If you run a business in industries like entertainment, travel, online gaming, or nutraceuticals, you’ve probably heard the term high risk merchant account. While these accounts are essential for processing credit card payments, getting approved can feel overwhelming. But don’t worry — this guide will walk you through everything you need to know about how to open a high risk merchant account and set your business up for success.
What is a High Risk Merchant Account?
A high risk merchant account is a type of payment processing account designed for businesses considered riskier by banks and payment processors. These risks may include:
- High chargeback rates
- Large ticket sales or volumes
- Operating in regulated or controversial industries
- History of credit problems or past fraud
Because of the increased risk, high risk merchants face stricter underwriting, higher processing fees, and additional requirements compared to standard (low-risk) merchants.
Why Do You Need a High Risk Merchant Account?
Without a high risk merchant account, many banks or payment processors will refuse to work with you, leaving you unable to accept credit card payments, which can kill your sales and credibility.
A proper high risk account allows you to:
✅ Accept credit and debit cards securely
✅ Reduce the risk of account termination
✅ Gain access to fraud prevention tools
✅ Build trust with customers
Step-by-Step: How to Open a High Risk Merchant Account
1. Understand Your Business Risk Profile
Before applying, assess why your business is classified as high risk. Is it because of your industry, the size of your transactions, international sales, or a history of chargebacks?
Understanding this helps you prepare your application and address concerns upfront.
2. Research High Risk Merchant Account Providers
Not all payment processors handle high risk accounts — you’ll need to work with a specialized high risk payment processor or merchant account provider.
Look for providers with:
- Experience in your industry
- Transparent pricing and fees
- Solid fraud prevention tools
- Good customer support and reputation
Examples include PaymentCloud, Durango Merchant Services, and Soar Payments.
3. Prepare Your Documents
High risk providers will scrutinize your application. Be ready to submit:
- Valid government ID (passport, driver’s license)
- Voided business check or bank letter
- Previous processing statements (3–6 months)
- Business license or incorporation documents
- EIN (Employer Identification Number) or tax ID
- Financial statements, if available
- Website URL with privacy policy, terms, and refund policy
Pro tip: Make sure your website is complete and professional before applying. Many applications are rejected simply because the site lacks key details like clear refund policies.
4. Apply and Be Transparent
When you apply, be honest and upfront about your business operations, products, and chargeback history. Trying to hide past issues can lead to automatic rejection or future account termination.
Explain:
- What you sell
- Who your customers are
- Your average monthly sales volume
- Average transaction size
- Your plan to manage chargebacks and fraud
5. Work Through Underwriting
Once you apply, your provider will conduct underwriting to assess the risk you present. They may request:
- Additional documents
- Clarification on business practices
- Proof of inventory or fulfillment processes
Be responsive and provide any requested details quickly — delays can slow your approval.
6. Review Fees and Contract Terms Carefully
High risk accounts often come with higher fees, such as:
- Discount rates (3%–6% or more)
- Rolling reserves (10%–15% of sales held for 3–6 months)
- Chargeback fees ($20–$50 per incident)
- Monthly account fees
Make sure you understand your contract and ask questions before signing. Compare offers from multiple providers to get the best terms.
7. Get Approved and Set Up Payment Gateway
Once approved, you’ll receive your merchant account details and set up your payment gateway to start accepting online payments. Most providers offer integration tools or plugins for e-commerce platforms like Shopify, WooCommerce, or Magento.
8. Monitor Chargebacks and Stay Compliant
After approval, your work isn’t done. To keep your account in good standing:
- Monitor and reduce chargebacks
- Provide excellent customer service
- Follow industry compliance rules (like PCI DSS)
- Update your provider on any major business changes
Many high risk merchants lose their accounts due to preventable compliance issues — stay vigilant.
Tips for Getting Approved Faster
Here are a few bonus tips to improve your chances of approval:
✅ Keep your chargeback rate below 1%
✅ Ensure your website has SSL security
✅ Display clear shipping and return policies
✅ Maintain a healthy business bank account
✅ Be responsive during the application process
Final Thoughts
Opening a high risk merchant account may seem challenging, but with the right preparation and provider, you can unlock the ability to process payments safely and scale your business. Remember: transparency, organization, and compliance are key to approval and long-term success.
By following this step-by-step guide, you’ll be in a strong position to get approved and start accepting payments — even in a high risk industry. If you need more information, you can contact Trinity Consultings. Our team will guide you step by step.