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The Best High Risk Credit Card Processors |
Before you go out and choose a high risk merchant account provider, you should really learn how they work.
So you can make an informed decision, there are a few things you should think about before you buy. That's what our "high risk merchant account buyers guide" below is all about.
Specializing in high-risk merchant processing, Easy Pay Direct has served over 60,000 merchants.
They excel in securing approvals for accounts that other providers often reject, including those with credit scores below 500, bankruptcies, continuity products, adult websites, and businesses on the MATCH list.
Renowned clients include Tony Robbins, CUTCO, and SamCart. If you're short on time, Easy Pay Direct is our top recommendation.
They eat, live and breathe high risk, and have a track record for getting merchant accounts approved that most providers would fall short on. Including:
- People with sub 500 credit scores
- Bankruptcies
- Continuity Products
- Information Products
- Adult Websites
- Nutraceutical Companies
- Multi-Level Marketing Companies (MLM’s)
- Debt Collection Agencies
- And even businesses on the MATCH List
- Specializes in high-risk merchant processing
- Successfully secures approvals for difficult cases, such as low credit scores and bankruptcies
- Works with notable clients like Tony Robbins, CUTCO, and SamCart
- Strong industry reputation and extensive experience
- May have higher fees compared to low-risk providers
- Limited to high-risk merchants, which might exclude some businesses
eMerchant Broker is another excellent choice for high-risk merchant accounts. They offer essential services such as merchant accounts, check processing, chargeback minimization, and merchant funding options like cash advances.
While their hardware offerings are limited, they do provide a proprietary payment gateway, eMB Gateway, and integrations with other payment gateways. With a 95% approval rate, EMB serves thousands of merchants.
- Offers essential services like merchant accounts, check processing, and chargeback minimization
- Proprietary payment gateway (eMB Gateway) with integration options
- High approval rate of 95%
- Serves thousands of merchants
- Limited hardware options
- May lack some additional services offered by competitors
3. SMB Global
SMB Global Payments offers tailored payment processing solutions for high-risk domestic and international businesses.
They have extensive domestic banking relationships and provide offshore merchant accounts, which are beneficial for businesses in challenging domestic industries or international markets.
Additional services include ACH processing, chargeback prevention, and small business loans through Lendio.
- Specializes in high-risk domestic and international payment processing
- Provides offshore merchant accounts for broader underwriting guidelines
- Offers ACH processing, chargeback prevention, and small business loans
- Strong domestic banking relationships
- Does not have a proprietary payment gateway
- Offshore accounts might involve higher fees and regulatory complexities
4. PayKings
PayKings is focused on high-risk merchant accounts and has been in business for about a decade. They have a solid track record, making them a reliable option for high-risk businesses.
While they don't have standout features to place them in the top three, they also have no significant drawbacks.
- Focused on high-risk merchant accounts with a decade of experience
- Reliable track record with various clients
- No significant drawbacks or red flags
- Lacks standout features compared to top three providers
- May not offer the most competitive pricing
5. PaymentCloud
PaymentCloud serves a broader range of clients but offers high-risk account services. They have an extensive network of MSP partners and claim that over 80% of the top digital ISOs use their "hard-to-place program."
We recommend thoroughly evaluating their expertise before proceeding, but they could be a good fit if they have experience with your specific business type.
- Offers high-risk account services alongside a wide range of other clients
- Large network of MSP partners
- Experienced in handling diverse business types
- Not exclusively focused on high-risk merchants
- Need to evaluate their expertise thoroughly before proceeding
- Claims of Fortune 100 clients are unclear
6. Paypal
Despite being commonly mentioned in high-risk merchant account reviews, PayPal is not suitable for high-risk businesses.
As a merchant account aggregator, PayPal is not equipped to handle the unique needs of high-risk merchants.
- Widely recognized and easy to use
- Suitable for low-risk businesses
- Not appropriate for high-risk businesses
- Functions as a merchant account aggregator, which is not ideal for high-risk needs
- Commonly misrepresented as suitable for high-risk accounts, which can mislead business owners
Stick to our top five recommendations for your initial provider search to ensure you choose the right partner.
Let's start by clarifying what "high risk" means. While the term might seem alarming, it doesn't necessarily indicate something negative. Various factors contribute to a business being labeled as high risk, and most aren't as problematic as the term suggests.
Credit card companies, such as VISA and MasterCard, prioritize protecting their cardholders.
They provide services like disputing fraudulent transactions, processing chargebacks, and offering peace of mind, encouraging customers to use their credit cards freely, sometimes spending more than they have.
But what happens when a customer is dissatisfied with a purchase and requests a chargeback? The merchant, in this case, you, the business owner, must cover the cost. If the business can't pay, the merchant services provider (MSP) bears the financial burden, highlighting the "risk" involved for MSPs.
