What Are Types of Businesses Do High-Risk Merchant Processors Go After?

According to 2021 statistics, digital commerce will have an estimated total transaction volume of US$4,176,874 worldwide. While low-risk businesses may have an easier approval process when it comes to working with payment processors, high-risk merchants may have to turn to high-risk merchant payment processors for specialized services. 

Typically high-risk businesses tend to be prone to higher levels of chargeback than average. Some popular industries associated with high-risk businesses include the airline industry, electronics, gaming, e-books, casinos, furniture sellers, and debt collection agencies. If these companies fail to abide by their merchant contract, it can be terminated. 

Characteristics of High-Risk Merchants 

Often, high-risk businesses tend to struggle with certain financial issues that can make it more difficult for them to qualify for a low-risk merchant account. This can include:

• Poor credit history
• Higher levels of credit card fraud including card-not-present fraud
• High chargeback percentage
• A high number of refunds and returns 

Unfortunately, many high-risk merchant processors tend to charge higher than average fees to compensate for higher levels of risk in terms of payment processing. In the event that a high-risk business wants to end its contract early or for example, goes over the prescribed percentage of chargebacks, they may end up on a blacklist. 

Companies that end up on the Terminated Merchant File (TMF) or MATCH list may have an even more difficult time getting approved for a new merchant account. This is especially true if they are involved in illegal or fraudulent activity such as money laundering.

As a result, it’s best to read the fine print carefully when working with a high-risk merchant and abide by their terms as much as possible. Read on to learn more about the average cost of receiving digital payments at Processing Card today!