Merchant Accounts for High Risk Businesses

Nov 08, 2017

Who is a High Risk Merchant?

Any merchant who has one or more of the following characteristics is considered high risk:

  • irregular high-ticket sales
  • a record of high chargebacks
  • Falls in an industry that major banks are not willing to support, or
  • Any other highly regulated industry.

Note that this high risk merchant account classification depends on your industry category despite your individual company’s track record.  Moreover, merchants who have been abandoned by a past credit card processor, businesses whose owners have low credit scores and companies located outside the United States all fall in this category.

Why Merchants are branded High-Risk

Your bank’s underwriting regulations will determine whether you are high risk or not. Therefore, every processor or banking institution calculates risks in a different way. Generally, fraud and chargebacks will determine the level of risk. The more susceptible a business is to chargebacks, the higher the risk.

Though only one factor cannot be used to determine whether your business needs a high-risk merchant account, the following factors will also influence the decision:

  • Size of business
  • Location of business
  • Credit Card Processing History
  • High Chargeback Ratios
  • Credit History
  • Industry Category

Although most merchants are only categorized as high-risk after accumulating excessive chargebacks, some normally benefit from these accounts. The advantages include; recurring billing, multi-currency options, increased allowances on sales volume, and recurring billing.

How does one get a high risk merchant account?

The easiest option is to apply with a nearby merchant account provider. After taking you through their application procedure, your processor sends it to the underwriting team for reviewing. As soon as you’ve been approved, you can start accepting payments. This is usually very easy for high risk merchants as most high risk processors will readily accept any legitimate business as long as you submit all necessary credentials and meet pre-set requirements. Most of them will ask for:

  • A valid ID, e.g. a driver’s license
  • Printed Voided Check or bank letter
  • Most recent bank statements ( for the last 3 months)
  • Processing statements (for the last months but only if applicable)
  • A Social Security Number (SSN) or Employer Identification Number(EIN)
  • Your Chargebacks must be below 2%


If your business is considered high risk then you most probably need to consider a high risk merchant account if have to begin processing payments as soon as possible. Don’t waste your time applying with banks as they won’t accept you.

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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