Certain industries statistically present more risk, such as firearms, bail bonds, and marijuana. Online businesses, where transactions occur without verifying the cardholder's identity, are also more prone to fraud.
Additionally, businesses with models prone to chargebacks, like those that auto-enroll customers in monthly payments or offer subjective-quality services, are seen as high risk.
A high-risk designation doesn't imply wrongdoing; it simply means the business has a higher likelihood of chargebacks and fraud, making it riskier for merchant account providers to extend credit processing services.
A high-risk merchant account is designed for businesses with financial unpredictability, high dispute/chargeback rates, and elevated potential loss risks for the MSP and bank providing payment processing infrastructure.
Securing a high-risk merchant account involves partnering with a company that equips your business to accept credit card payments, both in-person and online.
It's crucial to establish a strong relationship with your MSP, ensuring they understand your business and work closely with you.
When an MSP partners with a business, it fulfills several key roles:
- Payment Processing: Providing the necessary hardware, software, and infrastructure for accepting credit card payments.
- Intermediary Services: Managing interactions with card companies (like VISA and MasterCard) and banks, handling the complex aspects of credit card transactions, such as authorization and settlement.
- Financial Guarantor: Acting as the business’s financial backer. In cases of fraud, excessive chargebacks, or refunds, the MSP covers the losses.
MSPs charge fees for these services, with higher fees for high-risk businesses. This is akin to car insurance, where a history of accidents and an expensive car lead to higher premiums.
So, why choose a High-Risk Merchant Account?
Despite higher costs, a high-risk merchant account provides essential tools for accepting credit card payments, ensuring your business can operate smoothly and securely.
As a business owner, you might wonder, "Why should I choose a high-risk merchant account when the fees are higher?" It's a fair question, and the answer lies in how essential it is for your business to accept payments beyond cash or checks.
High-risk merchant accounts not only protect the merchant account provider but also safeguard your business from various risks.
Many business owners either lack awareness of the distinction between high-risk and low-risk accounts or simply opt for a payment service provider (PSP) with low fees and quick setup, like PayPal.
Initially, setting up an account with such PSPs seems straightforward—enter some details and you're done. However, issues arise when their system flags an aspect of your business operations, such as:
- Excessive chargebacks
- Fraud incidents
- Unusually high transaction volumes
- Website security breaches
- Policy changes by the PSP
- Industry-related scrutiny or fraud at a competitor
These issues can lead to your account being frozen or closed, leaving you unable to accept credit card payments for days or even weeks. Your only recourse might be dealing with unhelpful customer support, which can be frustrating.
Choosing a high-risk merchant account provider ensures that they anticipate and prepare for such scenarios before your account is created. This preparation is crucial for maintaining your business operations seamlessly.
- Underwriting
- Global Expansion Capabilities
- No Volume Caps
- Minimized Chargeback Issues
- Streamlined Payment Flow
A common mistake is thinking that using services like PayPal, Stripe, or Square means you have a merchant account. These companies are merchant account aggregators, meaning they don’t tailor their services to your specific business needs.
They can quickly shut down your account if they detect any suspicious activity, leaving you stranded.
A high-risk merchant account provider, on the other hand, conducts thorough underwriting to understand your business.
This due diligence means they are less likely to freeze or close your account when unexpected events occur, providing peace of mind and operational continuity.
Several factors can classify a business as high-risk, including:
- Poor or no credit history
- No experience with credit card processing
- Past incidents of fraud or illegal activity
- International sales
- Selling products with reputational risks (e.g., adult products, smoking accessories)
- Operating in highly regulated industries (e.g., alcohol, tobacco, firearms)
- Mail-order, telephone-order, or online transactions (card-not-present situations)
- High average transaction amounts
- History of high chargebacks
Many industries and business models are considered high-risk by default.
If your business falls into one of these categories, you might need a high-risk merchant account to ensure smooth payment processing and business continuity.
