6 Best High-risk Merchant Account Providers in 2023
This article is part of a larger series on Payments.
A high-risk merchant account is used when financial institutions consider a business highly susceptible to chargebacks and fraud. Having a high-risk business makes it harder to open a merchant account, just like certain factors can impact your business’s ability to get insurance coverage or financing. Those that have been declined for a traditional merchant services provider can opt for a high-risk merchant account instead.
High-risk merchant account providers are supported by banks ready to bear the risk of transactions likely to suffer from fraud. By partnering with these banks, high-risk merchant service providers are able to work with businesses or individuals with less than stellar credit.
Based on our evaluation, the best high-risk merchant account providers are:
- Best overall (and most versatile): PaymentCloud
- Best for online and international sellers: Durango Merchant Services
- Best one-stop shop: First Card Payments
- Fastest application process: Soar Payments
- Best for chargeback monitoring: SMB Global
- Best for online CBD sales: eMerchantBroker
Top High-risk Merchant Accounts Compared
Estimated Monthly Account Fee | Contract Length | Cancelation Fee | Estimated Chargeback Fees | Chargeback Protection Tools | Works with MATCH List Businesses | |
|---|---|---|---|---|---|---|
 | $10–$45 | Month-to-month | Waived | $25 | ✓ | ✓ |
 | $30 (w/ payment gateway) | Month-to-month | $0 | $25 | ✓ | ✓ |
 | Custom | Mostly month-to-month | $0 | $15–$35 | ✓ | ✓ |
 | $19–$45 | 2–3 years | $0 or $200–$395 (depends on industry) | $25–$30 | Integration w/fee | ✕ |
 | Not disclosed | Month-to-month to 3 years | $500 (standard high risk) | Not disclosed | ✓ | Not specified |
 | Custom | 1–3 years | $0–$595 (depends on processing bank) | $35 (max) | Integration w/fee | ✓ |
Please note that actual high-risk merchant fees are always custom-quoted based on specific business factors. Figures shown in this guide are averages and estimates we obtained from each processor.
MATCH (Member Alert to Control High-risk Merchants) list: A list of businesses with one or more merchant accounts previously closed by their acquiring banks. This database is created and managed by Mastercard and is typically used by acquiring banks to screen merchant account applicants. Previously, this was known as the TMF (terminated merchant file) list.
PaymentCloud: Best Overall for High-risk Merchant Accounts
Overall Score:
4.71 / 5
Pros
- Works with most ecommerce platforms and all payment gateways
- Fast application and setup
- Seamless merchant account migration
Cons
- Monthly fees for payment gateway and virtual terminal
- Limited customer support hours
PaymentCloud has a very hands-on approach, helping businesses through the application process and using multiple backend processors to find the lowest rates. Once you are onboarded, it continues to offer dedicated support for key functions, such as cardholder subscription migration management and advanced fraud/filtering setup for your payment gateway.
PaymentCloud also makes migrating easy by providing you with a pricing structure you’re familiar with (fixed-rate, interchange-plus, tiered). It integrates with all payment gateways so you can continue using your provider without interruption or assists you in finding a more compatible payment gateway solution.
- Monthly fee: $10–$45
- Payment gateway fee: $15/month (average)
- Virtual terminal: $15–$45/month
- Transaction fees:
- Low-risk: 2%–3.1%
- Medium-risk: 2.3%–3.4%
- High risk: 2.7%–4.3%
- Chargeback fee: $25
- Early termination fee: Waived
- Payment types: All major credit cards, debit cards, and automated clearing house (ACH) payments.
- Online payment methods: Payment gateways, virtual terminal, and online shopping cart integrations.
- In-person payments: Credit card terminals, POS systems, and mobile payments (including text-2-pay).
- Payment gateway agnostic: PaymentCloud integrates with all payment gateway platforms so merchants can continue using their provider without interruption.
- Chargeback prevention: Partnership with Chargeback Gurus to get instant dispute alerts, dispute tracking, a dispute cause analyzer, and prevention analysis.
