Can a High Risk Business Get a Merchant Account?

Though consumers don’t always realize it, using or accepting a credit card is actually taking out a loan. When you purchase something with a card, it’s because you don’t have cash on you. You might not even have it in your bank account. So you ‘borrow’ money from the bank, use it to pay for goods or services, then pay it back with interest, all with a single swipe.  Likewise, when the merchant accepts a credit card, the bank is loaning them the money on the assumption that they will receive it from the cardholder’s bank, and that the charge will not be reversed later because of fraud or chargeback liability.

For this reason, credit card companies need to know your rating before they offer you a card. They want to be sure you can pay back the money you have used. Credit checks are even more detailed for business accounts. When you’re running a business, it’s not just about the credit card that your business owns. It’s about accepting cards from your customers.

A second chance for high risk businesses

If your business is considered ‘high risk’ it means your customers’ transactions might be reversed frequently. This racks up return costs and cancellation charges that can cost the bank money. That’s why many card processors avoid dealing with ‘high risk’ businesses.

Your business may also be classed as ‘high risk’ if it has a high possibility of collapsing, leaving the bank on the hook if your transactions are reversed. ‘High risk’ industries include construction, gambling, pawn shops, technology, gun stores, health supplements, and more. They may also include businesses that trade internationally.

Recover from bad credit and bankruptcy

Aside from ‘high risk’ business categories, a business may be treated as a high-risk business if the business or its owner has a poor credit history or no credit history at all, particularly if they have had a prior bankruptcy.

When you’re looking around for a payment processing partner, make a list and do a little research on each merchant account provider. First, check their security measures. They should have high levels of encryption (ideally military-grade, if possible) to prevent the security of your account, and to protect your customers.

Your merchant account should be compliant with PCI QIR, which has elements of protection specifically with ‘high-risk’ business in mind. Look at your payment processor’s client list, and where possible, get in touch with the companies they have mentioned. Make sure they are verified, active, happy clients.

You should also check their rates. Some processors may overcharge you because they know your options are limited. Find a merchant processor that has low rates for every transaction. They should get your cash into your bank account as fast as possible, preferably within 24 to 72 hours. This could help improve your credit rating.

For more information on merchant accounts for a high risk business, or to sign up for a merchant account, please call (888) 924-2743 or go to

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