Need A High-Risk Merchant Account? Here Are The 6 Best High-Risk Payment Processors To Work With
When looking for a high-risk payment processors, you can expect different pricing and contract terms, but our recommended providers are fair, honest, and transparent.
Frank KehlFrank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.
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High-risk merchant accounts are designed to serve businesses that are unable to secure a standard, low-risk credit card processing account. Although they may be costlier, they allow companies to accept both credit and debit cards, avoiding a cash-only operation.
This guide delves into the subject of high-risk merchant accounts and provides tips for selecting the best one for your business. We also highlight six of the top high-risk merchant account providers in the market today.
A high-risk merchant account is simply a merchant account for businesses classified as being in a high-risk category. While each provider has its own criteria for determining that a business is high-risk, an elevated risk of chargebacks or fraud is usually the most common factor.
Why High-Risk Merchant Services Are Different Than Traditional Merchant Accounts
Naturally, having your businesses labeled “high-risk” is frustrating. While certain business types (adult entertainment, gambling, bankruptcy law firms, etc.) nearly always get the designation, having poor personal credit or high average ticket sales can do it as well. See our article on running a high-risk business for a full list of the business types typically considered high-risk, along with other factors that might get your business that designation.
A high-risk merchant account has the same features and functionality as a traditional, low-risk merchant account. The primary differences include the following:
High-risk merchant accounts usually require a much more extensive underwriting process before the account can be approved and you can begin accepting credit/debit card payments
Additional payment security and fraud protection features
Fewer restrictions on international transactions
High-risk processors are, by necessity, experts in risk mitigation. While this comes at a cost, your businesses will nonetheless enjoy these benefits with a quality, high-risk provider.
How To Choose A Reputable High-Risk Payment Processor
If you’ve been identified as a high-risk merchant, or if you suspect you might be one, following these tips should help you find a merchant account that accepts your business and meets your needs:
Check The Processor’s Accepted Business Types: Even high-risk specialists usually don’t take all types of high-risk businesses. Check your provider’s website or contact its sales department to confirm that it can accept your particular business type.
Look For A Processor That Offers Load Balancing: With load balancing, you can spread your transactions across multiple merchant accounts, which are integrated into a single payment gateway. This way, if one of the accounts drops you, you’ll still have the others to rely on. You’ll also be able to process more every month with multiple accounts.
Read Your Contract Carefully: As most high-risk merchant account providers work with multiple processors, they usually don’t list their rates and fees online, as these can vary depending on the bank or processor that underwrites your account. Pay close attention to the rates you’ll be charged, and make sure you understand any extra fees.
Get Quotes From Multiple Providers: Due to the variability in pricing among providers, we recommend that you obtain quotes from at least three providers before choosing which one to do business with.
The 6 Best High-Risk Merchant Account Providers
The best high-risk merchant account providers offer honest sales practices, a transparent onboarding process, personalized customer service, fair contract terms, and reasonable rates and fees. With these criteria in mind, let’s look at our top six high-risk merchant account providers, including PaymentCloud, National Processing, Durango Merchant Services, and more.
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Pros
Excellent customer support
No account setup fee
Free credit card terminal
Few public complaints
Cons
No publicly disclosed pricing
PaymentCloud Features
PaymentCloud serves both low-risk and high-risk businesses but specializes in getting merchant accounts approved for a wide variety of high-risk industries. The company offers the following primary features:
“Free” credit card terminal available with each account
Interchange + 0.05%-0.30% + $0.08-$0.10 per transaction (low-risk accounts)
Processing rates vary by the acquiring bank/back-end processor (high-risk accounts)
$15/month account fee (low-risk accounts)
Account fees vary by the acquiring bank/back-end processor (high-risk accounts)
Where PaymentCloud Really Shines
PaymentCloud specializes in placing high-risk businesses, relying on a network of third-party processors and acquiring banks to get you approved for an account. You’ll need to obtain a pricing quote from the company to find out what it can offer you, but merchants’ feedback indicates that its fees and rates are reasonable. Best of all, PaymentCloud does the extra work required to accept a high-risk account without charging you any application or account setup fees.
For retail merchants, the company now provides a “free” EMV-compliant credit card terminal with each account — it’s free so long as you return it if you close your account or switch providers. PaymentCloud also offers eCommerce merchants access to either Authorize.Net or one of several alternative third-party payment gateways. A free virtual terminal is also available with each account. While its lineup of products and services isn’t quite as robust as some other providers, it offers all the essentials you’ll need for a small or medium-sized business.
PaymentCloud enjoys a great online reputation, with our readers and merchants on other sites giving the company a positive endorsement. Low-risk providers such as Dharma Merchant Services and Stripe Payments routinely refer high-risk applicants to PaymentCloud.
$39.95/month for the cash discounting program (optional)
$15.00/month + $0.48/transaction for ACH and echeck processing (optional)
Where National Processing Really Shines
Although it uses Fiserv (formerly First Data) as its back-end processor for low-risk accounts, National Processing also works with other banks to offer high-risk merchant accounts in certain select industries.
High-risk categories served include dropshipping, firearms and ammunition, credit repair and debt consolidation services, nonprofits, subscription services, high-volume sales, tobacco/vape sales, and bad credit merchants. High-risk merchants will have access to most of the same features National Processing offers to lower-risk merchants, including terminals, mobile payment processing, eCommerce support, and chargeback prevention tools.
