Best High-Risk Merchant Account Service Providers Of 2024

• PaymentCloud: Best overall
• Host Merchant Services: Best for large high-risk businesses
• Durango Merchant Services: Best for highest-risk businesses
• SMB Global: Best for international merchants
• Soar Payments: Best for United States-based businesses

The Forbes Advisor Small Business team is committed to bringing you unbiased rankings and information with full editorial independence. We use product data, strategic methodologies and expert insights to inform all of our content and guide you in making the best decisions for your business journey.

We reviewed several merchant account companies using a detailed methodology to help you find the five best high-risk merchant account providers. Our ratings consider multiple factors that included having a transparent fee structure, offering contactless payments and invoicing, if advanced features like offshore account support and chargeback monitoring were available, plus real user reviews on third-party websites. All ratings are determined solely by our editorial team.

A payment processor may label a merchant account as high-risk if they’ve determined your business account is at higher risk for chargebacks, fraud or a high volume of returns. The greater the risk, the harder it will be to find a traditional bank or payment processing service provider. Still, you’re not out of luck, as many vendors specialize in serving high-risk businesses.

Reasons a Merchant May Be Considered High-risk

There are many reasons a payment processing platform may characterize your account as high-risk. Every provider has a different set of criteria, but here are some general guidelines around what may be labeled high-risk:

• High transaction volume: Merchants may be considered high-risk if they have a high volume of transactions or have a high average transaction rate. If a merchant processes over $20,000 in payments per month or has an average transaction of $500 or more, they may be classified as high-risk.
• Accepting international payments: If a merchant sells to customers internationally in countries that are listed as high-risk of fraud, they may be considered high-risk (any country except the U.S., Canada, Japan, Australia or the countries in Europe).
• New merchant: If a merchant has never processed payments before or only has a minimal history of processing transactions, they may be considered high-risk because they don’t have a track record.
• High-risk industry: While a merchant may have a spotless record, they may be labeled high-risk because the industry they are working in is considered to be at a higher risk of fraud, returns or chargebacks. For example, subscription-based companies are labeled high-risk because many people sign up for a trial and forget to cancel their payments. When they look over their statements and see the forgotten charges, they often charge back the payment.
• Low credit score: If the merchant has a low credit score, they may be deemed high-risk.

Types of Businesses Commonly Considered High-risk

It’s helpful to know ahead of time whether your industry is considered high-risk so you can plan accordingly. Some businesses that typically fall into this category include:

• Adult industry
• Travel, including airlines, cruises and vacation planners
• Furniture and electronic stores
• Gambling
• Online dating
• E-commerce
• Multilevel marketing (MLM)
• E-cigarette, cannabidiol (CBD) and vape shops
• Subscription services and companies with recurring payment plans
• Debt collection

Before choosing a payment processor, you’ll want to read the contract carefully, as every bank and payment processing platform is different and has different terms for the merchants they label high-risk. As you look for the best high-risk merchant account service provider, keep these considerations in mind:

• Who does the vendor accept? Even account providers that specialize in high-risk merchants don’t accept all businesses. If you’re an offshore company, have very poor credit or operate an especially higher-risk business, look for vendors that cater specifically to your circumstances.
• Higher fees: Vendors tend to balance their risk in serving your business by charging higher fees than low-risk merchants would pay.
• Your credit score matters: A business owner’s or business’s low credit score could impact the approval odds for a merchant account. If you’re being rejected for merchant accounts, you may have to work on your credit score for a better chance.

When you apply for a merchant account, you’ll be required to provide business and tax documents. After your application has been processed, your payment provider will assess whether you are a high-risk or low-risk merchant and adapt their plan accordingly.

Every credit card processing platform is different, but high-risk merchant accounts will be subject to higher fees across the board. Generally, processing fees for all transactions will be higher, sometimes more than double that of low-risk merchant accounts. Although low-risk merchants are also paying a chargeback fee (a fee you pay when a customer disputes the charge directly with their credit card), high-risk merchants generally pay higher chargeback fees.

