High-Risk Merchant Accounts

High-Risk Merchant Accounts

If you get direct ecommerce merchant and not one of the 3rd party aggregators  most-likely you will be considered as High Risk Merchant

High-Risk Merchant and eDataPay High-Risk Merchant Accounts: Navigating the Challenges of the High-Risk Industry with US Local Banking Providers and International Banks.

Certain businesses are categorized as high-risk merchants in the payment processing industry due to the potential financial or regulatory responsibility they may represent to the acquirer. These high-risk merchants either run enterprises with chargeback rates that are greater than usual, have a history of having their merchant accounts closed, or conduct business with overseas clients in high-risk nations. They encounter their own set of challenges while looking for a merchant account and need the help of experts to ensure that their financial transactions are handled securely. The concept of high-risk merchants and high-risk merchant accounts is explored in greater detail in this article, along with how risk is calculated and the advantages and disadvantages of payment processing in high-risk businesses. 


Recognizing Risk Assessment 

Before a merchant account is opened, a risk assessment is conducted on the prospective customer to identify any potential threats the customer might pose to the acquirer. Payment processors can choose the best precautions to take against potential losses by using the various parameters that are taken into account during this analysis. The following are a few of the factors that were taken into account: 


1.1. MATCH List Database: Companies listed in the MATCH List database are regarded as high-risk because their history shows that they have previously had merchant accounts canceled. 


1.2. Limited payment processing experience: Younger businesses with short payment processing histories offer a higher level of uncertainty, which elevates their risk profile. 


1.3. Companies with a High Chargeback Percentage Some companies have a history of a high proportion of chargebacks, which suggests a higher risk for payment processors. 


1.4. Merchant Category Code (MCC) Classification: Businesses that have been given a high-risk MCC (Merchant Category Code) by a card brand are also thought to have a higher risk profile. 


1.5. Subscription Billing Models or Free Trial Offers: Organizations that use free trial offers or subscription billing models may be more vulnerable to chargeback fraud. 


1.6. International Business Deals with Clients in High-Risk Nations Payment processors may be concerned Because of the Potential Legal and Financial Complicatement Payment processors may be concerned about international transactions because of the possibility for complex legal and financial issues. 


Customized goods: Stores that sell personalized products run the risk of seeing a higher percentage of chargebacks issued as a result of customer complaints or disputes. 


In the event that chargebacks are issued, transactions with high average ticket amounts may compound possible losses. 


1.9. Delayed or Future Delivery: Consumers may have a more unfavorable opinion of retailers whose business plans call on delayed or future product delivery. 


1.10 Reputational Risk A further danger to the company is posed by vendors that deal in goods with the potential to harm the acquirer’s reputation. 


Accounts for retailers at high risk 

High-risk merchants have a unique set of challenges when looking for payment processing solutions because standard merchant accounts are frequently closed to them. Alternatives must be used, such as high-risk merchant accounts offered by specialized payment processors. These accounts have a special set of advantages as well as disadvantages. 


Some Advantages of High-Risk Merchant Accounts (2.1) 


An increased Chargeback Threshold The ratio of chargebacks to transactions is frequently higher for high-risk businesses than for other merchants. This gives high-risk merchants more flexibility in how they handle chargeback incidents. 


Access to Payment Processing 2.1.2 Despite having a high risk profile, high-risk merchant accounts ensure that businesses can still process payments. This makes it possible for enterprises to carry on with operations and gain access to a larger customer base. 


2.2. Negative Effects of High-Risk Merchant Accounts 


Increased Transaction Fees Payment processors usually charge higher transaction processing fees and chargeback costs to high-risk organizations as compensation for the potential risks that these companies pose. 


Reserve Funds 2.2.2 High-risk merchants may be required by payment processors to maintain a reserve fund, which is an account that holds back a portion of the merchant’s earnings as protection against the chance of chargebacks. 


2.2.3. A smaller number of options High-risk merchants may have fewer options when choosing a payment processor because they are not qualified for standard merchant accounts, which makes it more challenging for them to find the most competitive costs. 



It might be challenging for retailers to operate in the high-risk sector. However, businesses in high-risk industries can continue to accept payments safely with the help of specialized payment processors that provide high-risk merchant accounts. High-risk merchants benefit from higher chargeback thresholds even though they must maintain a cash reserve and pay higher transaction fees. This enables these companies to control their chargeback ratios more skillfully. 


Finding a reputable payment service provider is essential for businesses operating in high-risk industries in the current market to ensure smooth payment processing, maintain financial stability, and establish a strong reputation within the industry. When high-risk merchants engage with US local banking providers and foreign banks that are knowledgeable and experienced in the field, they are able to lower risks, concentrate on growth, and thrive in the highly competitive high-risk business environment. 



Payments for any business

From ecommerce stores, to subscription businesses, to platforms, SAAS and Marketplaces,

eData offer a complete stack for all your payments needs across channels.


To get approved for a merchant account in 24 hours

Apply here or call +1-561-395-9554.

Get In Touch with eDataPay Banking Specialist:





US Mailings Address:

20423 State Road 7, Suite F6-524, Boca Raton, Florida, 33498 USA.


Leave a Reply

Related Post

Burning Cryptocurrency

What Is Burning Cryptocurrency? Sending a token to an unreachable address is referred to as “burning” a cryptocurrency. The terms “burner” or “eater” addresses refer

Read More »