High Risk Payment Processing for Top High-Risk Merchant Industries

Aug 17, 2020

For businesses considered to be high-risk, the road ahead can be a real struggle. When a businesses receives this label, it makes it incredibly difficult to secure the merchant services and business funding needed to operate smoothly and grow. There are many reasons why a business might fall under the high-risk category. The following list includes the most common reasons:

  • The business belongs to a highly regulated industry
  • The business processes card-not-present (CNP) transactions
  • The business has reputational risk
  • The industry is known for experiencing high chargeback rates and fraud
  • The business handles high ticket transaction processing
  • The business offers recurring billing for products and services
  • The merchant has a poor (or no) credit history

Top High-Risk Merchant Industries

While many merchants can find themselves in this situation for one reason or another, certain industries experience this problem more often than others. Below is a list of the top high-risk industries, along with the unique challenges they face.

Adult Industry – Due to reputational risk, adult entertainment businesses are typically considered high risk. Even though these businesses have large transactions and are lucrative, getting a merchant account from a traditional bank is difficult, if not impossible.

Firearms – From hunting and recreation to target shooting, there are many reasons why people purchase guns. The risk involved, coupled with the heavy shipping restrictions the industry deals with, makes it hard to find a gun-friendly payment processor.

E-Cigarette/Tobacco/Vape – Heavy regulation with taxes, fraud and age restrictions are some of the top challenges these merchants face. Higher than average credit card reversals and ever-changing laws and scrutiny are also reasons why banks are hesitant about approving this industry.

Nutraceuticals – The main reason nutraceutical companies struggle to secure processing is due to massive chargeback rates. Customers often do not understand the terms when they sign up, and then later dispute the charge.

Pharmacies ­- Strict rules and regulation on drugs concerning safety is the biggest hurdle for online pharmacy companies. Frequent friendly fraud is also a problem these businesses encounter that banks have issue taking on.

Direct Marketing – Companies that sell services using a continuity model often experience high chargebacks. Customers often forget about signing up for the service and dispute the charge, resulting in devastating chargebacks that destroy the business’ reputation.

Multi-Level Marketing – There are several reasons traditional processors shy away from MLM companies, including high chargebacks, legal risks and unpredictable growth patterns. Unwilling to deal with such issues, MLMs are often denied payment processing.

Extended Warranty Services – High levels of customer disputes and fraud are the top reasons these businesses struggle to secure payment processing. The easiest solution is to provide the most convenient options for customers to pay.

Where to Secure High-Risk Payment Processing?

The key is to partner with a high risk processor that understands the challenges your industry faces, and is willing to work with your business’ unique needs. At eMerchantBroker.com, we believe every business deserves a chance to thrive. We work with less than perfect credit, past bankruptcies, startups with little or no credit history, companies that were hit with chargebacks and returns, and merchants that had accounts terminated by banks.

Our team specializes in providing payment processing solutions for businesses that require high-risk merchant accounts to process credit card payments. As a high-risk merchant account provider, we can help you get credit card transactions processed online in no time.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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