High-Risk Credit Card ProcessingNot Ideal… but Sometimes it’s the Only Option

May 14, 2024 | 15 min read

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high-risk credit card processing

In a Nutshell

Certain factors, such as too many chargebacks, can land a merchant in the “high-risk” category. Among other things, that means you’ll need the services of a processor that is able — and willing — to serve high risk clients. How is that different from working with any other processor? How much will it cost? In this article, we’ll answer your questions and give some ideas for finding the right processing partner.

High-Risk Credit Card Processing: The Best Service Providers of 2024

When it comes to credit card processing, not all merchants are created equal.

Certain factors can saddle merchants with a “high-risk” label. These high-risk merchants typically face increased fees, more restrictions, and have limited options in terms of providers willing to work with them. 

Some merchants know from the start that they will need high-risk credit card processing due to the nature of their business. In other instances, merchants may be forced to go the high risk route because of other factors, like excessive chargebacks.

In this article, we’ll discuss the pros and cons of high-risk credit processing. We’ll also hook you up with a list of top-rated high-risk payment processors of 2024, which should help you find the right one for your business.

What is High-Risk Credit Card Processing?

High-Risk Credit Card Processing

[noun]/hī • risk • kre • dət • kard • prä • ses • iNG/

High-risk credit card processing is a subset of merchant payment processing services, targeted at merchants considered “high risk” by conventional banks. The processor will generally allow for greater risk exposure in exchange for higher fees.

There are multiple factors that can make merchant processing riskier than what’s considered “normal.” If we drill down, though, we see that the primary danger is the increased risk posed by chargebacks.

It could be due to the type of product or service being sold, or the average dollar amount for monthly sales. It could also be the regions or countries in which you do business. Any of these factors could make you more susceptible to fraud or abuse, as well as chargebacks resulting from that activity.

As a merchant, you will ultimately pay the price for chargebacks. However, processors and banks have risks, too. In fact, the average chargeback will cost your bank $26 per incident due to processing costs and fees assessed by the card networks. This adds up over time; banks and processors could be open to millions of dollars in potential losses each year.

Entities that offer high-risk credit card processing are willing to take on that added risk. They will let you take on greater risk exposure than a bank or processor would typically allow. But, as we’ll see in the next section, this freedom comes at a cost.

What Makes a Business “High Risk?”

Being a high-risk merchant doesn’t necessarily mean your business is more untrustworthy than your counterparts. In fact, all it really means is that processors expect to see a higher rate of disputes filed against your store.

This could be due to elements inherent to your business, such as the type of product or service being sold, or the average dollar amount for each sale. It could also be the regions or countries in which you do business. For example, certain verticals like gambling, adult entertainment, or dating sites, are more prone to chargebacks.

See a partial list of high-risk verticals

On the other hand, merchants with a history of excessive chargebacks can also be deemed high risk, regardless of product vertical. Their chargebacks can be due to anything from internal policy errors to friendly fraud. Other factors, such as your business’s credit score or how long you have been in business, can also have an impact.

To the processor, however, the source of your potential claims is immaterial. Risk is solely estimated based on how many chargebacks they expect you to have.

Pros and Cons of High-Risk Credit Card Processing

We’re not saying that high-risk processing is desirable, per se. Becoming a high-risk merchant shouldn’t be a business goal or anything.

What we are saying, however, is that conducting payments with the help of a high-risk processor can be a viable path forward. In some cases, this can even be a highly-profitable option. That’s why many eCommerce merchants actually prefer it over conventional payment processing.

Chargebacks putting your business at risk? Good news: help is just one click away.REQUEST A DEMO

Let’s look at some of the pros and cons of working with high-risk credit card processing companies. This will give you a better impression of what to expect.

Pro

Global Expansion

Standard processors can restrain or prohibit merchants from transacting in multiple currencies. They may also restrict you from selling to customers outside of regions like the United States or Western Europe.

The earning potential tied to international sales can make high-risk credit card processing seem more appealing.

Con

Higher Service Costs

All processors work on the assumption that high-risk clients will inevitably produce more chargebacks. They may require higher setup charges and impose larger monthly fees to offset this risk. The ongoing cost of processing will also be more than what merchants would otherwise pay.

