When it comes to applying for a merchant account for your business, you may be classified as high risk or low risk. High-risk businesses will usually need a high-risk merchant account to fulfill their payment processing needs in terms of volume and location.
Although the cost of a high-risk merchant account can vary greatly, it can cost around $2,000 per year to avail of payment processing and other add-ons that can increase the price. This figure tends to be much higher than the cost of low-risk accounts to compensate for the greater risk of fraud and chargebacks.
High-risk merchant accounts tend to come with yearly as opposed to monthly contracts. Costs are usually $1,500 at the minimum, plus a one-time merchant application fee of $100-$300, credit card processing fees, and more.
Credit card processing fees for high-risk businesses tend to start at around 3.5%, which is significantly higher than average. In addition, chargeback fees usually cost over $30 per transaction in the event of a customer dispute. A high chargeback rate is likely to lead to a higher fee, so investing in security measures can be prudent.
Often, many high-risk processors don’t give out pricing on their company pages because the cost can vary depending on many factors. Some common ones that can increase or decrease your rate include:
Since fees can also vary depending on your required features, country of operation, length of the contract, and level of service, it’s best to shop around for at least 3 different quotes before settling on a high-risk merchant account for your business.
To learn more about the annual fees of high-risk merchant accounts, read Processing Card’s other resources.
Florence Carpenter is passionate about ensuring that the process of opening merchant accounts is as straightforward as possible. She graduated from the University of Michigan with a bachelor’s degree in Marketing.
