We live in a digital era, and most customers prefer to make online payments due to the benefits of doing so. Due to this trend, it has become a norm for most businesses to set up merchant accounts and allow their clients to make payments quickly. However, setting up an account is not always a straightforward process for the companies that are regarded to be risky. High-risk merchant accounts involve a lot of formalities, and it is more difficult than setting up a standard merchant account for regular businesses. It is vital to understand all the important things about setting up this kind of account if your business falls into the risky category.

Acquiring a high-risk merchant account from The Southern Institute payment processing is not an easy task, and that is the ugly truth. It is understandable to some extent since no entrepreneur likes to put their business on the line for a company they cannot trust even if the opportunity at stake could end up being lucrative. With the high risk at stake, it is common to see merchant account providers rejecting applications from these businesses. This poses a significant challenge to risky business owners since having a firm where you cannot accept credit cards will hinder its scalability and growth.

Is Your Business High Risk?

One thing that you should understand is that while one merchant provider might consider your business to be high risk, another may not. Merchant account providers have different policies and finding one that accepts applications from firms in your line of business should be your top priority. If a company is declined a merchant account, it simply means that the provider sees you as a risk and cannot accommodate you. Credit is the lifeline of these providers, and for one to sell on credit, they need to have good accounts to sustain the business and process these payments. Some of the common reasons why some businesses are regarded to be high risk are high sales volumes, the company’s dealings vulnerability to fraud due to chargebacks and dealings with illegal products and services. Here are some of the major categories that summarize the businesses regarded as high risk;

  • Your firm may be dealing with activities that are regarded to be risky such as the sale of illegal commodities, gaming and tickets among others.
  • Your company may not be registered with the regulatory board or may have been blacklisted by other merchant account providers due to previous fraudulent activities.
  • If your company sells a lot of commodities that are to be delivered to the customers at a later date, for instance, online retail stores. These firms are regarded as high risk since most of the customers will pay for their commodities and receive them at a later date, and if the business shuts down, these customers will claim their money back since they have not received the products.
  • A business that is based in one country and is owned by another that is based in another country.

What Are The Charges For The High-Risk Accounts?

Since merchant providers that accommodate high-risk businesses are putting a lot on the line, the charges will always be higher than the standard merchant accounts. This is because the service provider is assuming a huge risk by offering your business this service due to the uncertain credit history, possibility of huge chargebacks and fraudulent cases. The initial set up fee is much higher than that for a regular merchant account, and it is essential to be prepared for these inflated costs. The processing fees will also be higher with the MDR rate starting from about 2% as opposed to the usual accounts which set off from about 1.5%.

Online Businesses

Most of the e-commerce sites today are regarded to be risky by some merchant account providers because the users cannot present their credit cards physically when making a payment. This increases the risk factor since the web has many scammers and malicious people who are always looking for loopholes where they can beat systems and get money or commodities for free. This is one reason why e-commerce websites have higher transaction fees. However, businesses are stuck between a hard place and a rock since restricting the use of credit cards online may ward off customers who prefer that as their mode of payment.

Finding A Reliable Provider

If your business is classified under the risky ones, you may be required to do some digging before finding a suitable merchant account provider. While there are some merchant account providers specialized in high-risk payments, not all of them are suitable. The golden rule of finding an appropriate account provider is going through all the policies and regulations stated by an account provider before choosing them. The most important details that you need to look out for are the fines, taxes, transaction charges, miscellaneous fees and any other monetary feature associated with that account. Note that most service providers may vary their fees from one business category to another and you should verify that you are correctly categorized so that the terms you get apply to your business.

Signing up for a merchant account is a huge decision and take time to go through all the details. It may take more time that it would have had it been a regular account, but the benefits are more important than the process. Your business will lose a lot if you cannot receive payments electronically and you should go through the process patiently.


While your business may be regarded to be a high risk one, you can do a few things and help to reduce these risks. If you were blacklisted for some reason, try and find out where you can do anything to clear your business name. Ensure that you are registered by the regulatory agencies and any other thing that can lower your risk as this will save you a lot of money. Finding a high-risk merchant account service provider is a hard thing, but it is not entirely impossible.

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