These excessive charges can make high-risk processing less appealing.

Pro

Billing Flexibility

Processors can limit the amount of revenue standard merchants generate via subscription billing. They can also set limits on the types of products or restrict high-ticket sales.

In contrast, high-risk processors can allow for increased flexibility in billing practices.

Con

Merchant Account Reserves

Many high-risk payment processors require a merchant account reserve. This is a non-interest-bearing savings account used by the acquiring bank as a type of insurance against chargebacks.

Merchants won't be able to access the money in reserve until 180 days after the initial transaction. This delay can make high-risk business untenable, even without chargebacks.

Pro

More Business Types

There is a long list of products and services that credit card networks see as too risky for standard merchants. Many travel, telemarketing, gaming, tobacco, and pharmacy businesses will be prevented from working with a traditional credit card processor.

With a high-risk merchant account, however, you can sell products in just about any merchant category code (MCC).

Con

Reputational Damage

Working with a high-risk payment processor may be your best option, but you should use caution when deciding to go this route.  If your business is labeled "high-risk" due to excessive chargeback issuances, you may be unable to engage with traditional payment service providers in the future.

Merchants who use a high-risk processor can often maintain a higher chargeback ratio without risking the loss of their processing. This can be appealing to merchants who have a higher-than-average chargeback liability.

Pro

Higher Chargeback Threshold

Standard merchants must keep their chargeback issuances within a narrow, acceptable range. Otherwise, they could lose their ability to process payments, and can end up on the MATCH List.

The earning potential tied to international sales can make high-risk credit card processing seem more appealing.

Con

Higher Chargeback Fees

A high-risk payment processor may be willing to work with merchants with high chargeback rates, but this willingness comes at a cost. The processor will usually assess higher fees for each individual dispute.

These fees add up quickly and are a major disadvantage of high-risk processing.

The Best High-Risk Credit Card Payment Processors

We’ve covered what high-risk processing is. We looked at some of the pros and cons of working with high-risk credit card processing services. But, where do you start your search for high-risk credit card processing services?

Not to worry. We’ve already done the work of compiling some of our “best of the best” high-risk credit card processing companies. Check out our list of some of the best high-risk processors of 2024 below (arranged in alphabetical order):

High-Risk Credit Card Processing

Durango Merchant Services

Durango Merchant Services  is highly regarded for its exceptional customer support. They specialize in finding accounts for merchants with poor credit or excessive chargebacks. Durango supports transactions in various currencies, including crypto. The company also offers fraud protection and gateway integration.

Partial List of Verticals & Product Focus:

International, offshore, credit repair, bad credit, vaping & supplies, fantasy sports, nutraceuticals, MLM, membership/subscription, travel, dating

Durango Merchant Services Pricing:

While Durango does not advertise its pricing, custom quotes show that the monthly fee starts at $10 and access to the payment gateway can cost an additional $10–$15 per month.

Pros:

  • Serves high-risk companies globally
  • Offers fraud protection services 
  • Supports processing for cryptocurrency transactions
  • High customer reviews

Cons:

  • Fee details only available by quote
  • Monthly fees and minimums
  • Doesn’t support all high-risk businesses

Learn more about Durango Merchant Services


High-Risk Credit Card Processing

Easy Pay Direct

Easy Pay Direct offers an exclusive payment gateway designed to be user-friendly. The company’s unified solution handles high-volume transactions and  multiple merchant accounts through a single payment gateway. They also offer unlimited transactions for high-value purchases and have high customer feedback.

Partial List of Verticals & Product Focus:

Information products, supplements, CBD, SaaS, general eCommerce, MLM, adult industry, nutraceuticals, alcohol, firearms & ammunition, high-ticket

Easy Pay Direct Pricing:

There are no specific fees available, but historically there has been a one-time $99 setup fee, and monthly account fees starting at $24.95/month.

Pros:

  • Transparent pricing
  • Free virtual terminal
  • Extensive third-party integrations

Cons:

  • US & Canada only

Learn more about Easy Pay Direct


High-Risk Credit Card Processing

Fasto Payments

Fasto Payments provides an "all-in-one" solution for high-risk merchants. They connect customers with over 100 different card processors, offering chargebacks alerts, cryptocurrency processing, and more than 20 alternative and local payment methods. They also provide live 24/7 support for customers.