- Fraud prevention: Industry-standard Address Verification System (AVS) technology, tokenization, 3D Secure technology to validate cardholders at the point of purchase, and temporary payment halts to pause suspicious transactions until they are verified; PaymentCloud also customizes your payment gateway’s velocity filters that regulate the number of authorizations in a given hour/minute to minimize fraud transactions.
- Level 2 and 3 processing: PaymentCloud supports B2Bs with level 2 and 3 data processing for securing large-scale transactions.
PaymentCloud works with MATCH list businesses. It also has one of the most extensive lists of approved industries out of all the high-risk merchant services providers on our list, boasts a 98% approval rating with its banks, and offers free quote comparisons.
PaymentCloud works with the following industries classified as high-risk. (Source: PaymentCloud)
Durango Merchant Services: Best for Online Sellers
Overall Score:
4.66 / 5
Pros
- Fast onboarding with high approval rates
- Free fraud reduction tools and consultation
- Multicurrency merchant account
Cons
- Limited Mountain time support hours
- Does not work with companies offering remote computer support
Durango Merchant Services is one of the oldest merchant service providers specializing in high-risk accounts. It is one of the more lenient high-risk merchant account providers, especially when it comes to helping small businesses with bad credit secure payment processing services.
Its proprietary Durango Cart shopping cart technology and Durango Pay payment gateway’s built-in load balancing feature make it a great option for online businesses. Durango Merchant Services also works with offshore and international businesses and companies on the MATCH list.
- Monthly fee: $30 (including payment gateway)
- Transaction fees:
- Ecommerce/MOTO: Interchange plus 0.25%
- Payment gateway: 10 cents per transaction
- Authorization fees: 15–25 cents
- Rolling reserve requirements: 0%–10%
- Chargeback fee: $25
- Early termination fee: $0
- Payment types: All major credit and debit cards, ACH, e-check payments, and cryptocurrency.
- Payment methods: Point of sale payments, mobile payments through the iProcess app, online payments via Durango Cart, or integrate with ecommerce or web builder platforms with Durango Pay payment gateway.
- Fraud protection: All accounts come with anti-fraud services, including Verified by Visa, Mastercard SecureCode, Fraud Scrubbing, and EMV 3d Secure 2.0.
All the merchant account providers on our list accept a wide range of companies—and Durango is no exception. The company works with membership businesses, horoscope and fortune-telling services, mail or telephone order businesses, multilevel marketers, online auctions, telemarketing or telecommunications firms, timeshare advertisers, high-ticket businesses, pawnshops, and more.
Unlike most of the other merchant account providers in our guide, Durango does not explicitly list all of the businesses it works with, but a Durango representative shared a copy of high-risk businesses that it has successfully approved for a merchant account.
Click to view Durango Merchant Services’ merchant list:
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First Card Payments: Best One-stop Solution for High-risk Merchants
Overall Score:
3.96 / 5
Pros
- Offers 25% savings on current rates
- Works with offshore merchants and specializes in B2Bs
- Business operations integrations
Cons
- Very limited client reviews
- Limited customer support hours and FAQs on its website
First Card Payments has been around for 20 years in the industry with 30+ financial institutions partnerships, boosting its ability to get approvals for its high-risk merchant services clients. It offers ACH, in-person, and online payments processing, and works with almost all types of high-risk merchants, including offshore, and even specializing in working with B2Bs.
The system also provides business operational support through partnerships with other companies such as web development and search engine optimization (SEO) services through Zulushack Digital. It also has customer management services through Nextiva, and call center services through a Panama call room company.
While its rates are not publicly available, we liked how easy it is to get a response from First Card Payments for pricing information, as with most of the providers in our list. It also offers a unique promise of reducing 25% of current merchant fees for businesses that would switch over to First Card Payments.
- Monthly fee: Custom
- Transaction fees:
- Interchange plus 0.25%–2.5% plus 10 cents to 20 cents
- Can also work with flat-rate pricing
- Offers 25% cheaper fees compared to existing rates with current processor
- Chargeback fee: $15–$35
- Early termination fee: $0
- Application and setup fee: $0
- Contract length: Month-to-month for 90% of merchants
- Payment types: Card-present, card-not-present, and ACH payments.
