If a merchant runs an online business with a higher risk of chargebacks and wants to process credit card online transactions, you need a high-risk merchant account. With the steady rise in online transactions and escalating number of businesses, start-ups are looking for cost-effective payment processing solutions to high-risk credit card processing companies. A survey said that only 19% of consumers still prefer using cash to make payments. Certain Businesses belong to high-risk industries and have inherently higher chances of fraud or chargebacks. If any Business or start-up falls into the “high-risk” category, it may struggle to find the precise payment processor. High-risk merchant accounts enable all businesses and are considered high risk to accept credit and debit card online payments.

What Is A High-Risk Merchant Account? Who Needs it?

What Is A High-Risk Merchant Account? Who Needs it?

A payment processor mechanism marks a merchant account as high risk if they’ve identified a high-risk consumer business account for chargebacks, fraud, or a high volume of returns. Businesses characterized as “high-risk” will require a high-risk merchant account to accept debit and credit online card payments. For example, Merchants with high-risk accounts pay higher processing fees for services to account for this risk. They may come asking you to pay higher fees for merchant services. There could be many other reasons —because you are a new merchant who has not processed payments before or because your industry has a high likelihood of fraud (e.g., controversial products).

Six Steps To Set Up A High-Risk Merchant Account

If you get deemed in the high-risk, finding a payment processor providing you with a merchant account at a reasonable rate can be tricky – but it’s not uncertain or impossible. The advantage of a merchant account is that it allows you to accept credit card online transactions for your business, whether online, over the phone, or in a face-to-face one-to-one situation. Starting and setting up a Merchant Account is much like opening a bank account.

Shop For A Merchant Account By Choosing Credit Card Brands To Work With.

This step sets the initial and crucial point of your journey toward the high-risk account. Begin with examining what credit card brands are essential to you. This answer depends on the demographics and geographics of your target audience.

You might only need Visa or MasterCard. If your clients come from countries with unique specific credit card brands, then make sure that the bank you want to choose for opening an account offers you such an opportunity and flexibility. Hence following questions will help you out:

  • How are you going to receive credit cards?
  • Is your business or product low, medium, or high risk of services?
  • Do you need POS( point of sale) services? (In-Store, Online, Over Phone)?

Search For A Merchant Account Provider BasedOn Your Needs And Figure Out The Payment Model.

Merchant accounts can serve your clients with various payment models, be it recurring billing or one-time payments called OTP. Examine carefully whether the bank supports both of these payment models for your type of business, and if so, find out what rate of interest and principle the bank has for you. You need to pick the preferable offers for yourself with the best service.

Evaluate The Merchant Account Providers & Compare Fees. Analyze Your Turnover.

Here is the list of most common prerequisites:

  • Application form
  • Annual turnover
  • Monthly turnover
  • PCI
  • Discount Rates
  • Per Transaction Rates
  • Batches
  • Fees of Terminal likewise Standard Terminal, Gateway Type, or Virtual (Free of cost, Purchased ones, Lease)

The rates established by banks depend on the business turnover and hence becomes important. So, be ready to provide the financial institution with all the essential documents and required services that display your financial state and card turnover within the last year, as it is crucial. Then, run the numbers and see how much it will cost you. If you process $2500 a month with an average ticket size of $45, Try 2 or 3 different scenarios and possibilities. It will help you determine the total fees. It is necessary to find the pricing structure best for your needs.

Apply For An Account By Completing An Application & Start Looking For a Bank

Apply For An Account By Completing An Application & Start Looking For a Bank

Depending on a business model, product consumed transaction model, and risk types, you can be asked to present those different or additional documents. Moreover, it is often recommended for clients to open a merchant account with a local bank meaning the bank that gets under the same jurisdiction the merchant’s business is registered and signed. The best is that it offers the best rates and traffic performance. Therefore, before one studies his international options, look for a local bank to collaborate with to get the best possible benefits.

Gathering All The Documents

The next step would be compiling all the documents and submitting them to the signed bank. These documents should be a detailed list of all the business activities conducted with a summary, a voided check for the checking account section, and tax returns of transactions. The list might vary from bank to bank, with new documents added to the list as per requirements.

Submit An Application Form

Approval, Setup, and Install. Finally, fill out an application form for the account in question provided by the bank. Once you submit the form with every previously gathered document and fulfill the requirements, the bank will check your application form and make a final notice. As your bank sets up your requested business account and approves the application, you can start processing and receiving credit card online payments.


There are several possible reasons why your business gets contemplated with greater risk. The definition of high risk varies from one merchant to another and one processor to the next. Such a high-risk merchant account enables some businesses to consider high risk to accept credit and debit card online payments feasibly. The process gets simplified without headaches and uneven risk factors if you set up a high-risk merchant account through a reliable payment platform with proper procedures. There are businesses with a higher chance of disputes, so high-risk accounts understand to come with stricter terms in the red line for the bank. However, when you accept and receive payments through a reliable high-risk payment processor that keeps security at the forefront, you can rest assured that the risk of chargebacks and fraud gets minimized, at least.