What are High-Risk Businesses?

What are High-Risk Businesses?

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Establishing any type of business is a risky adventure. All businesses encounter varying degrees of risk that can create obstacles on their path to growth. While risk is ever-present in the business world, some industries can make it more difficult to operate a successful enterprise. Many factors, including the industry you operate in, can determine whether your business is labeled as high or low-risk.

What are high-risk businesses? High-risk businesses are companies that banks and payment processors consider to be a financial liability to them. If your business is labeled as high-risk, you will have a difficult working relationship with most financial institutions.

Why are Some Businesses Considered High-Risk?

Banks, payment processors, and other financial institutions analyze many criteria to categorize businesses as high or low-risk. In general, your company’s viability and the industry you operate in are what distinguish high-risk businesses from their low-risk counterparts.

If you operate in an under-regulated industry, sell products that pose potential health and safety issues, experience higher than average rates of fraud and chargebacks, or have poor financial standing, your business could be considered high-risk and shunned by many banks and payment processors.

The list of high-risk industries and businesses include:

  • Vape and e-cigarettes
  • Adult entertainment
  • Nutraceutical and dietary supplements
  • Transportation and moving services
  • Travel and booking agencies
  • Online gambling and gaming
  • Fantasy sports
  • Credit repair
  • Debt collection
  • Dating and matchmaking websites
  • Cannabis products
  • Firearm and ammunition
  • Cryptocurrency and forex trading

The difficulties of acquiring a merchant account to process credit card payments are what define high-risk businesses. Most banks and payment companies will refuse to provide high-risk businesses with a merchant account and credit card processing services to minimize financial loss.

Payment Solutions for High-Risk Businesses

If banks conclude that your business is among the list of high-risk industries, you will find it very difficult to acquire a merchant account for processing payments. Without a merchant account, you can’t process electronic payments from customers. In a digital age where eCommerce is projected to take over traditional retail, you can’t run a successful business without the capability of processing electronic payments.

Ecommerce and selling goods online

To process electronic payments for your business, you will need to work with a high-risk payment processor. What are high-risk business payment processors? High-risk payment processors allow businesses that operate on the riskier side of the spectrum to accept Automated Clearing House (ACH) payments, credit cards, and other forms of electronic payments from customers. These companies provide specialized solutions for processing high-risk eCheck and credit card payments to help your business grow.

Sign Up for High-Risk Payment Processing

If banks and traditional payment processors refuse to work with your high-risk business, we can help. SeamlessChex can help your business process high-risk eCheck and credit card payments to increase sales and maximize profits. Contact us now to learn more about our SeamlessMerchant solution for high-risk businesses.

Right payment solution for you infographic

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