Partial List of Verticals & Product Focus:

Adult entertainment, CBD products, cryptocurrencies, dating, financial services, gambling, gaming, hospitality, travel.

Fasto Payments Pricing:

Fasto has no online pricing information.

Pros:

  • “All in one” services
  • 24/7 customer support
  • Chargeback alerts

Cons:

  • Website does not disclose pricing
  • Website does not disclose pricing

Learn more about Fasto Payments


High-Risk Credit Card Processing

Host Merchant Services

US-based Host Merchant Services (HMS) offers interchange-plus pricing exclusively and are known for their customer care. The company is an excellent option for companies with monthly sales exceeding $10,000. Clients enjoy low interchange fees and pay-as-you-go contracts.

Partial List of Verticals & Product Focus:

Adult entertainment, CBD products, cryptocurrencies, dating, gambling, travel, pawn shops, gambling, loan modification companies

Host Merchant Services Pricing:

HMS uses interchange-plus pricing exclusively, offering month-to-month billing with no early termination fees, no setup or application fees, and no monthly minimums.

Pros:

  • Wide range of integrations
  • Excellent customer service
  • Transparent pricing

Cons:

  • High startup costs
  • Monthly fees
  • Limited subscription management features
  • Only works for merchants based in US

Learn more about Host Merchant Services


High-Risk Credit Card Processing

Inovio

Inovio emphasizes the flexibility and seamless integration of their platform, which works with multiple payment technologies. Their platform combines essential features with extensible data and clean interface to make the gateway experience frictionless.The platform also includes adaptable APIs.

Partial List of Verticals & Product Focus:

Adult, bail bonds, coaching, collections, dating, eBooks, fantasy sports, firearms & ammunition, gaming, nutraceuticals, telemedicine, travel.

Inovio Pricing:

For the most part, Inovio does not publish rates on their website. They do mention a separate fee schedule that is available once terms have been negotiated. This suggests a tiered or tailored pricing model.

Pros:

  • Quick setup
  • Dedicated relationship manager
  • Ability to keep cards on file

Cons:

  • Fees aren’t listed online
  • Early termination fee
  • Limited integrations

Learn more about Inovio


High-Risk Credit Card Processing

Instabill

Instabill specializes in international high-risk accounts which can be set up to accept over 150 major currencies. Other services include EMV card readers and swipers, mobile payments, and ACH processing, plus eCommerce solutions including virtual terminals and payment gateways.

Partial List of Verticals & Product Focus:

Adult, bail bonds, dating, CBD/hemp, gaming, gambling, financial consulting, vaping/eCigarettes, nutraceuticals, telemedicine, travel.

Instabill Pricing:

Instabill offers a Merchant Account Fees page explaining why it can’t give you a firm quote without more information. Instabill does not require a fixed contract length.

Pros:

  • Fast application process
  • Highly rated tech support
  • Fraud prevention tools

Cons:

  • Costs may be higher than other providers
  • Typically requires a rolling reserve
  • Higher termination fees and fees for withheld funds

Learn more about Instabill


High-Risk Credit Card Processing

PaymentCloud

PaymentCloud is another high-risk processor known for exceptional customer service, with direct involvement and guidance both during and after onboarding. The company can process payments via credit card, ACH, eCheck, or cryptocurrency, as well as a range of transaction modes.

Partial List of Verticals & Product Focus:

CBD oil, firearms & ammunition, adult entertainment, credit repair, bad credit, vape/eCigarettes, airlines, tax preparation.

PaymentCloud Pricing:

PaymentCloud doesn't offer a uniform fee structure like many providers catering to high-risk merchants. You’re likely to have a monthly minimum processing charge of around $25, but minimal other fees compared to some other providers.

Pros:

  • Dedicated account manager
  • Same-day setup
  • No cost-credit card processing

Cons:

  • Fees aren’t listed online
  • Monthly volume limit
  • Not for Ultra High Risk

Learn more about Instabill


High-Risk Credit Card Processing

PayKings

PayKings offer affordable merchant services, online credit card payment processing, and multiple other services to help merchants get sustainable payment processing in high risk industries. All offerings can be seamlessly integrated with the merchant’s existing platform.