- Accounting & Tax Prep
- Adult Entertainment
- Alcohol
- Antiques & Collectibles
- Bad Credit, Credit Repair
- Bail Bonds
- CBD
- Coins
- Continuity, Subscriptions, Recurring Billing
- Cosmetics
- Dating Services
- Debt Collection, Debt Consolidation
- Digital Downloads
- Digital Marketing, SEO, Web Design
- Document Preparation
- Dropshipping
- Electronics
- Extended Warranty
- eBay
- eBooks
- Educational Products
- Fantasy Sports
- Firearms, Guns & Ammunition
- Fireworks
- Furniture
- High Average Tickets
- Hotel & Lodging
- Hunting & Outdoor Equipment
- Information Products
- Jet Charter
- Live Events
- MATCH List/TMF Merchants
- Magazine Subscriptions
- Multi-level Marketing
- Non-Profit
- Nutraceuticals and Supplements
- Online Dating
- Online Gaming
- Property Management
- SaaS Companies
- Self-Service/Kiosk Payments
- Skin Care Products
- Smoking Accessories, Cigarettes & Tobacco, eCig & Vape
- Supplement & Nutraceuticals
- Tasers & Stun Guns
- Tech Support
- Telemarketing
- Telemedicine
- Timeshare Litigation
- Tobacco
- Transportation
- Travel & Tour
- Trial & Free Offer
- VoIP & Telecommunications
Also, keep in mind that some of these high-risk groups are pretty big industries on their own, and the way they handle payments may be different from one another.
There are some MSPs that specialize in these niches under the high-risk umbrella. If any of these describe your business, please look at the high risk merchant account providers we've listed below. You can also read our review articles that go into more detail about high risk providers in each industry or category.
Securing a high-risk merchant account involves careful consideration from both the business and the merchant service provider (MSP).
While MSPs evaluate businesses for potential risk, business owners must also be discerning when choosing a provider to avoid unnecessary fees, account closures, or being placed on the Terminated Merchant File (TMF) list.
Assess the MSP's experience with high-risk accounts, particularly in your industry and business type.
Check their longevity in the market and look for case studies or testimonials that illustrate their ability to handle challenges specific to your sector.
Determine the range of features and solutions the MSP offers beyond the basic merchant account.
Look for additional services like payment gateways, fraud screening, transaction routing, decline salvage, and comprehensive reporting.
Evaluate your business's history with processing credit card transactions. Be prepared to provide data on high-risk indicators such as chargeback ratios and monthly revenue volatility.
Ensure the MSP can tailor their services to meet your specific business needs. Customization can be crucial for effectively managing the unique risks associated with high-risk merchant accounts.
Understand the cash requirements for rolling reserves needed to keep your account solvent. This can significantly impact your cash flow management.
To improve your chances of approval, present your business as credible and well-prepared. Here's how to navigate the application process and enhance your likelihood of success:
Treat the application process as an opportunity to clearly and accurately portray your business to the underwriter.
Whether you handle this yourself or seek professional assistance, the goal is to present your business as low-risk and well-organized.
Underwriters often look for reasons to decline applications.
If you're not working with someone experienced in dealing with underwriting departments, be cautious and deliberate in your interactions to avoid raising red flags.
Show that you have a tangible stake in your business. This could be through a physical location, personal investment, or local community ties, demonstrating your commitment and reducing perceived risk.
Avoid relying too heavily on outsourced services. Having control over key business operations reassures underwriters of your stability and reliability.
Stay away from misleading marketing practices like negative options or forced continuity. These can lead to higher chargeback rates and distrust from both customers and underwriters.
If your business has faced bankruptcies, poor credit, judgments, or high chargeback rates, provide clear explanations upfront.
Transparency helps underwriters make informed decisions and avoids negative assumptions.
Always provide requested information without questioning the underwriter’s motives. This cooperation builds trust and increases your chances of approval.
List conservative monthly volume estimates on your application. Drastic increases without historical data can raise concerns.
It's better to start with manageable figures and gradually request increases as your business grows.
By carefully selecting an MSP and thoroughly preparing your application, you can successfully navigate the challenges of obtaining a high-risk merchant account and ensure a smoother onboarding process.
When it comes to managing high-risk transactions, selecting the right credit card processor is crucial for ensuring seamless operations and financial stability.
Here's a recap of the best high-risk merchant account providers:
- Easy Pay Direct: Known for its robust infrastructure and exceptional customer support, Easy Pay Direct offers tailored solutions for high-risk businesses, including chargeback protection and seamless integrations.
- eMerchant Broker: Specializing in high-risk industries, E Merchant Broker provides comprehensive merchant services with competitive rates, quick approvals, and advanced fraud detection.
- SMB Global: With a focus on international high-risk merchants, SMB Global delivers a range of services including multi-currency processing and high-risk merchant accounts with flexible terms.
- PayKings: PayKings stands out for its personalized approach and extensive network of acquiring banks. They offer reliable solutions that cater to a variety of high-risk sectors, ensuring high approval rates and low fees.
- PaymentCloud: Catering to startups and established businesses alike, Payment Cloud offers quick setup, competitive pricing, and dedicated support for high-risk merchants, making it a preferred choice for many.
Each of these providers brings unique strengths to the table, making them the top choices for high-risk credit card processing.
By partnering with one of these reputable companies, high-risk businesses can better manage their transactions, reduce fraud risks, and ultimately grow their operations with confidence.