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High-Risk processor comparison

What are high-risk merchant accounts? In this high-risk processor comparison guide, we're going in-depth to analyze what high-risk merchants are, how commercial credit card processing companies choose their clients, and where to find the best high-risk merchant account service providers for your business.

What Are High-Risk Merchant Account Providers

, how commercial credit card processing companies choose their clients, and where to find the best high-risk merc

Applying for payment processors isn't as easy when you're considered a high-risk merchant. Commercial merchant services providers—as well as banks and other financial institutions for that matter—often limit their merchant accounts to business owners who are considered "safe."

There are plenty of factors that come into play when risk assessing a business, but generally, a payment service provider will dub you as a high-risk business if you:

Operate in High-Risk Industries

Both large and small business owners will be considered a high-risk merchant if they operate in an industry that is considered "risky" by the standards of commercial payment processing companies. Some high-risk industries include:

  • Adult entertainment
  • Tobacco
  • CBD oil
  • Cryptocurrency trading/investing
  • Money transfer
  • Legal and financial
  • Call centers
  • Auto dealership

Are at Risk of Financial Failure

A small business owner who is relatively new to the industry is also considered a high-risk merchant. Commercial merchant account service providers often prefer clients with an annual revenue of around $1,000,000. This amount might be difficult to reach for new businesses that specialize in low-ticket sales.

Bad Credit History

Getting qualified for a mobile payment processor or credit card processing system is not easy if you have bad credit. Commercial credit card processors are often granted to clients with good credit scores. The most common causes of bad credit include:

  • Unpaid credit card debt
  • Existing unsecured/secured loans
  • Previously failed business ventures
  • Foreclosed properties
  • Impounded vehicles

Are Prone to Chargebacks

Yes, most merchant account provider options require merchants to process a certain volume of credit card payments annually. However, if a high percentage of those credit card transactions are charged back or refunded, you'll be dubbed as a risky account.

Chargeback prevention tactics are crucial to merchant account service providers because a high-volume of chargebacks puts them at risk of fraudulent transactions. To be considered low-risk, you need to keep the chargebacks to a minimum.

PaymentCloud
paypal logo
Provide access to POS equipment capable of mobile wallet and credit card processing
Ease and simplicity of its application process
Risky merchants can get their credit card processors set up in just a matter of days
PaymentCloud has unique customer support systems. Each business owner is assigned a dedicated account manager
PaymentCloud charges a 3% to 6.50% credit card processing fee for both swiped and keyed-in transactions
Transactions made through virtual terminals are charged 2.90% plus $0.30
Payment gateway fee of $25 and a batch fee of $0.10
Merchants who'll opt to cancel their accounts prematurely can do so at no cost because they do not charge an early termination fee
Durango
paypal logo
Opening an offshore merchant account is applicable to all kinds of high-risk merchants, regardless if they cater to local or global markets
Durango charges fair, competitive offshore merchant account fees
Doesn't force their high-risk merchant clients to pay inflated conversion rates and charges
Specializes in providing excellent offshore high-risk merchant account services
Offers the best cross-border fees, even among other high-risk merchant account service providers
Caters to a wider range of clients with bad credit history
Provides their high-risk clients with the necessary software programs, tools, and training to reduce their risk of fraudulent transactions
Offers merchant clients the option to choose between a tiered and interchange-plus pricing model
Host Merchant Services
paypal logo
Was originally a traditional merchant account provider that equips low-risk businesses with payment processor systems
Only started providing high-risk merchant accounts in later years
Offers the best high-risk merchant accounts for brick-and-mortar businesses that cannot qualify for a commercial credit card processor
Fair rates and predictable interchange-plus pricing fees. Note that a fixed pricing system is very rare when it comes to high-risk businesses
Offers competitively priced rates and follow an interchange-plus pricing model
Only have one primary payment processor: Wells Fargo

Top Payment Processing Service Providers for High-Risk Businesses

The payment processor needs of high-risk merchants vary on a case-by-case basis. There's no high-risk credit card payment processing brand that absolutely indisputably trumps all other credit card processing options.

Every merchant account provider has its specific pros and cons. That's why instead of ranking the high-risk merchant account service providers on the market, we've decided to assess each one of them to determine which business types would benefit from their offers the most.

PaymentCloud: Simplest Option for High-Risk Merchants

Even with a high-risk credit card payment processing brand, getting approved for a merchant account and payment processor is not something at-risk merchants can easily do.

For example, some brands have only specialized in specific industries. Meanwhile, there are also brands that are more lenient with their credit card processor requirements but charge many high-risk merchant clients higher a pricing model.

PaymentCloud is different. The company offers to work with a wide range of business types, so high-risk merchants can expect approval on their merchant account applications.

With a PaymentCloud account, you'll have access to POS equipment capable of mobile wallet and credit card processing. In most cases, the funds are credited to one's account the next day. This speed and convenience when it comes to credit card processing are not usually available to most high-risk merchants.

Standout Features

What makes PaymentCloud stand out from the rest is the ease and simplicity of its application process. Risky merchants can get their credit card processors set up in just a matter of days. If the client is relatively low-risk, they can even have their account up and running in just a few hours.

Another feature worth mentioning is that PaymentCloud has unique customer support systems. Each business owner is assigned a dedicated account manager. This is great for new merchants or small business owners who often experience issues such as refund requests and chargebacks. They also have a tech support team you can call for hardware and software issues.

Pricing, Fees, and Charges

PaymentCloud charges a 3% to 6.50% credit card processing fee for both swiped and keyed-in transactions. Transactions made through virtual terminals are charged 2.90% plus $0.30. They also have a payment gateway fee of $25 and a batch fee of $0.10.

