High Risk and Low Risk Merchant Accounts

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Chargeback ratios

If you have a high chargeback ratio, your business may be classified as high risk. Higher chargeback ratios can cause you to lose business and get terminated by your processor. Fortunately, there are several steps you can take to reduce your chargeback ratio and keep revenue in your business. First, take steps to protect yourself from fraud. Credit card fraud is one of the top reasons for chargebacks and follows identity theft. In fact, the rate of credit card fraud increased by 18.4% in the year 2018.

Another way to decrease chargebacks is to send automatic email confirmations. Providing a confirmation or receipt to customers will lower chargebacks and the likelihood of fraud. It’s also important to follow up with your customers and keep them informed about any disputes. By doing this, you will avoid penalties and possible account closure.

Also, Read-How Productivity of Business Improve By Digital Asset Management?

Rolling reserve

If you decide to go with a rolling reserve, make sure you fully understand its terms and conditions. You can find these details in your contract, or you can talk to a sales representative to get more information. Important things to consider include the length of the reserve and the type of transactions that you will accept.

When you are choosing a merchant account, you may come across the term “rolling reserve.” This is a type of subaccount that holds funds to cover chargebacks. This money is then deposited into your business bank account. While you may not like the idea of having to keep money on hand, it can save you time and trouble in the long run.


You should also be aware of set-up fees. These can easily run into a couple of thousand dollars. You may also be able to get them waived or at least reduced. To minimize the costs, look for a payment processor that offers flexible pricing.

As with all other kinds of accounts, high-risk merchant account fees can vary widely, but you should always read the fine print before signing a contract. This will allow you to negotiate the best rates and avoid unexpected costs.

Approved industries

If your business is considered high-risk, you may want to consider applying for a merchant account from a High-Risk Merchant Service Provider. These companies have high approval rates with banks and a comprehensive list of industries they work with. Some of the industries these companies work with include: gambling, adult entertainment, cannabis, tobacco and vaping, CBD, and others.

In addition to online businesses, High-Risk industries can also be businesses that operate outside the U.S., Canada, and Australia. They typically sell subscription services and high-priced items. Also, these industries are located in countries that are considered high risks, such as South Korea and Japan.

Some of these industries are also very risky because they may have a history of financial troubles or failed businesses. Standard merchant account providers do not approve of these industries. High-risk merchant service providers specialize in these industries.

Also, Read- High-Risk Merchant Processors

Underwriting criteria

In the process of determining whether you qualify for a merchant account, underwriters evaluate several factors to determine the risk associated with your business. Some of these factors are related to your industry, billing procedures, and cash flow. For example, businesses that bill their customers in advance for their products or services may pose a higher risk. These businesses may also have a history of chargebacks.

Many credit card processing companies consider businesses in certain industries as high risk. These industries include the adult entertainment industry, games, collectibles, and subscription services. These industries often have high transaction amounts and are subject to government oversight.

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