A high risk merchant account is suited to businesses who operate in verticals that may be deemed risky (gambling being a large one). If you opt for one of the high risk merchant account providers then you will be subject to higher fees as a result of the increased risk involved. In order to determine the risk of your business, it will be carefully judged by processors with the main focus being placed on the likelihood of your business generating chargebacks. When a business is considered higher risk, the level of security needs to be higher too meaning transactions will be closely monitored for fraudulent activity.
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What can a business expect with a high-risk account? If you get approved, these are the things to look out for which are different to a normal merchant account:
- Increased transaction fees – the transaction fees you are charged vary from less than 1% to 10% depending on the provider, the industry and the type of transaction.
- More expensive monthly/ annual fees – in fact, you can expect to pay 50% more for a high-risk merchant account with monthly fees being at least £50.
- Larger reserve – high risk merchant banks will often require you to leave at least 15% of the transaction money inside your account as a reserve to deal with fraud and chargebacks.
- Increased settlement time – it will take longer for the payments to get to your account, often 1 week or more as oppose to the 3 days of standard merchant accounts.
- Higher monitoring – the potential for fraud is higher with high risk accounts so your merchant account will have more stringent security measures in place.
High risk merchant solutions are not necessarily your only option if your business has low credit as this does not necessarily mean you are in the ‘high risk’ category. Often it is the industry that is considered risky, so if you work in an industry with less risk but have a bad credit score then you can usually still apply and be accepted for a standard merchant account.
Although you will at first be subject to higher fees you can expect this to improve over time providing you are consistent and punctual with payments. Eventually, your credit score will improve and your fees will reduce. This takes time but is a good option.
There are suppliers in the market who can provide merchant accounts for those businesses which are deemed as ‘high risk’. We are going to outline 5 key high risk merchant processors below:
1) Cash Flows
- Primarily assist businesses within the following industries:
Financial services, digital entertainment, public sector and education, professional services and trade as well as online retailers.
- Offers merchant account, payment gateway and virtual terminal solutions.
- There is no pricing information available on their website, however it is quick and easy for interested businesses to contact Cash Flows for more information.
- Specialize in merchant accounts suitable for online businesses.
- Offers merchant accounts, prepaid card programs and gateway services.
- Offers pay as you go meaning no monthly or annual fees.
- The high-risk merchant account includes: unlimited sales volume, settlement twice a week, multi-currency options, low rates and ongoing risk management.
3) Radiant Pay
- Radiant Pay specializes in providing payment processing solutions to online businesses run by European, American and Asian merchants.
- Key features include; integrated merchant account and gateway, multi-currency processing, high volume bath processing, advanced fraud management, chargeback management, up to date reporting and customer support.
- Specialize in providing merchant accounts to online businesses with a focus on international transactions (automatically translating payment forms, instant conversions to local currency etc.).
- Epoch offer an all-inclusive pricing scheme with processing fees based on volume.
- High focus on security – approved Visa and MasterCard Payment Facilitator.
- Accepts a large variety of payments types from around the world
- Charge a flat fee which is a set percentage of sales as oppose to various fees e.g. transaction, monthly, maintenance etc.
“Really good support
Had great help over live chat regarding some things. Everything was solved quickly.” Eimantas via Trustpilot.
They take money, without any warnings and notifications, and do not warn that the auto payment is put automatically” Phillipp via Trustpilot.
- Specialize in providing solutions for selling online or over the phone.
- 20 years of experience with high risk merchant accounts.
- Provide merchant account and payment gateway in one solution.
- Standard high-risk account typically experiences a processing and transaction charge of 3 – 6% + 15p.
- Accepts 95% of businesses
With high risk merchant services, you can expect to pay higher fees, when deciding on a provider it is important to calculate the total cost of the account. Some providers offer appealing low monthly fees but will charge very high transaction fees or vice versa. Therefore, it is important to take the time to calculate your transaction volume and compare providers based on that information. This way you can get a clear idea of total costs and figure out the best option for your business.
Which Industries Are Categorised as High Risk?
Generally, a high-risk industry is one that has a strong possibility of fraud, refunds and chargebacks. The gambling industry is a great example due to its volatile nature as well as the travel industry which has very high cancellation rates. Compare these to a low risk businesses such as a supermarket which has a very low rate of refunds constituting a small % of the overall turnover.
- Gambling & Casinos
- Adult products and services
- Vapes & e-cigarettes
- Drugs & paraphernalia
- Payday loans
- Investment schemes
- Wellness and health products/ supplements
- Online downloads
- Web hosting
- Tech support and online development
- Software downloads
- Money transfer
- Jewellery & accessories
- Electronics incl. smartphones
- Car parts
- Tattoo studios
- Massage parlours
- Phone locking services
- Gaming hacks
If you are going to work with a specific merchant account provider who is deeming your business high risk, ensure that there are other businesses that are working with them that also reside in the same industry as you, as this will increase your chances of being accepted. For example, if you are an e-commerce site you may lean towards Radiant Pay who specialise in this or if you are working with primarily international clients in varying currencies you may choose to go with Epoch.
Finding a high-risk merchant account provider can be difficult, using our site you can instantly request quotes and compare the market to find the best option to save your business money.