What Is A High Risk Merchant Processor

Florence Carpenter

In 2020, digital and mobile wallet payments made up 44.5% of online transactions worldwide, demonstrating the growing popularity of merchant processors. 

However, businesses with a poor credit history, high chargeback rate, or operate within specific industries may be considered high risk and may need to work with a high-risk merchant processor. Those who want to accept MOTO payments may also be viewed as high risk as they often need customized solutions, such as multi-currency options. 

It’s important to note that different payment processors and banks will have different criteria for deciding whether you are a high-risk or low-risk business. Some major factors that may lead to a high-risk designation include a low personal credit score, lack of previous processing history, and a chargeback rate of 1% or higher. 

Benefits of Working with a High Risk Merchant Processor 

Although high-risk merchant processors tend to charge higher fees and have less flexible contracts compared to low-risk processors, you may have to work with one if your merchant applications are denied by those unwilling to take on the amount of risk. 

Some benefits of working with a high-risk merchant processor include: 

  • Being able to accept different currencies
  • Being able to cater to international markets
  • Higher processing volumes per month
  • Increased capability to expand
  • More efficient security features to detect and prevent fraud 

How to Find a High Risk Merchant Processor 

Doing your research is key before partnering with any payment processor. Reading customer reviews from third-party pages, and getting detailed quotes can save you from trouble down the line. Carefully read your contract to ensure that the terms are acceptable and that there aren’t any hidden clauses.

While it may be challenging to find a reputable high-risk merchant processor to do business with, it will be rewarding in terms of greater security and more financial freedom for your business. 

To learn more about which types of businesses are typically categorized as high risk, read Processing Card’s resources today.

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