A high risk merchant account works differently than low-risk accounts. Discover more.

Monday, November 1st, 2021

High-risk merchant accounts can be a good fit for businesses with a high chargeback ratio and those prone to fraud or restricted by other violations. To qualify for a high-risk account, you must pass the verification process and meet the financial requirements of the bank.

These accounts accept applications from businesses that would typically have trouble receiving payments through traditional means, such as online gambling sites, mail-order pharmacies, or adult content providers. They also have higher fees than standard merchant accounts because they require additional security measures when processing payments.

What are High-Risk Transactions?

High-risk transactions included those that are considered high-risk due to the nature of the product or service being sold. 

For example, purchases involving restricted products like sex toys or e-cigarettes are listed as high-risk transactions. That’s because they have a history of excess chargebacks in the past – especially fraudulent ones – and might be riskier than other types of transactions.

High-Risk Merchant Accounts: What are They?

There are two types of merchant accounts: high-risk and low-risk merchant accounts, also known as standard or traditional accounts.

High-risk merchant accounts are simply merchant accounts that are considered risky or high risk. Your business must use a high-risk account if it is prone to chargebacks, fraud, or other types of losses to the acquirer–usually because of the types of goods or services the business sells.

Because of the risk factors, high-risk businesses will likely pay more than low-risk businesses for their merchant account services.

What are the Fees for High-risk Merchant Accounts?

When you sign up for a high-risk merchant account, it can be hard to decipher all terms and fees. You might think that they are just like any other credit card processing fees, but there are some primary differences. 

In essence, any retailer that accepts credit card payments faces varied and complex fees. The merchant account provider sets the interchange fees for each type of transaction (credit, debit, etc.). The processor then takes these fees and adds their markup to them. Both charges are higher if you run a high-risk account.


Because of the same risk factors discussed above, your high-risk account may face some restrictions, e.g., caps on the average transaction value. With so much to consider, you want to understand the intricacies of the merchant account offer at hand before signing up.