- Payment methods: Card terminals, POS integrations, mobile payments, payment gateways, and online shopping cart integrations.
- Offshore and B2B merchants: First Card Payments specializes in working with B2B merchants with level 2 and 3 data processing as well as companies that operate offshore.
- Chargeback prevention: Offers a chargeback mitigation program that alerts merchants as early as 78 hours before a chargeback occurs and provides expert support to work on winning any chargeback.
- Business operations partner: First Card Payments also offers in-house and integrated partners for operational support such as web development, SEO, call center, and phone services.
- Business financing: First Card Payments offers a merchant cash advance program to start-ups and small businesses looking to sign up for a merchant account.
First Card Payments work with a wide range of high risk businesses, including poor credit and high-volume merchants, B2Bs, and offshore companies. It also works with businesses in the MATCH list.
Click for the complete list of high-risk businesses supported by First Card Payments:
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Soar Payments: Best for Instant Quotes & Automated Application
Overall Score:
3.55 / 5
Pros
- Instant quotes and fast approval
- No application fees
- Integration with QuickBooks and other software
Cons
- Long initial contract term
- Steep early termination fees
Soar Payments is a high-risk merchant services provider that works with various industries and business types. It offers the most direct integrations with accounting, customer relationship management (CRM), and ecommerce platforms out of all the solutions on our list.
One of Soar Payments’ standout features is that it offers instant online quotes and a 24-hour approval process, which you cannot find in highly rated alternatives. Note, however, that there is still an underwriting process that takes up to five business days.
- Average monthly fee: $19–$45
- Application and setup fees: $0
- Transaction fee:
- From 2.49% transaction fees for mid-risk merchants
- Tiered and interchange-plus pricing
- Early termination fee: $0 for some merchant accounts, otherwise $200–$395 depending on merchant standing
- Chargeback fee: $25–$30
- Rolling reserve typically: 5%–10%
- Contract Length: 2–3 years
- Payment types: All major credit and debit cards, ACH, and e-check.
- Payment methods: POS payments, plus mobile and online payments through Authorize.Net, NMI gateway, and USAePay.
- Chargeback protection: Partnership with Chargeback.com to include alert emails, representation to fight chargebacks, fraud detection, and more.
- Approval process: Fully online application process, 24-hour turnaround time for approvals, plus additional 3–5 business days for underwriting.
- Deposit speed: Soar Payments takes 48–72 hours to process sending funds to your bank account.
Soar Payments works with over 50 high-risk business types, including those with bad credit and those involved in cannabis support, CBD products, credit repair and monitoring, fantasy sports, firearms, multilevel marketing, pawnbrokers, nutraceuticals, survivalist businesses, and travel.
Click on this list of Soar Payments’ accepted high-risk merchant types
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SMB Global: Best for Chargeback Management
Overall Score:
3.53 / 5
Pros
- Excellent chargeback support
- Supports offshore accounts
- 175+ online shopping cart integrations
Cons
- Lacks a native payment gateway
- Stricter guidelines for approving CBD businesses
- Very limited user reviews
SMB Global is a merchant service provider partner of Payline Data, a popular and reputable low-risk processor. SMB Global exclusively deals with high-risk and international businesses. It has chargeback prevention features (including an auto-response feature to fight chargebacks quickly) and two popular payment gateway options—and each integrates with more than 175 online shopping carts.
User reviews are limited, but those who rave about SMB Global claim qualifying for a month-to-month contract with zero rolling reserve requirements and unlimited processing volume. Interestingly, SMB Global and Payline Data also partner with top-ranked PaymentCloud.
No publicly disclosed pricing. Standard policy for high-risk merchant accounts is from month-to-month to up to three-year long-term contracts, plus as much as $500 in early termination fees.
- Payment types: All major credit and debit cards, ACH, and e-check processing.
- Payment methods: POS terminals, including Verifone; online and mobile payments available through Authorize.net and NMI payment gateways.
- Short application process: Sends your application out to many processing partners to find the best rates and contract terms (like most other high-risk merchant accounts).