Merchants who'll opt to cancel their accounts prematurely can do so at no cost because they do not charge an early termination fee. For the PCI-compliance and equipment fees, however, you'll have to consult with a PaymentCloud agent yourself.

Bear in mind that as with any other brand that provides merchant account services to high-risk businesses, PaymentCloud will adjust their pricing model based on the client they're working with. Remember: businesses have varying needs and demands. That's why it's normal for high-risk merchant account service providers to have varying rates and fees per client.

Business Disadvantages

PaymentCloud is a simple and straightforward high-risk merchant account provider and there aren't really any major downsides to working with them. Some might find the lack of disclosed pricing and fees irksome. As we stated, however, all third-party institutions that cater to high-risk merchants have varying fees and rates per client.

Perhaps the only con of using PaymentCloud is they do not support merchants that deal with ingestible CBD products. Although, dealers of topical CBD goods can qualify for a PaymentCloud account.

Are you having trouble finding a high-risk merchant account provider that supports your niche? Talk to Processing Card! Our team can help you narrow down the best high-risk merchant accounts and credit card payment processor options for your specific industry.

Durango: Ideal for Mobile/Credit Card Payment Processing and Offshore Accounts

The American e-commerce industry is thriving now more than ever. In fact, statistics say that online retail sales are expected to reach nearly $500 billion by the year 2024. There are even brick-and-mortar stores that decided to go digital and build their own website so they can accept payments remotely.

Unfortunately, most e-commerce merchants are considered high-risk businesses. Even if they did not come from a risky industry, commercial merchant account providers avoid online transactions since they are at risk of fraudulent chargebacks. Plus, overseas card payments are generally considered high risk.

The best approach here is to apply for an offshore merchant account with reputable high-risk merchant account providers like Durango. Opening an offshore merchant account is applicable to all kinds of high-risk merchants, regardless if they cater to local or global markets.

For global brands, an offshore high-risk merchant account is a must if you want to process payments globally. The good news here is that Durango charges fair, competitive offshore merchant account fees. Unlike competitors, they don't force their high-risk merchant clients to pay inflated conversion rates and charges.

Meanwhile, local high-risk merchant e-commerce stores that don't qualify for a commercial merchant account, can try looking for an international business bank account. High-risk merchant account providers like Durango can help you connect with them.

Standout Features

Durango specializes in providing excellent offshore high-risk merchant account services. The company offers the best cross-border fees, even among other high-risk merchant account service providers. This is beneficial for at-risk merchants that process international transactions as the money you save on fees and charges go directly to profits.

One of the most common reasons why a high-risk business might choose Durango over other high-risk merchant account providers like PaymentCloud is they cater to a wider range of clients with bad credit history. Opening an offshore account is more viable as compared to a regular high-risk merchant account.

Another feature that sets Durango apart is their chargeback prevention system. They provide their high-risk clients with the necessary software programs, tools, and training to reduce their risk of fraudulent transactions. Unlike other payment processors, they won't simply turn away a high-risk business that's prone to chargebacks.

Pricing, Fees, and Charges

Durango offers a flexible pricing model that varies depending on the needs of their specific high-risk merchant clients. Unlike many other merchant account providers, they offer merchant clients the option to choose between a tiered and interchange-plus pricing model.

Durango discloses they don't charge an early termination fee. High-risk merchants can cancel their Durango account any time they want at no additional cost.

However, bear in mind that the early termination fee isn't the only thing you need to consider. Merchants also have to compute for any PCI-compliance, monthly, and equipment leasing fees.

Business Disadvantages

The biggest disadvantage to using Durango is their services are not available to high-risk merchant clients that provide age-restricted products/services or offer remote compute customer support services.

Host Merchant Services: Competitive High-Risk Merchant Account Fees for Brick-and-Mortar Businesses

High-risk brick-and-mortar businesses would have trouble finding merchant account providers that'd be willing to provide them with a credit card processor. They can opt for an offshore or high-risk merchant account, but the fees might not be worth it—especially if the business/merchant doesn't have a working website to take orders.

Fortunately, there is the Host Merchant Services company. HMS was originally a traditional merchant account provider that equips low-risk businesses with payment processor systems. They only started providing high-risk merchant accounts in later years.

Standout Features

HMS offers the best high-risk merchant accounts for brick-and-mortar businesses that cannot qualify for a commercial credit card processor. They have fair rates and predictable interchange-plus pricing fees. Note that a fixed pricing system is very rare when it comes to high-risk businesses.

Pricing, Fees, and Charges

Even among other high-risk payment processing service providers, they offer competitively priced rates and follow an interchange-plus pricing model. Plus, unlike other high-risk merchant account providers, they only have one primary payment processor: Wells Fargo. This allows them to provide more accurate, uniform pricing rates and charges.

Business Disadvantages

The biggest disadvantage of HMS is that it's still a bit difficult to qualify for a merchant account. Yes, they cater to high-risk business clients, but they limit their services to those who aren't in too much risk of fraudulent transactions and financial failure.

Additional Resources

High-risk industries

Risk assessment is a crucial step when establishing any type of business. You need to accurately assess your strengths and weaknesses to create a unique strategy that'll allow your venture to thrive. Here are the top riskiest industries in the U.S.

Still having trouble getting approved for a merchant account even with high-risk payment processors? Our team can help risky merchants find a suitable payment provider for their business so they can start accepting credit card payments on their website or in their brick-and-mortar store. Reach out to Processing Card today!

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