The Business Buzz

Being labeled a high-risk merchant is a burden. Some payment processing companies won’t even work with high-risk merchants. Many of the ones that do often charge higher processing fees, or force the merchant to provide “rolling cash reserves.” While you may not be able to entirely escape these requirements (e.g., different fees and cash reserves), you can certainly mitigate their impact and lessen their severity—that is…if you work with the right payment solutions provider.

What does being “high risk” mean, anyway? Some industries are inherently viewed as high-risk. Supplements, adult entertainment, bail bonds, credit repair, and cannabis are just a few industries that are slapped with this label. Sometimes it’s the product or service itself, while other times it’s the legal landscape around it.

Other times, a merchant is labeled as “high risk” because of their sales history. One too many chargebacks can lead to being blacklisted by Visa and Mastercard. And once that happens, it can be extremely challenging to change your image. Unfortunately, chargebacks are an increasingly abused phenomenon, particularly in specific industries like eCommerce and travel.

Sometimes, you might even be labeled as a “risky” merchant because you have no sales history. New businesses can have trouble securing a way to accept debit and credit card payments outside of platforms like Shopify, which offer unfavorable flat rate pricing models on fees. It’s a bit of a catch-22 for new businesses with little to no sales history to show.

Whatever reason applies to you (industry, sales history, etc.), learn more about high-risk payment processing and how to mitigate its impact in our articles below.