- Offshore merchant accounts: SMB Global assists high-risk businesses in applying for offshore merchant accounts, providing for broader underwriting guidelines and higher processing volume caps.
- Chargeback prevention platform: Analytics platform to display your chargeback counts and ratios in real-time and forecast your month-end results in advance; also has a feature that responds to chargebacks automatically so that they can be fought quickly and accurately.
Like PaymentCloud, SMB Global has a long list of products, industries, and services that it works with. It is worth noting that SMB works with many types of unconventional product sales, including auto parts, weight loss programs, electronics, firearms, supplements, and collectibles.
Click to view SMB Global’s highlighted list of approved merchants:
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eMerchantBroker: Best for Online CBD
Overall Score:
3.35 / 5
Pros
- Specializes in CBD (including edibles and vape)
- Chargeback prevention system
- Zero monthly fee ecommerce integration
Cons
- Limited in-person processing tools
- Long-term contracts
- Early termination fees
eMerchantBroker (EMB) is one of the few credit card processing companies that actively advertises working with CBD and hemp vendors and medical marijuana dispensaries. It boasts a 99% payment processing approval rating for its merchant clients. Users also rave about eMerchant Broker’s onboarding experts and 24/7 customer support staff.
If you sell CBD oil, vapes, extract, or edibles and have trouble getting approved for a merchant account, eMerchantBroker is a good option. PaymentCloud also supports CBD businesses, but EMB has worked with them in detail as well.So make sure to ask industry-specific questions and compare fees before signing up with either.
- Monthly account fee: Varies
- Transaction fees: Varies
- Ecommerce plan: $0 monthly fee, 10 cents per transaction, 0.6% fee on all EMB volume, requires a $50 monthly minimum transaction volume
- Payment gateway fee: $0 with proprietary payment gateway, up to $25 with partners
- Chargeback fee: $35
- Rolling reserve: 0%–10%
- Early termination fee: $0–$595
- Contract length: 1–3 years
- Payment types: All major credit and debit cards and checks
- Online payment methods: Accept online payments through a proprietary EMB payment gateway, Authorize.net, or integrations with Square, Wix, BigCommerce, and Shopify.
- Chargeback prevention: Partnership with Verifi and Ethoca to minimize and notify merchants of chargebacks.
- CBD merchant accounts: Works with businesses selling CBD supplements and vitamins, beauty products, CBD oil, pet products, hemp oil, vaping oil and pens, CBD edibles, creams and topical treatments, pain-relief sprays, extracts, and more.
EMB works with a wide range of high-risk businesses, including electronic cigarettes, adult, tech support, credit repair, nutraceutical, collection, weight loss, and electronic businesses. According to its website, it has a 95% account approval rating, which is very high, especially for high-risk merchant services.
Click to view EMBs approved high-risk industries:
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High-risk Merchant Account 101
If you’re a new small business owner, you might be wondering whether your business falls under the high-risk category. It will also be helpful to know how to choose a high-risk merchant account provider and what the difference is between low-risk and high-risk merchants.
High-risk merchants are businesses considered by payment processors to likely be at risk of high chargebacks and fraudulent payments. These types of businesses are typically not approved for a traditional merchant account and instead require payment service providers that specialize in handling high-risk transactions. Most of our preferred small business payment processors, such as Square and PayPal, only work with low-risk businesses.
You need to apply for a high-risk merchant account if:
- Your product or service belongs in an industry known for being highly susceptible to fraud and chargebacks
- Your product or service belongs in a highly regulated industry
- You have poor credit record or low credit scores
- Your business is highly dependent on international sales
- Your business is included in the MATCH/TMF list
Examples of high-risk industries*: | Your business may be considered high risk if you have: |
|---|---|
|
|
*This is just a small sample of industries that could be considered high risk. Classification is determined differently by every bank and financial institution.
High-risk merchants do not just have limited options when it comes to finding merchant account providers; they also face more restrictions and higher fees even with a provider that supports high-risk businesses. On the other hand, low-risk businesses are usually accepted by other providers offering zero monthly fees with instant approval and without any long-term contracts.
