Getting a High-Risk Merchant Account? Here’s What You Need To Know!

Getting a High-Risk Merchant Account? Here’s What You Need To Know!

The internet has completely transformed how we pay. We no more rely on hard cash or paper checks, the modern buyer prefers paying digitally. It simply means that businesses have to catch up with the speed at which the payment systems are getting digitized. 

At this point, it may sound like every business is equally eligible for accepting digital payments but that’s not the case. There are a lot of businesses that are marked as “High Risk” by digital payment facilitators. These businesses often need a few extra steps before they start transacting online.

If you’re one such High-risk business that needs a merchant account (an account used for collecting digital payments), we at Payor have a list of tips, insights, and recommendations. Our suggestions will help you navigate the account creation process easier, and enjoy the benefits of a payment gateway.

What is a High-risk Merchant Account?

A merchant account is a payment processing account that allows businesses to accept payments in a B2B or B2C setup. This account stores all the transaction information carried about your business. In most parts of the world, you need a merchant account for accepting payments whether online or offline.

The account is facilitated by a bank, therefore, basic qualification criteria are followed before opening a merchant account.

Merchant accounts can be broadly classified into 3 types;

  • Low Risk
  • Medium Risk 
  • High Risk

Examples of each type of accounts

Low Risk

Open a Low-Risk Merchant Account with Payor

  • Online apparel
  • Office supplies
  • Health & beauty products
  • Books
  • CDs
  • DVDs
  • Pet supplies
  • Household goods
  • Parking garages
  • Moving companies

Medium Risk 

Open a Medium-Risk Merchant Account with Payor

  • Online retail
  • Online games
  • Non-profit and charity
  • Online magazines and digital content (incl. subscriptions)
  • IT (storage, clouds, software)

High Risk 

Open a High-Risk Merchant Account with Payor

  • Large Average Ticket Size ($2500+)
  • Pharmacies (Retail)
  • Auction Websites
  • Nutraceuticals
  • Tobacco/ eCig/ Vape
  • Liquor/Hard Alcohol
  • Firearms
  • Adult Entertainment

How is Risk level identified in High-Risk Merchant Accounts?

Banks have set a few baseline criteria that enable them to classify certain businesses as High-risk. A list of these criteria is given below. If your business satisfied one or many of these criteria, you may need a high-risk merchant account.

  • The company is a startup business. 
  • The company belongs to a risky industry (wherein the chargeback possibilities are quite high). 
  • The company is facing financial difficulties which can be verified by looking at financial statements.
  • The company is facing a bad credit history.
  • The company’s official information has inaccuracies in it. This could be about the activities of the business or its legal address.
  • The company’s monetary transactions do not comply with the declared business activity.

At this point, you may think that why is such rigorous criteria is followed for the opening of High-Risk merchant accounts. The answer lies in the fact that payment systems are brutally abused online. The payment provider opens a payment gateway that can be used for illegal activities such as the sale of banned items, money laundering, etc.

Therefore, to keep their payment systems compliant, banks follow strict eligibility criteria. It’s not that High-risk businesses are discouraged from opening a merchant account but they often come under higher scrutiny before their account is approved.

Pros And Cons Of A High-risk Merchant Account

Each High-Risk merchant account is essentially a merchant account with a host of benefits and a few considerations. If you’re planning on opening a merchant account for your business, you must know about the following facts.


  • Your business can conduct sales online using a website or mobile app. 
  • You can offer lesser transaction rates than a usual bank transfer. 
  • You can sell products that are deemed as High Risk online via a payment gateway. 
  • You can accept payments in multiple methods such as credit cards, debit cards, and other popular products. 
  • Merchant accounts offer a faster settlement time, allowing you to get your funds quickly.


  • High-risk merchant accounts are hard to activate due to the stipulations associated with them. 
  • If your account receives too many chargebacks, your account may get shut down. 
  • There may be daily or monthly transaction limits on your account depending upon your payment provider.

What documents are required to open a merchant account?

Although each merchant account provider and banking partner has a separate list of required documents, we have a generic list of documents for opening a merchant account. You can contact the Payor team to know about Payor’s list of documents for opening a high-risk merchant account. 

  • Constituent documents of the company
  • Company’s management details such as the management team, shareholders, secretary, etc. 
  • The details about the status of the company. 
  • Company information certificate
  • Company’s refund policy
  • Photocopies of extracts of the enterprise 
  • Photocopy of identity card (notarized)
  • Proof of residence
  • Bank recommendation


Opening a merchant account for your High-risk business can be a little tormenting. There are a lot of checks placed by payment providers and banks to ensure buyer safety. PayorOne can help your open a new High-risk merchant account without going through a long list of stipulations. You can explore payor’s solutions for high-risk businesses and get started with one of our payment products at the earliest.

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