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How To Choose A Credit Card Processor As A High Risk Merchant

Credit Card Processor

Only 9% of Americans use cash to pay for purchases, meaning that as a business in today’s modern world, you need a reliable credit card processor to process payments successfully. However, this isn’t always easy for high-risk merchants.

This can be especially frustrating. Your business deserves access to high-quality payment processing services just as much as any other type of business.

What do we mean by a high-risk merchant, though? High-risk merchants include businesses such as adult entertainment, firearms, and cannabis. They can also include those with a history of chargebacks or fraud. Most traditional payment processors hesitate to work with high-risk merchants. It’s understandable due to the increased risk and potential for financial loss.

However, that doesn’t mean you should be denied access to safe and reliable payment processing services. It also doesn’t mean there’s no hope. Some payment processors specializing in high-risk merchants can provide you with the services you need.

This comprehensive guide will walk you through your options. Then, we’ll explore choosing the best credit card processor for your high-risk business. Whether you’re looking for a payment processor that offers chargeback protection, fraud prevention, or other services, we’ve got you covered.

What’s A Credit Card Processor?

credit card processor is a financial institution

First thing first: what the heck is a credit card processor, and why do you need one? A credit card processor is a financial institution. They’re responsible for processing electronic payments through credit and debit cards. A processor authorizes and transfers funds from the cardholder’s account to the merchant’s.

It’s an essential part of any business that accepts card payments. As a high-risk merchant, choosing a credit card processor requires careful consideration. A good processor will provide businesses with a reliable, secure payment platform. The goal is to offer accurate, fraud-free transactions.

For any business, there are various factors to consider when selecting a processor, such as:

  • Transaction fees
  • Chargeback handling
  • Customer support
  • Security features

However, a high-risk business may have to pay higher processing fees than a low-risk merchant due to the increased risk of fraud and chargebacks.

Aside from that, you might also need to comply with certain regulations to protect customers’ sensitive data. A good example of this is PCI DSS (Payment Card Industry Data Security Standard). A good credit card processor will be PCI compliant. This means they offer encryption and tokenization features to safeguard against fraudulent activities.

In summary, a credit card processor is vital to a business that accepts electronic payments. Choosing the right processor requires careful consideration of:

  • Costs
  • Security features
  • Regulations

What are you looking for? A secure, reliable payment platform.

Common High-Risk Merchant Accounts

High-risk merchant accounts fall outside the conventional credit card processing rules. Most people assume this refers to “illegal” businesses. However, that’s not always the case. A high-risk merchant is any business that has a high likelihood of:

  • Chargebacks
  • Fraud
  • Customer dissatisfaction

Thus, they pose a higher risk to credit card processing companies. These merchants require specialized services that cater to their specific needs. Here are some o the common high-risk merchant accounts and what to consider before choosing a processor.


Marijuana businesses have limited banking options due to the federal laws surrounding marijuana. Most banks are federally insured. So, they can’t services companies that engage in illegal activity. Yep, this even applies to medical marijuana.

If you own a business in this industry, you must find a specialized credit card processor willing to work with you. When choosing a processor, verify that they can process payments for online and offline transactions. Also, ensure the processor is compliant with all medical marijuana regulations. This includes age restrictions and inventory control.


Firearms are another high-risk category that requires specialized credit card processing. Unfortunately, there’s a high potential for chargebacks related to firearm purchases. So, many payment providers refuse to work with firearm merchants.

What can you do? Find a processor that specializes in firearms. They’re usually familiar with state and federal regulations.

Also, consider the processing fees charged, integration options, and the ability to process all types of transactions. Overall, it pays to learn more about firearm merchant accounts before selecting a payment processing company. This is the case when selling any highly-regulated product.

Credit Repair

Credit repair is iffy across the board. Credit repair companies face higher scrutiny from credit card processing companies. This is due to the high risk of fraudulent credit repair activities. When choosing a processor, ensure they’re registered with the Federal Trade Commission and are familiar with credit repair laws.

Adult Products

Retailers of adult products and services are often considered risky by credit card processors. This is the case whether you sell adult toys online or offer in-person services at an adult club. What’s the big deal? It’s mostly due to potential legal issues. However, this industry also has a higher risk for chargebacks and fraud.

Do you run an adult business? You’ll need to comply with strict age verification requirements, privacy regulations, and card brand rules. As a result, you need a credit card processor that can provide secure, reliable, and discreet payment processing services.

Pawn Shops

Pawn shops are often considered high-risk merchants due to the risk of fraud and theft. This is due to their business model. With high-value items and a steady cash flow, pawn shops are a hot target for fraudsters. They must also comply with strict regulations and state laws.


Finally, supplement sellers are also often high-risk due to a lack of regulation and industry oversight. Supplements may contain unsafe ingredients or make false health claims, leading to high chargebacks and legal issues. Supplement merchants must also comply with the FDA regulations, which adds an extra layer of complexity.