Payment Feature | Low-risk Merchant Account | High-risk Merchant Account |
|---|---|---|
Monthly fees | From $0 | From $10 |
Transaction rates | Generally lower than high-risk | Higher due to transaction risk |
Chargeback fees | Can be waived | From $15 |
Rolling reserves | Can be $0 | Often required due to risk |
Contract length | From month-to-month | Often long term |
Merchant application | At times not required | Required |
Monthly fees
Low-risk merchants typically enjoy lower monthly fees compared to high-risk merchants. Since low-risk businesses are perceived as having a lower likelihood of chargebacks or fraud, payment providers can offer them more favorable pricing structures. High-risk merchants may be subject to higher monthly fees due to the increased risk and additional resources required to manage their accounts.
Transaction rates
High-risk merchants also often face higher transaction rates than low-risk merchants. Providers assess the risk associated with processing payments for high-risk businesses and adjust the transaction rates accordingly. Most providers do custom pricing for each merchant depending on the nature of their business.
Chargeback fees
Chargeback fees can be higher for high-risk merchants. Chargebacks occur when customers dispute a transaction and request a refund through their card issuer. High-risk businesses may experience a higher number of chargebacks, which results in additional administrative costs for the provider. To offset these costs, providers often charge higher fees for managing chargebacks for high-risk merchants.
Rolling reserves
Rolling reserves are a portion of a merchant’s processed funds that are held by the payment provider as a security measure against potential losses. High-risk merchants typically face stricter rolling reserve requirements compared to low-risk merchants. The rolling reserve amount is determined based on the perceived risk of the business and can be higher for high-risk industries.
Contract length
High-risk merchants may be required to sign longer contracts compared to low-risk merchants. This is because payment providers may require additional commitment and security measures to manage the potential risks associated with high-risk businesses.
Merchant application
High-risk merchants often undergo a more rigorous and detailed application process than low-risk merchants. Providers typically scrutinize high-risk merchant applications more thoroughly to assess the risks involved and determine if they are equipped to manage those risks effectively. This can include additional documentation, background checks, financial statements, and industry-specific requirements.
Although finding a provider that will accept your high-risk business can be challenging, you should not sign up with the first one you find. Choosing a high-risk merchant account provider requires careful consideration to ensure that your business needs are met effectively.
Here are some considerations to keep in mind:
- Fee structure: Most providers offer custom quotes for high-risk merchants depending on the size and nature of their business. Make sure to look closely at the fees before signing up to prevent any unexpected costs.
- Contract terms: Carefully review the contract terms, including contract length, termination clauses, and any hidden fees or restrictive policies.
- Customer support: High-quality customer support is crucial, especially when dealing with complex, high-risk merchant accounts. Verify the availability and responsiveness of the provider’s customer support team. Ideally, they should offer 24/7 support and have knowledgeable representatives who can assist you promptly.
- Available payment methods: Check the payment methods you will need and make sure they match what the provider offers. Consider whether they support credit card processing, alternative payment options, international transactions, or any specific payment solutions relevant to your business.
- Expertise and industry knowledge. Some providers specialize in specific industries. Ideally, look for a provider with experience working with merchants in your industry. They should have a deep understanding of the unique challenges and compliance requirements associated with your business type.
- Feedback and reputation. Look for reviews, testimonials, and feedback to gauge the provider’s reliability, customer satisfaction, and ability to deliver on their promises.
- Fraud protection and risk management. High-risk merchant accounts face higher likelihood of chargebacks or fraud. Check for tools and support that the provider offers to help mitigate and manage the risks.
Need help applying for a merchant account? Download our free step-by-step guide:
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How We Evaluated High-risk Merchant Accounts
High-risk merchant account providers partner with many different underwriting banks and will help you fill out an application to shop around for the best rates—so rates will vary. Hence, comparing providers based on fees or transparency will not provide the best recommendation.
Instead, we looked at the overall pricing structures and specific features—like load balancing, chargeback prevention, and protection tools—offered by each provider. We also prioritized processors that work to get merchants placed regardless of history or business type. Finally, we considered standard payment features, deposit times, customer support hours, and user reviews.