A high-risk merchant may be obligated to lock into longer contract terms, an early termination fee or a monthly or annual fee. High-risk accounts may also be subject to a rolling reserve, where the payment processor holds a certain percentage of your income until it can further verify your transactions were not fraudulent or at risk of chargeback.

There are a few general characteristics that make a merchant low risk to a payment processor. Low-risk merchants typically have:

• Low transaction volume (less than $20,000 per month)
• Average transactions under $500
• Operations in one country that is labeled low risk (the U.S., Canada, Japan, Australia and the countries in Europe)
• One currency
• Very low or zero chargebacks and a low percentage of returns
• Industries labeled low-risk

Keep in mind that your risk status can change as your business develops. For example, if you go through a high period of growth, your provider may start considering your business high-risk. If you expand to work in different countries or shift industries, a payment processor may consider this a change in risk level. If this happens, your payment processor will either change your status or may drop you as a client if they do not support high-risk merchants, at which point you’ll need to find a new provider to process your payments.

To choose vendors that are the best fit for high-risk merchants, Forbes Advisor researched the industry and analyzed several different providers. Businesses operating in high-risk industries will have different needs than most. As a result, we were specifically looking for providers that provide services to these merchants.

Then, we each provider according to how well they scored in five categories of features using 15 different metrics that were weighted to favor features that high-risk small business owners find valuable in a provider. The following is a breakdown of the categories we used to rank the providers that made the top of the list.

Pricing

Many consumers value a transparent fee structure. Companies that provide this information up front were rated more highly than if contacting a representative is required. Companies that offered online quotes for their pricing also fared better in our ratings. Pricing accounted for 10% of our weighted scoring.

Features

Different businesses will have varying levels of needs. Companies that provide versatile options to meet those needs received higher scores. Features we looked for include a reporting dashboard, invoicing, data exports, contactless payments, chargeback monitoring and fast deposits.

Additionally, having reliable, accessible support, including offshore account support, is crucial when things go awry. Companies with multiple channels of communication available were rated more highly than those that rely solely on limited channels. We weighted features at 60% of our total score.

Third-party Reviews

We took a look at reviews and recognition from customers and third-party reviewers to see what actual users think of the services. Companies were scored both on the average rating and the number of reviews. The review sites we looked at included the Better Business Bureau (BBB), Capterra and Trustpilot. Reviews given by real users that scored high (4 out of 5 or higher) fared better in our rankings. These accounted for 15% of the total score.

Expert Analysis

For our final review, we looked at a high-risk merchant service provider’s popularity and stand-out functionality as noted by real users to determine our expert’s score, which made up 15% of the total score.

Featured Partners

Advertisement

1

Stax

Free Trial

No

Offers

First Month Free

Pricing

$99 per month, 7 cents to 15 cents per transaction plus interchange rate

1

Stax

866-455-0201

Learn More

On Stax's Website

2

Paysafe

Free Trial

No

Offers

SAVE or get a $200 gift card + FREE payment equipment*

Pricing

Industry-low rates starting at $0.15 batch fee + 0% Cash Discount Plans available

2

Paysafe

866-606-3741

Learn More

On Paysafe's Website

3

Payment Depot

Free Trial

No

Offers

$0 Setup & No Cancellation Fees

Pricing

Customized Interchange+ Pricing - Rates as low as 0.2% - 1.95%

3

Payment Depot

833-522-0568

Learn More

On Payment Depot's Website

4

Finix

Free Trial

No

Offers

Save up to 40% on credit card processing

Pricing

Transparent subscription-based pricing with 0% markup on interchange fees

4

Finix

712-218-1023

Learn More

On Finix's Website

• What Is a Merchant Account
• Is A Merchant Cash Advance Right For Your Business?
• 4 Ways To Accept Payments Online
• How To Accept Credit Card Payments
• Chase Payment Solutions Review
• What Is A Merchant ID?