High-Risk Merchants and Credit Card Processing: Five Things to Know


May 4, 2020

The global retail eCommerce market is a multi-trillion industry. By 2026, cross-border B2C eCommerce sales are projected to generate $4.8 trillion dollars. If you want to increase sales and boost business growth, you should offer your products and services to an international customer base. Enabling online payment solutions like credit card processing can help eCommerce merchants cater to international customers in different corners of the world, generating more profits for your company.

For high-risk merchants, credit card processing can be a challenge. These businesses need a merchant account, and when a company applies for one, acquiring banks will analyze them to determine the profitability of working with them. If banks assign you a merchant category code in a high-risk industry, your business venture immediately becomes more complicated. Banks and payment companies often refuse to provide credit card processing services to high-risk merchants to limit liability exposure.

Why are Some Businesses Labeled High-Risk?

While risk is an inherent element of the business world, some industries have even more barriers to your company’s growth. Your company’s financial health and the industry you operate in are the most important criteria banks analyze to determine how risky it is to work with your business.

If your industry is regulated or under-regulated, has reputational issues, and experiences high rates of fraud and chargebacks, banks will perceive you as a high-risk merchant. Most banks and payment processors don’t work with businesses in high-risk industries to avoid legal trouble, reputational damage, and financial loss. These merchants instead partner with specialized payment companies that provide high-risk credit card processing services.

What is High-Risk Merchant Credit Card Processing?

Getting labeled as a high-risk merchant does not mean the doors to credit card processing close completely. While most banks and traditional payment providers may not work with you, there are specialized processing companies that can help high-risk merchants conduct credit card transactions. These processing companies employ different methods and tools ⎼ like maintaining rolling reserves and using fraud mitigation software ⎼ to help high-risk businesses accept credit card payments from customers.

A man using his laptop to make an online credit card payment

High-risk merchant credit card processors ⎼ like T1 Payments ⎼ can work with any legal business shunned by banks and other payment providers for being too risky. High-risk merchant account providers can help any business process credit card payments with ease, from vape/e-cigarette to nutraceutical and adult entertainment businesses.

So, what do you get for your money? Here are five key benefits of working with a high-risk payment processing partner:

More Likely to Get Accepted

High-risk credit card processing companies are developed exclusively to serve the payment needs of businesses in riskier industries. These payment providers have the knowledge, tools, and industry insight to mitigate the liabilities of working with high-risk merchants. Many high-risk merchant credit card processing companies have extremely high approval rates.

Sell Globally

High-risk processors are generally more flexible on the limitations they place on credit card transactions compared to traditional, low-risk processors. High-risk payment processors do not prohibit transacting in multiple currencies or most foreign countries. Many high-risk merchant account providers ⎼ like T1 Payments ⎼ work with multiple banks around the world, enabling global payment processing to help you serve international customers.

Reduce Fraud and Chargebacks

Many businesses are classified as high-risk due to higher than average rates of fraud and chargebacks in their industry. Excessive chargebacks and friendly fraud can devour a company’s profits, threatening business viability. Specialized credit card processors employ state-of-the-art fraud mitigation software technologies for reducing chargebacks to protect your high-risk merchant account and improve your business’s profit margins.

Secure Payments

A white padlock icon in front of computer code

Increasing rates of cybercrimes necessitate the adoption of secure payment networks to protect customers’ credit card information from criminals. High-risk merchant credit card processors understand the perils of operating in risker industries and have implemented cutting-edge solutions to boost data security. High-risk merchant account processors like T1 Payments use PCI-compliant payment platforms to secure their client’s credit card transactions.

Boost Business Growth

For many businesses, working with a high-risk processor is the only solution they have to accept credit card payments. High-risk merchant payment processors can also increase your business’s earning potential by allowing recurring payments, the ability to process more than $20,000 per month, and by accepting individual credit card transactions of over $500.

Partner With T1 Payments to Help Your Business Thrive

If banks labeled you a high-risk merchant and declined to provide credit card processing services, we can help. T1 Payments is a high-risk, global payment processor, enabling businesses that operate in these industries to accept credit card payments from customers all around the world. Contact us now to learn how our high-risk merchant credit card processing services can help your business grow beyond borders.