02 / 08 / 20

What is a High-Risk Merchant Account?

When applying for a merchant account, some businesses might be surprised to learn that they are considered high-risk. Here, we will explain what it means to be a high-risk merchant account, as well as some of the most common reasons that accounts get labelled “high-risk.”

What is considered a high-risk merchant?

Merchant accounts are approved by banks or financial institutions, and they enable businesses to accept credit or debit card payments from customers. A high-risk merchant account is a payment processing account for a business that has been labelled as high risk by a bank.

Why does this happen? When a merchant sells products in industries that are notorious for chargebacks and fraud, banks consider them high risk. As a result, it is much more difficult for them to get a merchant account.

Who needs a high-risk merchant account?

There are many types of businesses that need high risk merchant accounts, including (but not limited to) the following: travel services, ticketing, online dating, gambling, CBD, telecom, e-cigarettes,  firearms, electronics, adult novelties, direct marketing, nutraceuticals, web software development, international business, and furniture and jewelry online.

Although these business types are clearly quite different, here are some things that they have in common that could make them fall into the high-risk category:

  • They are prone to chargebacks
  • They depend on the weather, fuel prices, commodity prices, or other circumstances that cannot be controlled.
  • They offer a free trial. Customers frequently dispute charges from businesses that follow this model, increasing processing costs
  • They sell questionable products (products that promise a more youthful appearance, more stamina, weight loss, etc.)

Aliant helps high-risk merchants!

If you own a high-risk business, you might be rejected by several of the payment processing companies that you reach out to. If this is the case, look no further! Aliant is proud to be a high-risk payment processor that can provide flexible terms and conditions. We are here to help you run your business effectively while monitoring fraud and chargebacks and assisting in keeping your costs down. To learn more or get started, click here.

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