What is the Best High-Risk Merchant Account Provider

If you’re starting a business that provides a product or a service, you’ll quickly need to wrap your head around the notion of applying for a merchant account: a business bank account that will let your company process credit card transactions and more. 

This sort of partnership requires a great deal of trust with your account provider- this is essentially a business partnership.

If your credit score has taken a bit of a tumble over the past few years for one reason or another- well, you might be a bit worried about what happens next.

You may also be entering an industry that doesn’t have the best reputation with loaners or credit providers for one reason or another, and don’t think that you will qualify for a low-risk merchant account.

Thankfully, this isn’t the end of the story: there are plenty of providers out there who work specifically with high-risk merchant accounts that can help you get started taking money- and maybe even help you take a fresh start building a cleaner credit history.

Below are some our top picks for best high-risk merchant account provider:

Moonlight Payments

Moonlight Payments offers a full suite of solutions for this type of account, and is an industry leader in providing high-risk merchant accounts to businesses worldwide.

Specializing in the Restaurant, Health & Beauty, Retail and Mobile Services industries, Moonlight boasts the holy grail for high-risk merchant account seekers, with their high security Payment Gateway Services, Online Payment Processing Software, and the massive boom of 24/7 Customer Service. 

Businesses with high-risk merchant accounts can enjoy all the benefits of online payment processing with less worrying about fraud or chargebacks, and their in-house team of experts work closely with you to ensure your business receives the best possible service at every step along the way.

We like to talk up customer service as an important factor when choosing your provider; the guys over at MoonLight Payments help you get set up quickly and most importantly, take the unique demands of your business seriously.

They also offer some great features like free trials, no credit check processing, etc.

Pros

 

• • Self-centered: Secure own payment gateway

• • Friendly voice: 24/7 customer service

• • Free trial: Try before you buy

Cons

 

• • Shop around: Not as competitive as other providers

BMO Harris

If your business is in an industry that most providers don’t like for any number of reasons, then BMO Harris has your back; specializing in getting merchant accounts for those difficult merchant accounts. 

Once you begin your journey with BMO Harris, they’re very involved in guiding you through the evaluation process; and even after you’re brought into the fold, they provide cardholder subscription migration management as well as advanced fraud protection for your merchant account’s payment gateway.

BMO Harris makes great use of a network of third-party processors and acquiring banks to secure your account.

They’re also a highly customizable provider, so price isn’t something that is disclosed at the offset – although feedback in this matter has been very positive. 

Pricing structures can also vary depending on what, you, the merchant is familiar with – whether you appreciate fixed-rate, tiered etc., the provider is flexible, and so are its associated banks – many BMO Harris partners are open to consider businesses on the MATCH list or with a poor credit rating.

The trade-off is that every high-risk merchant is then locked in for a minimum of two years.

Pros

 

• • Instant onboarding: High approval rates

• • Better security: Fraud prevention tools and consultation included

• • Globetrotting: Local and international card processing

Cons

 

• • Unknowns: Pricing not disclosed before consultation

Humboldt Merchant Services

This provider is full of features of the business looking to succeed in eCommerce.

The Humboldt Merchant Services’ payment gateway offers seamless integration with your styles and systems, and their APIs allow you simple and instant access to recurring billing features that will support any services your business happens to provide that work on a subscription basis. 

Many providers don’t like working across different currencies, which can be a real hassle for businesses looking to expand into global markets or take international customers.

Humboldt is also considered an extremely secure provider: customers enjoy all the enhanced security of in-store EMV chip card payment acceptance. 

This focus on fraud avoidance doesn’t limit your options either: businesses in the Humboldt family have the option of accepting NFC payments like Android Pay and Apple Pay, and even check and pre-paid card acceptance.

All the necessary equipment needed to make all of this possible is provided for you, free of charge.

Pros

 

• • Looking outward: eCommerce options make them ideal for globally-minded businesses.

• • Secure service: Payment gateways and payment acceptance that keep you safe from fraud.

• • Variety: Offer a multitude of payment and transaction types.

Cons

 

• • Specifics: Hard to price without consultation

Priority Payments Systems

The appeal of PPS usually comes from its low-risk payment processing services and low rates, access to terminals and POS devices- but they also offer high-risk accounts, with a vast foundation of financial institutions to support high-risk Fee structure merchants. 

Retail, personal services, restaurants; they all come under PPS’s umbrella. They boast that their high-risk merchants have access to the vast majority of the same features as their lower-risk merchants: including terminals and mobile payment processing, eCommerce support, etc.

High risk accounts face the same problem as usual: pricing is not listed on their site, and these fees are decided on a case-by-case basis- although you can certainly expect them to be higher.

In contrast however you won’t have to worry about account setup fees, and say goodbye to inflexible long-term contracts. Early termination fees still apply.

Pros

 

• • Hardware included: Terminals and POS systems part of the deal

• • Trusted: Excellent reputation

• • Fair-priced: Low-cost echeck/A

Cons

 

• • Tied-in: Equipment requires long-term contract 

How To Choose A Reputable High-Risk Payment Processor (Buyer’s Guide)

The merchant accounts above are some of the best that are currently available on the market. But, when you are making a decision as big as this one, there are a lot of things to consider before you choose a merchant account. 

