Understanding High Risk Payment Processors: What You Need to Know

high risk payment processor image

As an eCommerce merchant, you know the criticality of managing your risk and reducing your business’ exposure to chargebacks. One of the best ways to do this is by partnering with high-risk payment processors.

A high risk payment processor is a company that processes payments for merchants considered to exceed certain risk thresholds set by traditional financial services providers. But with many options in an ever-changing landscape, it’s essential to understand the ins and outs of these remittance solutions so you make informed decisions and avoid potential pitfalls. 

Buckle up as we dive headfirst into the complex yet vital realm of high-stake payment processing. We’ll discuss key factors defining a high risk business and its challenges, how a competent payment provider can help, considerations for selecting a suitable provider, and more. Equipped with this essential knowledge, you can confidently and easily navigate the murky financial waters of high-stake businesses like yours. 

Why Some Businesses Need a High Risk Payment Processor

Some businesses are classified as having a greater potential for financial risk exposure to traditional financial intermediaries due to various factors. 

Whether PayPal has dropped you or your bank has terminated your standard merchant account, a high risk payment solution provider is a welcome solution to mitigate remittance challenges unique to your business.

Characteristics of High Risk Businesses

Payment processors can label certain businesses as high-risk based on the following characteristics:

  • Selling restricted products: Certain industries, such as adult entertainment and firearms, pose many legal and regulatory challenges.
  • High volume of transactions: Significant monetary transactions increase the likelihood of costly chargebacks, fraud, and disputes.
  • Repeat offenders:  Businesses with a history of legal or regulatory violations, including money laundering, tax evasion, or other fraudulent activities, are seen as a liability.
  • Bad personal credit: Even if you operate in a low-risk industry, banks could be unwilling to welcome your business due to concerns about your credit 
  • High fraud risk: Some industries, like cryptocurrency trading, are more susceptible to fraudulent activities, making them risky for financial intermediaries.
  • Offshore company: Businesses operated in offshore jurisdictions pose a higher risk of money laundering, tax evasion, and other financial crimes, leading to increased scrutiny from regulators and financial institutions

Common Industries That Require High Risk Payment Processing

If you sell highly regulated products or services or those with a high possibility of fraud in the United States, chances are good that you need a high risk remittance processor. Affected business categories include:

  • Ticket resellers
  • Online gaming sites
  • Dating sites and apps
  • Adult entertainment
  • Cryptocurrency/Forex
  • Online gambling
  • Firearms and other weapons
  • Debt collection
  • Nutraceuticals
  • Cannabis
  • Subscription-based services

Challenges Faced By High Risk Businesses in Securing Payment Processing

Increased regulation, perceived risk of fraud, and potential legal implications mean high risk businesses experience difficulties getting approved by traditional banks or credit unions. That leaves them with fewer options, forcing them to search for specialized payment processors that cater specifically to their needs

Consider also that payment processors and banks require a considerable amount of documentation and information from these businesses to assess their risk levels accurately. That may include:

  • Financial statements
  • Business plans
  • Details of past chargebacks
  • Information about the business’s industry and target market. 

Such requirements prolong the account application timelines and can feel intrusive.And even if you manage to secure a high risk merchant account with a traditional payment solutions provider, be ready to shoulder additional financial burdens. You’ll likely pay higher monthly fees, minimum balances on deposit accounts, and per-transaction rates.

Benefits of Partnering with a High Risk Payment Processor

Specialized services for high risk industries

Reputable payment processors understand the unique challenges for merchants in high risk sectors. They offer tailor-made solutions and support that cater specifically to the needs of these industries. By working with a provider specializing in high-stake transactions, businesses get assured of service and an understanding level unmatched by conventional payment processors.

Mitigating chargeback risks

Chargebacks can be a significant concern, as they can cause revenue loss, reputational damage, and even account termination. A report by the Mercator Advisory Group revealed that one in every 2000 online transactions gets charged back. That sounds insignificant, right? Wrong! Consider that the USA alone records an estimated 60+ billion transactions a year, and you’ll get a sense of the massive scale of disputed charges’ financial implications to merchants.

High-risk payment processors have extensive experience managing chargebacks and can offer tools, resources, and guidance to help businesses minimize these risks. That includes implementing effective fraud prevention measures, providing real-time transaction monitoring, and offering expert advice on best practices for reducing chargebacks.

Access to a broader range of payment solutions

Reputable payment processors specializing in high risk industries possess in-depth knowledge of the complexities of processing transactions for such sectors, enabling them to offer various options. With multiple remittance solutions, such as credit cards, debit cards, e-wallets, and even cryptocurrency, businesses can appeal to a broader audience and boost sales.

Assistance with regulatory compliance

Compliance with relevant laws and regulations is essential for any business. However, that can be particularly challenging for merchants operating in industries flagged by conventional financial intermediaries. 

High risk remittance processors have expert knowledge of the regulatory landscape and can help businesses navigate the complexities of compliance. This may involve guiding you on managing e-commerce risks, anti-money laundering (AML), and know-your-customer (KYC) requirements.

Choosing the Right High-Risk Payment Processor

Considering the factors below, you can confidently select a high risk payment processor that meets your business’s unique needs, ensuring seamless and secure transactions for your business and customers.


You can count on a provider who understands your industry’s unique challenges and needs to provide a smoother and more efficient payment processing experience.

Fees and rates

High risk payment processors often charge higher fees and rates than their traditional counterparts. However, we recommend comparing different providers to find competitive pricing that matches your budget without sacrificing service quality. Evaluate all associated costs, including setup, monthly, transaction, and chargeback fees.

Payout timelines

High risk payment processors have varying payout timelines, which can significantly impact your cash flow. Choose a provider that offers reasonable payout schedules that align with your business’s financial needs.

Security measures

Your preferred high-stake payment solutions provider should offer robust security features such as end-to-end encryption, tokenization, and secure gateways. Additionally, verify they have a robust fraud detection system and comply with industry standards such as the Payment Card Industry Data Security Standard (PCI DSS). 

Customer service

A reliable provider should offer multiple communication channels, including phone, email, and chat support. They should also have a dedicated team of experts who can quickly address payment processing issues.

Questions you want to ask when vetting potential payment processing partners:

  1. What specific industries and business types do you specialize in?
  2. What is your approval process for high risk merchant accounts?
  3. What are your fees and pricing structure?
  4. What fraud prevention and chargeback management tools do you offer?
  5. How do you handle payment security and data protection?
  6. What kind of customer support do you provide?
  7. Do you have references from other businesses in my industry?

 Partner with a Supportive High Risk Payment Solutions Provider

High risk payment processors provide tailored solutions to businesses exposed to unique challenges due to their industry, transaction history, or other factors. By partnering with such a provider, you can securely and efficiently process remittances, maintain regulatory compliance, and minimize associated perils.

FLEX Payment Solutions lets you say goodbye to chargeback nightmares and unleash your business’s full potential with specialized high-stake payment processing solutions for your industry. Contact us for more information or a free quote and unlock the endless possibilities with a seamless, secure, and compliant payment experience.

Related Posts