Who Needs a High Risk Merchant Account?

Service provider accounts are required to ensure that a enterprise to accept credit card payments. As a service provider, there are two places you can acquire a merchant account; a bank, or a third party provider. For online gaming merchant account and payment gateway merchants the most popular, and in most cases price efficient, source is from a third party service provider account provider.

A high risk merchant account is required by companies that, when compared to a ‘traditional’ goods/services business, are at a higher risk of:


Fraudulent Transactions

High quantity of gross sales

High rate of refunds

High rate of charge-backs

Other reasons a service provider could also be categorized as a high risk are:

Retailers Location – Some merchant account providers won’t settle for retailers from certain countries.

The Product/Service the service provider sells is illegal in some jurisdictions.

Merchant Credit History – Some suppliers will not accept merchants with poor or no credit history.

Because of the high risk classification, most banks won’t provide a service provider account to these in a high risk business (resembling adult leisure, reproduction items, pharmacy and many others). As such some third party providers offer their providers to each common retailers and high risk merchants.

Merchant account providers which have been developed to service high risk merchants will generally present a higher level of fraud protection, in order to lower the price their merchants incur. However, with the intention to cover the higher degree of risk, rates for a high risk merchant account will always be higher than their decrease risk counter-parts.

When searching for a high risk service provider account, there are a number of factors that you must take into account. Rates will probably be one of the crucial necessary factors, and this consists of charges for refunds and cost-backs, along with transaction charges, the low cost rate and ongoing fees. Then you will want to think about fraud protection, customer service and reporting available to you as a merchant.