To help you make your decision, we have put together this guide full of important information about high-risk payment processors. So, keep on reading to find out more… 

Compatibility With Other Merchants In Your Industry

Making sure that your provider is familiar with, and willing to work with businesses in your industry has its advantages.

If you own a business in an industry that is considered innately ‘high-risk’ then you want to know that your provider is familiar with the unique nature of your typical transactions; this will also make them better at detecting fraudulent activity.

Many high-risk merchant account providers have a high-risk specialty (including many of the providers recommended above) such as firearms, tobacco, holidays, or adult entertainment.

Other clientele from the industries in question with any given provider also says a lot about the potential success of your business with that provider.

Customer Services Availability

High-risk sectors usually face more issues regarding their payments: but hopefully, you and your provider both knew that going in- that’s why you’re considered high risk after all.

Still, the onus is on your business to reduce these instances to the bare minimum, or face having the rug pulled out from underneath you by a jittery account manager. 

This is where customer relations come in. A provider having great customer services, such as a reliable phone number or a quality online live chat – or even a dedicated manager for your account- will make it so much easier to manage your account and services.

The best customer services are always knowledgeable, dedicated to your cause, and are easy to reach. Pay close attention to customer reviews for their experiences with any given provider’s front-of-house team.

Payment Gateways

Fraud is one of the biggest challenges you will encounter as a merchant; and with methods of fraud becoming more and more sophisticated, online payments continue to be a particularly vulnerable method of carrying out transactions.

If your industry is high-risk there’s a possibility that your industry is also a popular working area for scam artists and fraudulent activity. 

When selecting your merchant account provider, don’t be afraid to question their experience with taking online payments in your industry, and whether their payment gateway is up to the task of working with high risk merchant transactions.

Question what their plan is to reduce fraud transaction practices and chargebacks.

Security

In the information age, making sure that the data of yourself, your business partners and your customers is secure is an absolute must- and of course, this is doubly important if you work in a sensitive industry.

Aside from the aforementioned payment gateway, your high-risk merchant account provider must follow all the most rigorous security measures and practices. 

Question your potential future payment provider on the security, as well as the practices of any partners they align themselves with to provide you with your service.

Data encryption and secure firewalls should be standard, and an array of anti-fraud tools should be available to you at your convenience.

Fraudsters will also be seeking to exploit any business owners without adept chargeback prevention measures, so make sure that is also included as part of your plan.

Customization 

Many account providers won’t disclose pricing for high-risk merchant accounts on their site or at the offset of an application, citing the specific needs of each business and their range of customizable features to suit each account.

If you work in a high-risk industry, it’s far more likely that you’ll require a bespoke merchant account service that suits the specific needs and quirks of your industry.

When selecting a provider, choose one which can suit their rates, service, products and features to your business needs, the current position of your company and your short and long-term objectives.

The more complicated your business model, the more vital to your company this aspect of your merchant account is.

Transparency

As with any other potential partnership, you want your account provider to be as transparent as possible; this means that all fees and costs, whether certain or potential, are provided to you either before the offset of an application or once your provider has tailored a quote just for you.

Make sure that you understand the terms of your contract fully, and definitely don’t skip the small print: you can be sure that your provider hasn’t.

Be on the lookout for hidden costs and clauses, termination fees and notice periods etc., things that could really trip you up later on if things aren’t working out as they should.

Once again, don’t be afraid to bring these things up with your account manager- how up-front they are with this information is also an excellent measure of the level of customer service transparency you can expect.

A high level of professionalism should be expected across the board for your provider. This includes keeping an up-to-date website of policy changes and new occurrences- discrepancies between their advertised products and what is actually offered should be considered a major red flag.

Frequently Asked Questions

What Is A High Risk Merchant Account?

A high-risk merchant account (sometimes ‘bad credit merchant account’) is issued to companies with low credit scores or bankruptcy in their credit history, or to ventures in industries that are considered ‘high-risk’ due to their nature.

Businesses designated as ‘high-risk’ will pay higher fees and go through extra scrutiny in order to obtain merchant services because of the aforementioned risk factors.

Definitions of what is high-risk varies between merchant account providers, although with certain ‘sensitive’ industries such as adult entertainment or tobacco you can be sure that you’ll be scrutinized a lot more.

Is My Business Considered High-Risk?

You should note that when you apply for a merchant account, your business is assessed by potential providers in terms of how much risk there is involved to the bank/financial institution providing you with the account. 