Partial List of Verticals & Product Focus:

Adult entertainment, CBD, credit repair, firearms, hemp, nutraceuticals, travel, vape/eCigarette, pawn shops, collectables, dating.

PayKings Pricing:

PayKings provides customized pricing for each merchant individually. The company advertises rates “as low as 2.49%,” which usually implies tiered pricing. Amounts will vary depending on volume and vertical.

Pros:

  • No setup or application fees
  • Multiple currency options
  • Some chargeback protection offered

Cons:

  • No clear prices on website
  • Early termination fee
  • Some complaints of slow response

Learn More about PayKings


High-Risk Credit Card Processing

Payline

Payline believes in transparency. They were the first company to display merchant processing fees directly on their website. The company’s omnichannel solutions provide options for businesses across all industries and sizes, tailored to fit individual needs.

Partial List of Verticals & Product Focus:

Businesses with long delivery times, credit & debt relief, medical marijuana, retail cannabis, tobacco/vape, travel.

Payline Pricing:

Payline uses an “interchange plus pricing” plan due to its transparency. Customers can take advantage of the wholesale rates set forth by the card brands. Payline then adds a small service fee.

Pros:

  • Competitive, transparent pricing
  • No cancelation fee
  • Dedicated account managers

Cons:

  • Occasional complaints of unexpected fees
  • Monthly fees
  • Need separate plans for in-person vs. online processing

Learn More about Payline


High-Risk Credit Card Processing

Soar Payments

Soar Payments specializes in payment solutions for hard to place merchants, especially those labeled “high risk.” The company offers merchant accounts, ACH, payment gateway, and related payment technology, along with competitive pricing, a straightforward application procedure, and outstanding customer service.

Partial List of Verticals & Product Focus:

Antiques & collectibles, CBD products, subscription/recurring payments, credit repair, fantasy sports, firearms, travel, MLM, nutraceuticals, SaaS

Soar Payments Pricing:

Soar keeps their customer fees private, but provides instant online quotes, with no offline paperwork. Online quotes are based on “industry minimum” pricing that eliminates haggling.

Pros:

  • Instant online quotes
  • Robust customer support based in the U.S
  • Responsive customer service

Cons:

  • Not global
  • Does not work in certain verticals

Learn more about Soar Payments


Avoid High-Risk Processing by Controlling Chargebacks

Even with all the challenges, some merchants still gladly opt for high-risk credit card processing. For some, it’s the cost of securing bigger payoffs. For others, it is simply their only option. 

If there is an upside to that, it may be that high-risk providers are also less likely to close your account because of excessive chargebacks. Maintaining a high-risk merchant account may be costlier, but it may give you more opportunity to get your chargebacks under control.

That said, if you are experiencing an elevated chargeback rate and don’t want to be forced into the high-risk category, there is an alternative: chargeback prevention.

Chargebacks911® helps sellers in all MCCs, sales models, and product verticals to avoid excess chargebacks. Our platform also enables high-risk merchants to recoup revenue that would otherwise be lost to fraudulent chargebacks.

To learn exactly how much you could be saving, contact us today for a free, no-obligation chargeback analysis.

FAQs

How much does a high risk payment processor charge?

Individual rates depend on the processor, but most high-risk merchants will pay 0.5% to 1% higher than low-risk businesses. The average high-risk processing rates range from 2% to 10% or more per transaction. Providers may also charge a $10 to $50 monthly fee for high-risk accounts, and rates could fluctuate depending on the perceived risk level.

What are the disadvantages of a high-risk merchant account?

Downsides of using a high-risk merchant account include higher processing costs, required account holds or rolling reserves, and increased compliance and regulatory restrictions. Chargebacks and customer disputes may be more common in high-risk businesses, and the choices for providers will be limited.

What makes a merchant high-risk?

The high-risk label can come from a number of factors, including high transaction volume, high average ticket size, or low credit score. You may also have a historically high chargeback ratio or high potential for credit card fraud. Limited business operating history could also be a factor.

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