choose to process high risk transactions (i.e., those made by customers whose credit history isn’t perfect). This means accepting cards from customers who have been declined by banks or payment processors due to past issues like late payments or bankruptcy filings. While this type of processing does come with some additional requirements and fees, it also offers significant savings compared to traditional bank-based services because there’s no requirement for an upfront deposit or monthly minimums–just one flat per transaction fee!

There are ways for small businesses to accept credit card payments without incurring high fees.

There are ways for small businesses to accept credit card payments without incurring high fees. The first is by using a payment processor, which will allow you to accept cards through your website or mobile app. This is ideal for e-commerce businesses and those who sell products online.

Another option is using an online service like Stripe or PayPal that allows merchants to take payments directly from customers’ bank accounts with no additional fees; this eliminates the need for third-party processors and reduces costs significantly since there’s no markup on each transaction. Additionally, many of these services offer free apps that can be downloaded onto smartphones in order to make it easy for customers who want to pay via their phone regardless of whether they’re shopping online or not (eBay offers its own version called eBay Now).

The last method we’ll cover involves installing point-of-sale (POS) systems at physical locations where customers visit often enough so as not only to save money but also to increase sales volume over time if done correctly – retailers such as Starbucks use this model successfully every day!”


We hope this article has helped you understand what high risk credit card processing is and how it works. If you’re looking to accept credit cards as a small business owner and don’t want to pay exorbitant fees, we recommend checking out our low-cost payment processor, PaySimple. It’s easy to get started with PaySimple by signing up online or over the phone–and once you do, they’ll provide all the hardware (like a POS system) needed for your company!

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