Many industries are automatically considered ‘high-risk’ for many reasons, that ultimately mean that your provider has less confidence in the stability of this sector than a different industry. Some example of industries considered high-risk are listed below:

 

• • Alcohol

• • Adult Entertainment

• • Advertising Services

• • Affiliate Marketing

• • CBD Oil/Products

• • Charity Foundations

• • Credit & Debt Management

• • Cryptocurrencies

• • Dating/Escort Services

• • E-wallets

• • Events And Tickets

• • File Sharing

• • Gambling

• • Health And Wellness Products

• • Insurance

• • Jewelry, Watches & Accessories

• • Money Transfer

• • Nightclubs

• • Online Auctions

• • Payday Loans

• • Ppi Merchant Accounts & Services

• • Prepaid Phone Cards

• • Pyramid Selling

• • Software Downloads

• • Tattoo Studios

• • Timeshares

• • Tobacco And E-cigarettes

• • Travel And Tourism

• • Vehicle & Parts Sales

• • VPNs

A business may also otherwise be considered high-risk if you or other financial directors in your company have poor credit or bankruptcy in their business history.

Who Are High-Risk Merchants?

What categorizes a merchant as high-risk can vary between providers- however, some standards exist for labeling a business in this way and can be used to judge your company’s eligibility either way.

A business that is considered low-risk, and therefore preferable to a provider will have indicators such as:

 

• • Conducting business in just one currency

• • Selling products that are considered ‘low-risk’, such as everyday household goods

• • Being a well-established business with multiple years of good credit history

• • Earning a respectable & stable but small revenue per month

• • Low average credit card transaction amount

• • Low chargeback frequency 

• • Preventing fraud via 3D Secure technology

A high-risk merchant will have indicators that include:

 

• • Transactions conducted across multiple currencies.

• • A new business without reputation

• • Poor reputation due to sensitivity of services (adult industry, debt management etc.)

• • Poor credit rating or past bankruptcies

• • High chargeback rate/history of being frauded 

• • High or unstable monthly sales volume

• • High average credit card transaction amount

Why Are High-Risk Merchant Services Different Than Traditional Merchant Accounts?

The simple fact of the matter is, many industries rely on high-risk merchant accounts to survive, and they are a perfectly legitimate part of everyday businesses. There are also many benefits to having a high-risk merchant account that low-risk merchants simply do not have access to. 

Having a high-risk account means that you are not as restricted with the range of products and services you are allowed to provide, or by the type of revenue you collect electronically.

You can also process recurring payments, high sales volumes for special transactions or launch events, which are sometimes possible with low-risk merchant accounts but are almost always possible through high-risk ones.

High-risk merchants are also far more easily able to do business abroad, as they can accept international transactions. They are not as limited when accepting international currency, meaning a company can expand to compete in global markets.

That being said, there is of course a price to be paid for this freedom- namely, a higher price. Transaction fees are notably higher than their low-risk counterparts; this includes the fees involved with the creation of your account in the first place.

Settlement periods are longer to reduce the potential for a chargeback, sometimes as long as a week. Similarly, a rolling reserve in the form of a portion of your transactions is used as a buffer against chargebacks by your bank.

How Much Does A High Risk Merchant Account cost?

This entirely depends on your provider, and usually depends on a unique quote tailored to the specifics of your business.

High-risk merchant providers rarely provide pricing in their advertising or at the outset, so you’ll have to engage with the customer service or application process of each provider you try to determine which one has the best deal for you.

One thing you can be certain of though- a high-risk account is much more pricey than a low-risk account.

How Do I Get a High Risk Merchant Account?

Reach out to a provider. After the acquiring bank approves an account, send them the following documentation to apply for a high-risk merchant account (although this may vary provider-to-provider, case-by-case):

 

• • Incorporation certificate

• • Recent bank statement displaying company name and bank account information

• • Company director ID

• • Organization structure

• • Shareholders’ certificate

• • Applicable business licenses

• • 6 months worth of transaction/processing history

A website for your business must clearly present the following to support your application:

 

• • Company’s legal name

• • Refund & returns policy

• • Customer services contact

• • Product delivery details

• • SSL certificate & HTTPS secured

Is it Difficult to Get a High Risk Merchant Account?

Here are some ways to improve your application for a high risk account: 

Good Account-keeping

Up-to-date and extensive accounting is excellent for subduing worries about your financials.

Improve Your Credit Score

While this may seem redundant, actively improving your credit by

avoiding late payments on your loans and working through debts is very good for your image.

Legal Terms & Conditions

Proving you’re working within legislation for the regulation of practices and restrictions from the offset lets providers know you understand what you’re doing and won’t get into trouble. 

Protect Yourself With Contracts

In the case of matters involving 3rd party fulfillment, cover your back with a well-worded contract.

Research To Get the Best Deal

This is still a business in itself, so wise up on the best deal by accumulating a range of quotes. Shop smartly by researching a clientele and looking at customer reviews.

Minimize Chargebacks

Implement fraud prevention measures to stop chargeback scams. Make sure that your refund policy is simple and easy to understand. This is very important for banks, so take it seriously

Look Internationally

Many providers outside the US are also reputable, and may offer a better deal. Cast the net wider to find the right provider for you.

What Is the Mastercard MATCH list?

The Mastercard MATCH list is a poor credit registry, which flags high-risk merchants to issuing banks and credit card processing services about before they issue a loan or credit to them.

Financial institutions will likely choose to decline your application as to not subjugate themselves to risk, which is one of the reasons you may end up pursuing a high-risk merchant account provider.

Learn more on high risk merchant processing by visiting our merchant library article hub.