What You Need To Know About High-Risk Merchant Accounts

high-risk merchant services.

Every business these days gives you the option to pay through credit cards. To process the payment coming from those credit cards, you need a merchant account. A merchant account acts as the bridge between the money you get from your customers and your bank account. Now, there are two types of merchant accounts: high risk and low risk. Let’s find out if you fall into the highrisk merchant account.

What is a high-risk merchant account?

If your business witnesses’ higher risks of fraud or charge backs, then you fall under the high-risk merchant accounts. The designation of your merchant account has great significance as it determines your credit card processing fee. These merchant accounts attract tiered pricing to make up for the risk of possible charge backs.

Charge backs result in losses for the payment processor. So, they charge a payment processing fee for every transaction to make up for the risk.

How is a high-risk merchant account different from a low-risk merchant account?

Here are how high-risk merchant accounts are different from low-risk merchant accounts. So, you can expect these pointers from high-risk merchant accounts.

  • The longer Contract term:High-risk merchant accounts have to sign up more extended contacts as compared to low-risk merchant accounts.
  • Higher pricing:High-risk merchant accounts are charged a tiered pricing system, whereas low-risk merchant accounts attract interchange-plus pricing. High risk credit card processing attracts a higher processing fee than low-risk accounts.
  • Greater charge back fee:If you have a high-risk merchant account, you need to pay higher charge back fees in case of a charge back.
  • Automatic renewal of term: Payment processors often include an automatic renewal clause in the contract. It renews the contract if you don’t give prior notice.
  • Account terminations:High-risk merchant accounts often witness account freezes or in worst cases, terminations. It results in the inability to accept payment through credit and debit cards.

Which businesses come under the high-risk merchant category?

The following types of businesses are considered as high-risk merchants:

  • Credit score: Businesses that have a bad credit score. It shows that they are unable to manage their finances.
  • Account history: Higher rates of charge backs and cases of frauds can also make you fall under the high-risk category of merchants.
  • Experience:If a business has fewer years of experience in payment processing, it is often considered to be high-risk.
  • Location:Location of the business is another important criterion. Businesses outside of countries like the USA, UK, Australia, and Japan are considered high-risk.
  • Type of products:Products like software, real estate, airlines, and telephone services are of the high-risk type.
  • The amount of cost purchase: Payment processors always check the cost purchases of businesses. If it’s high, then those businesses fall under the high-risk accounts.

Things you should do if you have a high-risk merchant account:

  • Make sure that your credit score improves over time.
  • Check your customers for signs of fraud.
  • Read your term contract with patience and care.

Make sure to take help from good high risk merchant services.


Even if you have a high-risk merchant account, you can improve your credit score and become low-risk. By being a little extra-cautious, high-risk merchant can make the transition to low-risk easily.



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