High Risk Merchant Accounts

A High Risk Merchant Account is typically required for certain business types, that are deemed “Undesirable” by the card associations. These businesses include a whole host of different business types, including the adult industry, travel industry, and many others that we will cover below. There are various reasons why these businesses are “Undesirable”, but for the most part the “Risk Of Chargeback” seems to be the underlying factor, as majority of these High Risk Business Types have a history of getting a high percentage of chargebacks vs other business types.

Chargeback is when a customer gets a particular charge “Reversed”, by complaining about the transaction with their credit card issuing bank. Several complaints can get any merchant account shut down, sometimes shut down forever.

Here are a few common types of “High Risk Merchant Types”:

  • Adult Industry
  • Bail Bondsmen
  • Coin Shops
  • Escort Service
  • High Ticket Sales
  • Gun Shops
  • Online Pharmacy
  • Ticket Sales
  • Time Share Sales
  • Travel Related
  • Water Purifiers

The first place to start when looking for a High Risk Merchant Account would be with a company that both specializes in traditional and high risk accounts. Note, different banks will accept different levels of risk, so you may have a chance getting a traditional merchant account, without the added cost of associated with high risk.

If that fails and you are told that a traditional merchant account is out of the question, you’ll need to proceed with the “High Risk” application. Keep in mind that you will need several documents and may have to jump through some hoops, but with a little perseverance and a lot of patients, you can be successful in getting approved to accept credit cards.

Things To Expect:

  • High Risk Application Fee
  • Potential Association Fee
  • Financial Statements
  • Business License
  • Articles Of Incorporation
  • Principal Statements
  • Marketing Materials

In closing, accepting credit cards in certain business types can seem impossible at times, but if you partner with an industry specialist, your odds of success are greatly increased. Keep in mind that your success is not guaranteed, as certain factors, such as lack of credit, lack of financial strength, or previous terminations of merchant accounts, can stop you from getting approved.

Good Luck.

1st National Processing may be able to assist you in obtaining a High Risk Merchant Account for your business.