High Risk Merchant Accounts

If you’ve had some difficulties securing a traditional merchant account through a bank, it could be that your business is classified as high risk. While this isn’t necessarily a bad thing, it can definitely make your payment processing a little more complicated. If your business has been deemed high-risk, you’re likely in the market for a high risk merchant account.

We specialize in high risk merchant accounts and other services that help businesses grow, despite their high risk classification. We have consultants available to talk through the process with you and help you choose the best option for your business.

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What is a High Risk Merchant Account?

A high risk merchant account is an account that is offered to businesses who are unable to secure an account with a traditional bank or lender. It allows businesses in this category to process credit and debit cards as payment options for their customers. They often carry higher fees for transactions, but are usually the only option for high risk merchants.

Why is My Business Considered High Risk?

There are a variety of reasons for which a business could be deemed high risk. This classification can involve a variety of different factors and is different for each bank, lender or credit card processor. There are some typical trends in this classification, though. Most of them fall into one or more of the following categories:

  • High propensity for chargebacks
  • High risk of fraud
  • High average transaction amount
  • Bad personal debt as a sole proprietor
  • Businesses that offer subscriptions or memberships
  • Businesses that include multi-level marketing or pyramid schemes

There are also a variety of specific industries that tend to fall into the high risk category. Here are some of the most common ones:

  • Adult entertainment
  • Beer, wine and liquor
  • Cannabis and CBD
  • Credit repair and debt consolidation
  • Firearms and ammo
  • Gambling and gaming
  • Health & wellness programs
  • Nutraceuticals
  • Tobacco and vaping

This is not a complete list of all the industries that could be labeled as high risk and every credit card processing company is different. Your business may be considered high risk by one processor, but not by another. However, if you’ve tried multiple vendors and they all classified you as high risk, MMS is here to help.

High Risk Merchant Account Fees

With a high risk merchant account comes higher fees than a low risk account. Although many payment processors are willing to grant high risk accounts, they generally come with fees that are designed to cover the additional risk. However, the parameters around high risk accounts have come a long way and it’s in your best interest to choose an account provider who is progressive.

When high risk merchant accounts first came into the marketplace, their per-transaction fees were excessive. They also charged setup fees, monthly fees, annual fees and even PCI fees! If you’re in the market for a high risk account in today’s economy, you have options and we are here to guide you.

For example, you should thoroughly review your contract before signing on the dotted line with any merchant account provider. You should look for early termination fees, setup fees and other ways in which a merchant account provider might try to nickel-and-dime you. MMS offers contract terms that are affordable, reasonable and easy to navigate.

We also offer competitive fee structures and the ability to negotiate your terms. If your business requires a high risk account because you’re overcoming some bad personal debt, we understand that your circumstances will change as your work to rebuild that credit. If your business is in an industry that is commonly classified as high risk and that’s not going to change anytime soon, we understand that, too.

Pros and Cons of High Risk Merchant Accounts

The most obvious disadvantage to a high risk account is the higher fees that you have to pay for their processing services. Others might include more stringent contract guidelines and other potential fees associated with the contract itself. However, there are also several benefits to a high risk merchant account. These include, but aren’t limited to:

  • Global payment processing
  • Higher chargeback tolerance
  • Subscription services

A high risk merchant account allows you to accept payments from a larger audience base. You can accept payments in multiple currencies from all over the world. This opens a whole new base of potential customers that you may not have considered before.

High risk accounts like those offered by MMS offer more flexibility with chargebacks than a low risk merchant. While banks may require a low risk merchant to be at a 1% or lower chargeback ratio, our high risk accounts can go much higher than that. You won’t have to worry about your account being terminated due to high chargebacks.

Subscriptions are becoming more and more prevalent in the marketplace, but can present a pretty big risk to the lender who is sponsoring the merchant account. MMS understands this and we are willing to work with merchants who accept this type of revenue. This allows your business to run as planned, rather than changing your business model to fit what the lender will allow.

Why a High Risk Account with MMS?

MMS is your partner in business. We can help you choose the right solutions for you by offering expertise, flexibility and consulting. If you need guidance on the best options for your business, we can help with that!

We help high risk merchants succeed by offering flexible terms, customizable products and transparent billing. Processing fees can sometimes be difficult to understand and incredibly complicated. MMS offers simple, transparent fees, high-quality solutions and peace of mind.

Just because your business is classified as high risk doesn’t mean your life should be difficult. It means you need a partner by your side to support you every step of the way, and that’s what we’re here to do.