High Risk Payment Processing

May 9, 2023

High Risk Payment Processing

The world of E-Commerce is diverse, and because of this certain Merchants are classed as “High Risk.” In order to process payments for these Merchants, a Payment Provider must ensure they know what comes with High Risk transactions.

What Makes a Merchant High Risk?

A Merchant may be classed as High Risk for a number of reasons. They may process high value transactions internationally or have a high volume of chargebacks. Merchants with a poor credit rating may also be classed as High Risk – it is important to note that having a lack of credit history may also have an impact.

Popular industries that are also more likely to have High Risk Merchants are:

  • Auction Houses
  • Brokers
  • Vape Shops, Tobacco Products, and Alcohol
  • Nightclubs
  • Payday Loan Companies
  • Electronics and Software Providers
  • Car Dealerships and Companies That Sell Car Parts
  • Events and Ticketing Companies 
  • Holiday Providers
  • E-Books
  • Music Downloads
  • Consultancy Services

How Does Being High Risk Impact a Merchant?

Due to the perception of being “Higher Risk,” Merchants may be charged higher fees per transaction, and have an increased cost when initially setting up their Merchant Account. A Merchant may also have to keep a larger sum of money in their Merchant Account in order to ensure there are sufficient funds available to cover risk factors.

Merchants may also have to undergo additional checks before they can accept payments. As well as this, the time to settlement can be longer than with Low Risk Merchants. This means that Merchants may be waiting longer in order to receive their payment funds.

To explore High Risk Accounts, to learn how Cardstream can help your offerings, and to view our different Payment Gateway Solutions, please get in contact with us.

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