Based on our evaluation, PaymentCloud emerged as the best high-risk merchant account provider. It offers a lot of the much-needed high-risk merchant payment processing tools, along with plenty of hardware and solutions for online, storefront, and mobile sellers.
Click through the tabs below for our specific evaluation criteria:
30%
Pricing and Contract
20%
Payment Types
30%
High-risk Features
20%
Expert Score
30% of Overall Score
We awarded points to processors that have average contract lengths below the three-year industry standard, have minimal or negotiable rolling reserve policies, and do not charge cancellation or early termination fees and any application or setup fees.
20% of Overall Score
Processors earned points for offering point-of-sale payment options, ecommerce or shopping cart integrations, and mobile payment solutions. Though nearly every processor provides payment gateway solutions, we awarded bonus points for those that charge minimal or no fees.
30% of Overall Score
We prioritized 24/7 customer support and processors that offer dedicated account managers, include free chargeback monitoring and protection tools, and provide fast deposits. We also considered what industries and business types each processor works with, awarding points to those that are the most flexible.
20% of Overall Score
Processors earned points for positive user reviews and overall transparent pricing practices. Our experts also considered the company’s overall reputation, reliability, and their personal experience interacting with company representatives.
*Percentages of overall score
High-risk Merchant Account Frequently Asked Questions (FAQs)
A high-risk merchant is any business that may be considered high risk to banks or other financial institutions. In general, any business that processes a significantly high volume of non-retail, card-not-present transactions or with a chargeback ratio of over 1% is considered high risk. Also, if you are operating in an industry that is susceptible to financial failure or otherwise potentially questionable (such as CBD vendors or offshore businesses), you can be classified as high risk.
Financial institutions are always extra careful when taking on a higher level of risk, and will, therefore, be cautious about providing your business with a merchant account if you fall under this category.
Because of its very nature, high-risk merchant accounts are significantly different from traditional or low-risk merchant accounts. While low-risk merchant accounts usually have fewer requirements and generally lower fees, high-risk merchant accounts are usually imposed with much higher fees and stricter processing volume restrictions. So, it’s important to apply for traditional merchant services before opting for a high-risk provider. PaymentCloud, our best overall pick for this article, also serves low- and medium-risk businesses.
An aggregate processor or payment service provider like PayPal and Square pools certain business types into a single merchant account. Any fraudulent transaction by one of these businesses will affect the rest that use the same merchant ID. On the other hand, a dedicated merchant account for your high-risk business will provide better fraud protection for your transactions and faster transfer of your funds to your bank account.
Aside from the higher transaction costs, accepting manual-entry payments brings higher risk of fraud and chargeback claims. High-risk merchants need to maintain a low chargeback ratio to avoid getting their merchant account canceled by the bank or financial institution.
Increasing security in processing online payments helps high-risk merchants minimize chargebacks and improve chargeback ratio. Make sure you have the necessary fraud and chargeback protection tools such as Address Verification Service (AVS), Card security code (CVV2, CVC, etc.), and 3D Secure (Visa Secure, Mastercard SecureCode, etc.). You should also consider dispute resolution management platforms that you can get with most advanced credit card processing companies in the market.
These are but a few measures outlined for PCI compliance. Businesses that accept credit card payments should meet the standards set by the Payment Card Industry Data Security Standard (PCI DSS) to avoid fines and liabilities in the case of a data breach.
Bottom Line
If your business does not fall under the credit policies of a tier-one traditional bank, your application for a traditional merchant account may be rejected. In this case, you will need to find a merchant account provider that specializes in working with high-risk customers. However, choosing a credit card processor as a high-risk business can be tricky without knowing what to look for.
Overall, you want a provider that’s easy to work with and that you can trust to charge fair rates. PaymentCloud, our choice for the best high-risk merchant account services provider, is a reliable credit card processor that specializes in high-risk merchant accounts and works with many back-end processors to service a wide variety of online, ecommerce, and retail businesses. It also offers fast approvals, competitive pricing, and next-day funding. Get a free quote today.
