Humans have used money and currencies for a very long period. But, transactions have existed for longer. Our ancestors used what we call the ‘barter system’ to sustain livelihood. When no money or currencies existed, people traded their goods and services for things they wanted. The invention of a currency revolutionized the world completely. A similar revolution occurred centuries later when we invented the internet and shifted our transactions online. Various changes were implemented, and numerous ways of paying for the services you needed were created.

If you have an online business with higher chargebacks risks and need to conduct credit card transactions, you should look into a high-risk merchant account. But, it becomes crucial to understand what high-risk merchant accounts are and how they function. For something related to your business and money, you must take full responsibility and understand the concepts clearly.

To create a high-risk merchant account and high risk payment processing, you have to look for an acquiring bank so one can underwrite your business. However, a reliable payment service provider can increase your chances of getting an account. Let us understand how these accounts work and how you can create one.

What are High-Risk Merchant Accounts?

What are High-Risk Merchant Accounts

There has been an international boom in the financial system in the last few years. This growth is because industries globally are striving for maximum profits and transactions all the time. This policy ensures the best possible sales for the industry. However, banks, companies, and clients always want their money to be safe. After generations of evolution in banking and trading, we got assurance that everyone involved in transactions gets benefits and no longer feels cheated. This step, however, leads to some accounts walking a fine line. These accounts are called high-risk merchant accounts.

High-risk payments are different from traditional transactions. They require a unique type of account. This difference is because traditional savings accounts cannot cope with the chargebacks when a customer cancels an order. They are special accounts for handling chargebacks due to cancellations. Many banks provide such specific accounts. Around 2,000 well-known banks in the United States alone offer accounts to deal with high-risk payments. These accounts permit you to take part in high-risk transactions. Banks that are certified by the national authorities hold your money safely. Authorities also monitor high-risk transactions between parties in different countries. These types of transactions are called offshore high-risk transactions.

High-risk merchant accounts can cope with usual cancellations due to their rollback charge system. They typically keep more than 5% of the transaction quantity and preserve it as a security deposit. Rollback fees are essential in high-risk merchant accounts.

How to choose a High-Risk Payment Processor?

High-Risk Payment Processor

Now that we know about these specific bank accounts, let us see the criteria using which we can judge if a particular processor is suitable for you. Picking the right choice enables you to expand your business and meet your needs.

  • Check the types of businesses that the processor serves- Although broadly classified as Although broadly classified as high-risk payment processors, some would not provide for every business. What that means is that while some processors accept cannabis merchants, others may not. Instead, they could serve the vape or adult industry. Similarly, some may be exclusive to the gaming industry or pawn shops. Ideally, the first step involves the kind of business you are in and shortlisting a few processors who serve your industry.
  • Check for good support, flexibility, and options to tailor for your needs- What this means is that your processor should be reliable. Once you run into a roadblock (a common scenario in a business), the support team should help you. It is also worth making sure that you get what you need and ask. Try customizing the bundles or options for rates and features that you need for your particular business model. Transparency in pricing also increases the trust factor among parties and is beneficial for your business.
  • Trustability and dependability- Like you choose your bank or a business partner, check how legit your potential processor is. Research about how long they have been in the market, partner reviews and feedback, and how they have performed recently.
  • Additional features and points- Look for additional features like the option to avail multiple accounts. There are numerous benefits to this, like more coverage, lesser chargeback risk, having a backup option, etc. Also, check the website of your processor for additional confirmation on how they operate. The best companies usually deploy cutting-edge technology.
  • Security factors- This decision is crucial for your business and money. So, this factor becomes essential. Pay attention to the rates and understand every part of the agreement. Reading the contract entirely and thoroughly is very important.

How to make a High-Risk Merchant Account?

How to make a High-Risk Merchant Account

For starters, you will need to fill an application form. Also, you have to find the perfect payment processor for you, based on the points above. Once you match with a bank based on your needs, you have to wait for approval. After you are approved, you may start transactions online.

Documents required: Your passport and utility bill of local directors and shareholders (holding more than 15%), Certificate of Shareholders and Incorporation certificate (also of other firms when shareholders), License number, Organization issuing license, History of processing for the last six months (number of transactions, total value, chargeback percentage).

Up next, you have to prepare yourself and your business for the upcoming tests. Management experts perform these tests to see if your business is eligible for a high-risk merchant account. They also check if you are on the terminated merchant file list. There are a lot of thorough checks according to the regulations. These checks ensure that your history is good enough to make you eligible for the account. They check for fraud, high chargeback ratios, etc. If you fail one of them, it gets difficult to get an account. It is also worth keeping in mind that the fees for opening high-risk merchant accounts are higher than those for usual ones.


The digital revolution has caused many modifications across the world. Physical transactions are not the prime option anymore. Online transactions are the new go-to norm and have taken over. They are most functional as they provide lots of ways to protect and track each transaction. However, there still may be some risk in any transaction, be it physical, high-risk, or low-risk. Try performing some research and stay away from frauds and scammers. Precaution is crucial for any deal, and that is what makes them reliable. This way, the transactions are more secure for the owner, business, and customer. If you’re interested, contact legitimate banks to open a high-risk merchant account.

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