Five things to know about High Risk Merchants and Credit Card Processing

May 4, 2020

Just because your business is labeled as ‘high-risk’, it does not mean that the door to credit card processing is closed to you! Whilst many traditional banks and payment providers may not want your business, there are credit card processing companies who are set up differently to meet the specific needs of a high-risk business.


What is a High-Risk Merchant Account?

A high-risk Merchant Category Code (MCC) is applied to your business if the product or service you supply is associated with an industry that has either stringent regulations, increased likelihood of fraudulent purchases or disputed card transactions (chargebacks). These companies can quickly face two problems – opening a Merchant Account, which they need from an acquiring bank to accept credit card payments secondly finding and a specialized payment processor who is experienced in dealing with high-risk businesses.

Girl Making an Online Purchase Sitting In Her Robe

What is High-Risk Credit Card Processing?

High-risk credit card processing is offered by processors who are willing to work with industries including Vapes, e-cigarettes and tobacco, Firearm ammunition and accessories, nutraceuticals, and supplements and Cannabidiol (CBD) to name a few. Due to the increased risk factors involved with these businesses such as increased chargebacks, credit card processing companies will often charge higher fees. So, what do you get for your money? There are five key benefits of working with a high-risk processing partner.

vape merchant processing

1 – More likely to get a Yes

A high-risk processing partner is built differently from a mainstream bank and better understands high-risk businesses. They may well be your only way to open a Merchant Account and unlock the benefits of card acceptance.



global payments processing

2 – Sell globally

High-risk processors are generally more flexible on the limitations they place on card transactions in comparison to traditional or low-risk processors. For example, they will not prohibit Card-Not-Present (CNP) transactions, transacting in multiple currencies or restrict you from selling globally to countries outside of the US, Canada, Western or Northern Europe, Japan or Australia.

3 – Ease the credit burden

What you may not know is that your Merchant Account Provider effectively issues you with a ‘credit’ when they release funds from your credit transactions. However, a customer might then dispute a transaction and raise a chargeback. It is then the Merchant Account Provider who issues this refund immediately to the customer while the chargeback is being investigated. So, your processor is helping by taking on that ‘credit’ burden, particularly with the potential losses that can be incurred because of increased chargebacks.

4 – Helping your business grow

Working with a high-risk processor can give your business greater earning potential, whereas traditional processors may limit the type and amount of revenue low-risk merchants can generate via credit cards. For example, they cannot offer you recurring payments, the ability to process more than $20,000 per month or accept individual credit card transactions over $500.

5 – The sky’s the limit

Donald Kadson, of T1 Payments, specialists in credit card processing for high-risk merchants, explains: “From a high-risk processor’s perspective, enabling a high-risk merchant to accept card payments is a win-win for both parties. High-risk businesses often generate greater revenues and their potential for growth is further increased by card acceptance. We can help them by providing their merchant account, placing less restrictions on how they do business and processes their payments. We unlock those additional sales for high-risk merchants, so the sky is the limit.”


High-Risk Merchant Processing can be complicated, our experts are on hand to assist you with every aspect regarding your credit card processing needs. Contact us today or Apply now! We look forward to hearing from you.