If you operate a supplement business, look for a credit card processor familiar with the regulatory requirements and can help you manage chargeback risk and fraud. And remember to follow all industry regulations.

Are You A High-Risk Merchant?

credit card processor as a high-risk merchant

Now, we’re about to dive into how to choose a credit card processor as a high-risk merchant. However, it’s important to identify if you’re classified as high-risk.

As you’ve learned, a few factors can contribute to this label. Some industries, such as online gambling or adult entertainment, are high-risk due to their sensitive nature. Due to the transactions, there’s a greater likelihood of chargebacks or fraudulent activity.

However, even if you’re not in one of these industries, payment processors may still consider you high-risk based on other factors.

For example, you may be at high risk if your business has a history of frequent chargebacks or operates in a heavily regulated industry. Certain business practices or products/services can also increase your risk level. For instance, all of the following can elevate your risk level:

  • Offering subscriptions or recurring billing
  • Selling expensive items
  • Operating on a global scale

Who has the final decision? It’s up to each payment processor to determine. However, if you know the factors contributing to this label, you can better prepare yourself for the application process. Doing so can help you potentially avoid being denied. It can also help you know where to start your search.

The Importance Of A Good Payment Processor

Don’t think this applies to you? Think again. Even as a high-risk business, you need high-quality credit card payment processing. That’s right; it’s a necessity. A good payment processor is your gateway to the financial world.

Basically, the right payment processor can positively impact your business and improve your bottom line. If you’re not convinced of that yet, here’s why having a good payment processor is crucial for high-risk merchants.

Customer Service

One of the most important benefits of having a good payment processor is the support it can provide. A dedicated and knowledgeable customer service team to troubleshoot technical and payment issues can differentiate between a happy customer and a lost sale.

Furthermore, any downtime can be costly for any business. A responsive customer service team can help you quickly recover from technical glitches or outages. This is all part of keeping your business running smoothly.

Alternative Payment Options

The ability to offer customers multiple payment options is another way a good payment processor can help you increase sales and retain customers. Customers expect to have the convenience of choosing how they want to pay, whether through debit or credit cards, PayPal, or e-checks.

A payment processor that caters to these different payment preferences can make it easier to attract and retain customers who want to pay in various ways.

Integrated Payments

Integrated payments are an excellent way to streamline your workflow and reduce the time it takes to process a transaction. With an integrated payment system, you can manage all aspects of your business from a single location. It can also significantly reduce the risk of human error by automating transaction processing, allowing businesses to focus on their core operations.

Growth Flexibility

Finally, a good payment processor can offer growth flexibility for high-risk merchants. As a high-risk merchant, you may experience significant fluctuations in sales volume due to the nature of your business. With a credit card processor, you can adjust and scale up or down your processing capacity to meet your changing business needs.

This flexibility can enable businesses to access financing options. It can also help you manage cash flow better.

How To Choose A Credit Card Processing Company

Choose A Credit Card Processing Company

Ready to make a choice? You’ve got lots of them. However, here’s how to choose a credit card processing company as a high-risk merchant.


Not all credit card processing companies are the same. Some specialize in processing transactions for high-risk merchants and have experience dealing with specific risks with high-risk businesses. Looking for a company with experience and expertise in high-risk payment processing is important.


One of the easiest ways to identify a good credit card processing company is by checking its reputation. Look for online reviews from other merchants in your industry. Check if the company is registered with the Better Business Bureau (BBB), and confirm their overall rating and history. Check to see if they have any legal or regulatory actions against them.


High-risk payment processing generally comes with higher fees compared to standard payment processing. However, be wary of companies that charge too high compared to competitors. Compare fees and the scope of services to ensure you get rates that fit your needs.


Ensure the company’s payment gateway integrates with your website or point-of-sale system. If not, you may not be able to accept credit card payments. Yikes. Companies provide this information on their website. However, it’s worth speaking with their sales team to confirm the integration options.


Another important factor to consider is security and fraud detection capabilities. Look for a credit card processing company that offers secure payment gateways, fraud detection tools, and PCI-DSS compliance. This will help ensure your customers’ data is secure and protected from fraudulent activities.

Customer Support

As a high-risk merchant, you may face challenges that require immediate attention. Therefore, choosing a credit card processing company that offers robust customer support is essential. Look for companies offering 24/7 support through multiple phones, email, or live chat channels.

Boost Your Business

Choosing the right credit card processor as a high-risk merchant is crucial for your business’s success. We’ve discussed the importance of considering fees, security, and support. However, the goal is to find a processor willing to work with your high-risk business and provide the necessary tools to protect your finances.

To learn more about boosting your business, read our other helpful business articles. We provide valuable insights and strategies to help you navigate the challenges of running a successful business. Don’t hesitate to check our blog for more tips and tricks to help your business reach new heights.

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Arnab Dey

Arnab is a passionate blogger. He shares sentient blogs on topics like current affairs, business, lifestyle, health, etc. If you want to read refulgent blogs so please follow RSL Online.

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