While there are some limitations currently, practiceQ is working on ways that we can support high-risk businesses. Please email us at hello@intakeq.com with any questions on if we support your business type.  

What is a High-Risk Merchant Account?

Businesses that are characterized as “high-risk” will need a high-risk merchant account to accept debit and credit card payments. A high-risk business is one that has a greater likelihood of chargebacks or fraud (and certain other characteristics as well).

There is no central authority or framework in the payments industry that determines the risk factors associated with a business. Instead, every bank and every payment processor has its own set of standards.

What Factors Determine if a Merchant Is High-Risk?

Businesses from certain industries that innately carry higher risks may be automatically flagged as high-risk businesses. Please review our list of high-risk industries to the right.

Other factors that determine risk:

• Some processors could label you as “high-risk” if you are a new entrant and have never processed payments before.
• Poor credit records or low credit scores for defaulting on loans, etc., are other significant factors. If a processor has previously put you on the MATCH list, that could increase your risk perception as well.
• The same goes for businesses that have controversial product lines or operate on a slippery legal slope.
• Businesses that are overly dependent on international sales may also have high-risk scores. This is because of the relatively unpredictable economic dynamics abroad.
• Industries that are highly regulated by legislation or governments are also labeled “high-risk.”
  
  

What to Do If You’re a High-risk Business and Need a Payment Processor

If you are a high-risk merchant, what’s the best way to go about your search for a payment processor? Here are a few simple things you should keep in mind:

• Maintain healthy cash levels. Most processors would like to see a healthy cash level in your business bank account. This conveys a picture of financial stability thus lowering the risk perception.
• Try to reduce chargebacks. There could be a number of factors behind the soaring numbers of chargebacks in your business. In industries such as eCommerce, this could stem from a mismatch between a product description and the actual product. Or, it could also be due to prolonged delivery times. Whatever the reasons may be, you can always analyze them and try to reduce your chargebacks.
• Be transparent. Disclose all materials and relevant information during the application process. Not doing so could be detrimental to your cause and will only affect your credibility. Unlike low-risk merchants, processors may ask you for very detailed information about your business and finances. Be open, honest, and transparent.
• Keep your documents ready. This could mean having six months of bank statements and a few years of tax returns. That said, each processor has its own set of requirements so make sure to check them.
• Follow the guidelines of your payment processor. When you apply for a high-risk credit card processing solution, besides your business needs, the risk-taking ability of the processor also matters. So, be flexible and see if there are things you can do to reduce your risk by discussing with them and following their recommendations.

If you have any questions about if you are high risk, email us at hello@intakeq.com and we'll be glad to assist.

• Home-based massage businesses without valid license

• Marijuana dispensaries and related products or services

  • (Related Product or service = Any business that works with or accepts money from a dispensary, grower, distributor.)"

• Medical Discount Membership Plans

• International Merchants, including Puerto Rico, Guam, or USVI

• Nutraceuticals

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