High Risk Processing Industry

Merchants in the industries that payment processors and banks consider high risk often struggle to find reliable payment processing at a reasonable cost. This has given rise to an entire industry based on meeting the needs of high-risk merchants, not just with basic payment processing but also with enhanced features custom-tailored for their unique challenges.

The high-risk processing industry is complex, and not all merchants who fall under the label know that they do until they suddenly have their account flagged or frozen by their payment processor.

In this guide, we’ll go over:

What industries are considered high-risk
What that means for their merchant accounts
How high-risk processors can help

Let’s explore each to better understand what to do if you find yourself labeled as a high-risk merchant.

What Are High-Risk Industries?

High-risk industries are those that carry higher chargeback/fraud rates, payment volumes, and/or “headline risk” than other industries. As a result of these factors, offering payment processing to these industries presents greater financial and reputational risk.

High-Risk Industry Criteria

High Chargeback/Fraud Rates	These increase the financial risk for payment processors due to expensive payment reversals and dispute processes.
High Purchase Volumes	Businesses with low rates of chargeback and fraud can still struggle with a high absolute volume of both.
Headline Risk	The risk of a product being used in a way that would harm the reputation of the merchant and their processor. This is a factor for merchants like gun dealers or CBD/cannabis merchants.

High-risk industries include all of the following (and more):

Adult Entertainment
Firearm Dealers
Gambling
Alcohol
CBD
Cannabis
Pharmaceuticals
Cryptocurrency
Vaping/E-cigarettes
Subscription Services
Nutraceuticals/Supplements
Telemedicine

Since there are too many industries that could potentially be considered high-risk to list here, check out our comprehensive list of supported high-risk industries to see if your industry is there.

How Does High Risk Affect Merchant Accounts?

High-risk merchants who work with generalist payment processors risk having their merchant accounts flagged once their chargeback or fraud risk exceeds their processor’s limit or their sales volume gets too high. This can lead to held or frozen funds, costly business downtime, and the need to find a new processor. Even processors that claim to support select high-risk industries like CBD may end up flagging accounts if certain metrics fall out of parameters, and not many of them offer features to help keep them within.

How Can the High-Risk Processing Industry Help?

Specialist high-risk payment processors help these merchants by not only offering them processing services without the fear of eventually losing them, but also by providing value-added features like chargeback and fraud protection, subscription billing, and dedicated account managers to ensure that any issues are resolved as quickly as possible.

High-Risk Processing Features

Subscription Billing	More advanced payment providers support recurring billing for subscriptions, memberships, and/or automatic reorders.
PCI-DSS Compliance	PCI-DSS is a higher-level industry standard for data security that not all payment processors provide.
Address Verification Service	To protect against fraud, better payment processors will verify billing addresses for every payment.
API Integration	To make payment more seamless and attractive on an app or website, premium processors offer API integration.
Two-Factor Authentication	Specialist processors offer two-factor authentication to prevent fraud and make it easier to dispute chargebacks.
Fraud Detection and Prevention	Processors specializing in high-risk processing have more advanced AI/machine learning fraud detection and prevention.
Chargeback Interception/Rapid Dispute Resolution (RDR)	Chargeback interception and RDR allow merchants to resolve chargebacks before they’re ever recorded, and this is a highly specialized and valuable feature.
Dedicated Account Managers	Specialist processors go above and beyond regular customer service, assigning dedicated AMs to all merchant accounts.

These features set apart specialist firms in the high-risk processing industry as more than just payment processors that will tolerate high-risk businesses in exchange for higher fees. Instead, they seek to work in partnership with their clients to alleviate the higher costs and liabilities involved in operating as a high-risk merchant.

Get the Best High-Risk Processing with Seamless Chex

Seamless Chex is an experienced high-risk payment processor that specializes in purpose-driven features like chargeback management tools and fraud protection. Our 99.1% approval rate and comprehensive high-risk industry list mean businesses of nearly all industries and sizes can be confident in our support. We work to truly understand your business from the outset, with upfront underwriting and individualized payment schedules designed to work for each client’s market and business cycle.

‍To learn more about the high-risk processing industry, contact us today.

High-Risk Processing Industry