5 Best High-Risk Merchant Accounts in 2024

A high-risk merchant account is a service that allows high-risk businesses to process credit card transactions. Businesses are considered “high-risk” if they operate in a highly regulated industry, use a business model that is highly susceptible to chargebacks, or have a poor credit history.

Most high-risk merchant account services charge higher-than-average payment processing fees and have stricter application processes. However, there are providers that offer cost-effective plans and features tailored to each business’s needs.

Based on our evaluation, the best high-risk merchant account providers for 2024 are:

Best high-merchant account providers compared

*The Member Alert to Control High-Risk Merchants (MATCH) list is a register of all merchants that have had their accounts terminated in the past. Previously known as terminated merchant file (TMF) list, these businesses were found to be in violation of their merchant services agreement. Businesses remain on the MATCH list for a period of seven years.

What is a high-risk merchant?

A high-risk merchant is a business that banks and other financial institutions consider “high-risk.” This can be due to any number of factors, including the industry the business operates in, the rates of chargebacks it receives, credit score, and more. Ultimately, businesses deemed high-risk are seen as risky or bad investments for banks. This is why it is harder to get approved for a merchant account, and those merchant accounts often have higher fees than low-risk businesses. 

What makes a business high-risk?

A business will be considered high risk if it falls into any one of the following: 

Businesses included in the MATCH list are there because they violated the terms of their merchant account agreement, which resulted in the termination of their merchant account. Making sure that a business is not on the MATCH list is a standard step when approving a merchant account.   

Some industries are more prone to chargeback claims than others. When businesses fail to manage chargeback claims or have a business practice that results in an abnormally high amount of chargebacks, their chargeback rate increases. This can be due to a lack of fraud prevention tools or weak payment processing policies. Businesses with a high chargeback rate (typically > 1%), are classified by banks as high-risk. 

Examples of businesses susceptible to high chargeback rates include:

• Businesses with a high volume of card-not-present transactions (including multicurrency)
• Businesses offering subscription services, particularly those on auto-renew
• Businesses that require product shipping

Banks avoid any financial uncertainty, especially when it can lead to a loss on an investment. This includes providing a business with the ability to accept credit card payments. As a result, most banks tend to be wary of businesses that rely on inconsistent revenues such as multi-level marketing, software, and ticket sales. 

Banks are inclined to reject businesses that trade highly regulated products and services. Banks are sensitive to the consequences of reputational risk that comes from supporting businesses in highly regulated industries. The increased risk of being shut down is also a major red flag for acquiring banks. 

Most banks consider businesses that sell high-value items such as jewelry, automobiles, and real estate high-risk. Banks also deem certain large businesses with high-volume sales risky, particularly B2Bs that combine factors such as shipping, card-not-present payments, and mail-order/telephone order (MOTO) transactions.   

Credit scores are a major consideration for banks. Some banks even require a minimum number of months/years of credit card processing for businesses to qualify for a merchant account. Even then, poor business or personal credit scores will classify you/your business as high-risk and will result in a rejection of your low-risk merchant account application.

What to look for in a high-risk merchant account

Consider the following criteria when choosing a high-risk merchant account:

Industry expertise

You need a merchant account service provider with an extensive background in high-risk verticals. You should be represented by account managers with expertise in different industries. Their website should tell you how much they are familiar with the industry you belong to, enumerating their solutions to challenges specific to high-risk businesses similar to your own. The right provider will give you the best chance of being approved for a merchant account. 

Client support

Unlike standard or low-risk merchant accounts, high-risk businesses will need all the help they can get to ensure account approval. This is why it’s important to choose a merchant account service provider that offers extensive client support from the moment you start your application and gather supporting documents until you finish the onboarding process. The best ones will assign you a dedicated account manager throughout your contract. 

Secure payment processing services

Businesses have varying payment processing needs, especially high-risk types. Some may need the ability to accept multi-currency payments, while others will look for alternative payment methods such as ACH and the ability to add convenience fees. It is important to look for a merchant account services provider that can meet your requirements while also providing the highest security to minimize fraud and chargebacks. 

Scalability

Being classified as a high-risk business should not limit your capacity for growth. The best high-risk merchant account service providers can offer a wide range of customizations that can scale along with the business. It should support integrations with reputable business systems and assist in upgrading the client’s payment processing tools as its needs change over time.  

Flexible pricing and contract terms

Most high-risk merchant account providers do not disclose their pricing because of the unique requirements of high-risk businesses. That said, the advantage of custom pricing is that you only pay for services that your business really needs. 

Choose a provider that can adapt your preferred pricing structure while also providing you with alternatives. Look into the contract terms, as most high-risk merchant accounts can qualify for short-term contracts nowadays. Finally, weigh the benefits of working with a familiar pricing structure vs. potentially higher savings.     

Finding the right high-risk merchant account for you 

When choosing a high-risk merchant account service provider, risk management should be as important as maximizing your savings. So, while budget and revenue are priorities, your decision should also factor in the company’s ability to support your unique requirements with industry expertise, the highest security measures, and flexible payment services.      

We highly recommend PaymentCloud if you need a high-risk merchant account that can provide you with top-notch client support and payment services customized to your needs, from pricing to hardware. 

We believe that Durango Merchant Services (DMS) is the best option for hard-to-place businesses. DMS can provide account managers with decades of experience in high-risk industries to give you the best chances of approval. 

First Card Payments’ specialization is B2B businesses. Inquire about how they can provide you with a fully customized payment gateway and seamless integration with your current business system.

For poor or bad credit history, consider High Risk Pay, which offers the fastest approval and high approval rates for a long list of high-risk businesses regardless of credit score. 

Lastly, Flowhub Pay should be top of mind if you are launching a cannabis business. Its solid expertise in the industry is supported by industry-specific software, hardware, and relationships with banking services to help you get started.   

Read more: Best credit card processing companies

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