Operating a business in an emerging industry is already hard enough. But when payment processors won’t touch your company?
It can get pretty damn difficult.
Your competitors that get to sleep at night knowing their business model isn’t going to get them blacklisted by any traditional bank? Yeah. They’re not even on your level.
The reason high-risk payment processing exists is because we understand your situation and we’ve made it our business to make it possible for those who can’t accept payments to… well… accept payments.
Without a doubt, this is the key to your revenue growth.
What You’re Going to Discover:
- What Is High-Risk Payment Processing?
- Why Some Industries Are Labelled High-Risk
- The 3 Best High-Risk Merchant Account Providers
- How to Choose the Right Processor for Your Business
What Is High-Risk Payment Processing?
There are terms and definitions of what high-risk payment processing actually is. And while they help give us a good working definition… we’ve found the best way to put it is to just ask 2Accept as they’ve been in the business for decades.
Check it out.
High-risk payment processing is a vital service for businesses deemed too risky by traditional banks and payment processors.
These are the processors that understand the unique challenges and risks associated with certain industries or business models. They have the systems in place to handle higher chargeback rates, increased fraud risks, and complex regulatory requirements.
It’s not a surprise. Chargebacks cost merchants a whopping $117.47 billion in 2023. For those in high-risk business, this is a big deal.
Partnering with a high risk merchant account provider is essential for any business that falls into the challenging categories.
Specialised high-risk payment processors have the expertise and tools necessary to serve these industries.
Pretty important, right?
Why Some Industries Are Labelled High-Risk
Banks and payment processors tend to use the word high-risk as a blanket statement across so many industries.
The reasoning? As always, it has to do with their bottom line. For this reason, these groups of industries are marked as high-risk.
But what’s a business owner to do?
Chargeback rates are the number 1 reason banks and payment processors will refuse to work with certain industries.
The reality is that some business models just have higher chargeback percentages than others. Subscription services, digital goods, and travel companies are just a few examples.
The complexity of government regulations and rules on specific industries is another large influence in what companies fall under the umbrella of high-risk industries.
Fraud exposure is the third and final reason for industries to fall under the high-risk category.
As mentioned in the previous section, the number of card-not-present (CNP) transactions is continuing to grow across the board.
Payment solutions for small businesses are booming with new payments solutions providers launching every month.
The issue is that this means these industries are targets for fraud.
The most commonly classified as high-risk industries are:
- Online gaming/gambling
- CBD and cannabis products
- Subscription-based business models
- Adult entertainment
- Cryptocurrency exchanges
- Travel and hospitality
- Nutraceuticals and supplements
The risks are real and so are the statistics that back them up. 71% of businesses surveyed experienced payment fraud in 2023. As you can imagine, that number is even higher for high-risk industries.
The 3 Best High-Risk Merchant Account Providers
We’ve helped thousands of businesses, large and small, find the perfect solution for their business.
With that said, some companies specialise in more specific high-risk industries while others can help across the board.
Below are our top three providers based on quality, reputation, and depth of industry experience.
1. 2Accept
Our company, 2Accept, has taken the number one spot for merchant account providers for high-risk industries.
We’re the only one on this list to specialise in providing tailored solutions for businesses that have been blacklisted or rejected by other banks and payment processors.
Why is this?
We know high-risk payment processing inside and out. It’s what we do best. That’s why we have some of the highest approval rates in the industry and can offer some of the best support options to our clients.
Key offerings include:
- Quick approval turnaround times
- Competitive rates for processing
- Multi-currency processing
- Fraud prevention software
- Chargeback management
We’re here for businesses in the most challenging of industries. Our solution for high risk merchant accounts is specifically designed for any company that gets blacklisted or rejected by traditional processors.
2. PayKickstart
PayKickstart is another solid option for subscription-based and digital product businesses. They integrate with most e-commerce platforms well and offer good fraud protection.
Best industries to match with PayKickstart include:
- SaaS companies
- Online course platforms
- Membership sites
Their industry coverage is not as strong as a dedicated high-risk merchant account provider. So if you’re outside of a subscription model, they may not be a good fit.
3. Durango Merchant Services
Durango is one of the more experienced high-risk merchant account providers out there. They accept a wide variety of industries and offer both domestic and international processing.
Their strengths lie in experience and knowledge within the space. However, one of their biggest downsides is their higher processing fees. For newer businesses, this can be even higher without prior processing history.
How to Choose the Right Processor for Your Business
Choosing the right high-risk payment processor for your business isn’t something you can just randomly choose out of a hat.
The wrong solution will cost you time, money, and in some cases, your entire business.
Approval Rates is the most important thing to look at. A lot of providers offer services for high-risk business but the approval rate in some industries is just a fraction of 1%.
This is why you need to work with providers that have specific industry expertise.
Knowing their fee structure is a no-brainer. If you can’t afford their processing fees, you’re in the wrong place. High-risk payment processing is more expensive than regular merchant accounts for a reason. Hiding extra fees and costs is not.
Chargeback policies can break a business if the payment processor you choose doesn’t have your back. Look for clear policies and helpful tools in prevention.
Customer support is another area where high-risk payment processing is just starting to provide better services. Business issues can happen any time. So processors that offer 24/7 customer support and dedicated account managers have a huge advantage.
Processing potential for growth is the final key to choosing. A processor that can’t support international sales, multi-currency processing, and high volumes simply won’t work for a business looking to grow.
The Real Cost of Getting This Wrong
Business owners that try to do anything other than getting high-risk payment processing right are putting their entire business in jeopardy.
We’ve been in this space long enough to see it all. And the failed attempts at cutting corners end up backfiring big time.
Frozen accounts, held funds, and sudden account terminations are all real consequences of “trying to work around the system.”
High-risk businesses need payment processing solutions that are built to handle their reality.
The businesses of today’s emerging industries need partners to understand the specific challenges they face. There needs to be systems in place that are robust enough to do the job.
Bringing It All Together
High-risk payment processing is so much more than a solution for companies that have problems accepting credit cards.
Accepting payment is an extension of your company and the better you can work together, the easier it becomes to run the business.
The right processor offers:
- Reliable payment acceptance
- Fraud protection and prevention tools
- Chargeback management support
- Regulatory compliance assistance
- Room for growth and expansion
Running a business in an emerging industry category? Accepting payments and growing revenue requires you to partner with a high-risk payment processor like 2Accept.
If your chosen processor doesn’t know the business and the challenges first-hand, they’re not going to be able to help you.
Find a processor that specialises in high-risk payment processing and the difference it makes to operations will amaze you.
The payment landscape for small business changes every year. Emerging industries need to partner with solutions that are evolving right alongside them.
Choose wisely, and high-risk payment processing will become a competitive advantage and not a constant headache.