Note, however, that the transaction pricing disclosed on the company’s site applies to low-risk accounts only. High-risk merchants should expect higher fees. However, you won’t have to pay an account setup fee. Interchange-plus pricing (at higher rates) and month-to-month billing are also available. You’ll also be subject to an early termination fee if you accept a free terminal and then close your account to switch to a competitor.
Offers offshore accounts for international merchants
Fair pricing & contract terms
Offers an EMV-compliant mobile card reader
Dedicated account manager for customer service
Cons
Early termination fee in some cases
Durango Merchant Services Features
One of our favorite high-risk providers, Durango Merchant Services offers a full range of products and services for eCommerce and retail businesses. Primary features include the following:
High-risk merchant accounts
International merchant accounts available
Cryptocurrency merchant accounts are available
Durango Pay payment gateway and virtual terminal
Mobile processing through the iProcess app and card reader
iSPY fraud protection service
eCheck processing available
A variety of universal credit card terminals are available
Dedicated account manager for customer support
Durango Merchant Services Pricing
Highly variable processing rates
Highly variable account fees
A long-term contract and an early termination fee may apply
Where Durango Merchant Services Really Shines
Durango Merchant Services is one of the oldest and best high-risk merchant services providers. The company has an excellent reputation for honesty, fair rates, and great customer service. Like almost all high-risk providers, Durango uses a quote-based pricing system and doesn’t disclose fees or rates on its website.
In addition to working with US-based processors and banks, the company can also set you up with an offshore merchant account if you need one.
Durango supports eCommerce merchants through its proprietary Durango Pay payment gateway. This gateway includes all the standard payment and security features you’ll need to run a web-based business, including an Authorize.Net emulator mode. Support for retail merchants consists of a variety of countertop terminals that accept both EMV and NFC-based payment methods, as well as the iProcess mobile payments system.
All merchants will be assigned a dedicated account manager for all customer service-related issues. While this can sometimes be problematic outside of regular business hours and when your account manager isn’t available, it usually provides a much higher level of service than you’ll get from a random customer service representative. Personalized customer service and the ability to work with various domestic and offshore payment processors set Durango Merchant Services ahead of most of its competitors.
Host Merchant Services primarily serves low-risk businesses but also accepts merchants in many high-risk industries through a partnership with Electronic Merchant Systems (EMS). Available features include the following:
High-risk merchant accounts
Full line of countertop and mobile credit card terminals
Free terminal available to merchants processing over $20,000/month
Vital and SwipeSimple mobile processing solutions
Choice of Vital or Bonsai (proprietary) POS system
Choice of Authorize.Net or Transaction Express (proprietary) payment gateway
Virtual terminal included
Web hosting service included with each account
Cash discounting program available
Host Merchant Services Pricing
No application or setup fees
Variable account fees per customized quote
Variable processing rates per customized quote
$5-$10/month gateway fee
$15 chargeback fee
No PCI compliance fee
Where Host Merchant Services Really Shines
Host Merchant Services accepts some high-risk industries through a partnership with EMS. Note that while the company offers extensive pricing disclosures on its website, these rates and fees only apply to low-risk businesses. High-risk accounts, being underwritten by a different back-end processor, will have a lot of variability in terms of rates and fees. You’ll have to obtain a customized pricing quote to determine what the company can offer you. A former web hosting company, HMS is ideally suited for eCommerce merchants.
Retail merchants can choose from various terminals for sale, as HMS does not lease equipment. Mobile processing is also supported through either Vital or SwipeSimple, which are third-party products. The company offers a variety of POS systems as well. eCommerce merchants can choose between the company’s proprietary Transaction Express gateway, Authorize.Net, or one of several third-party gateways.
HMS uses interchange-plus pricing exclusively for low-risk businesses, but your rates and fees will probably be higher than those published on its website as a high-risk merchant. The company provides 24/7 customer service and has an excellent reputation in this area. If your business falls into one of the categories of high-risk activities that it can accommodate, HMS is a top-notch merchant account provider.
Soar Payments offers a variety of products and services to enable credit card payments and help your business grow. The following key features are available:
High-risk merchant accounts
Offers PAX A920 “smart” credit card terminal
Authorize.Net, NMI, or USAePay payment gateways are available
ACH and echeck processing are available
ChargebackArmor anti-fraud and chargeback protection package available
Soar Payments Pricing
Variable processing rates for high-risk accounts (tiered pricing usually used)
Variable account fees for high-risk merchants
Usually includes a monthly minimum
A long-term contract and an early termination fee may apply
Where Soar Payments Really Shines
Soar Payments specializes in serving the high-risk community and has competitive pricing and terms that are attractive to low-risk companies as well. The company mainly focuses on eCommerce services but also offers countertop terminals and mobile card readers for retail use.
In addition to the Authorize.Net and USAePay gateways, it also offers the NMI payment gateway, which can integrate with most of the more popular online shopping carts. The gateway also integrates with Chargeback Armor, an automated chargeback prevention and response program.
Soar works with about a dozen banks and processors to place high-risk merchants and offers offshore accounts. Soar uses an automated quote-based pricing system and does not publicly disclose its fees or rates. You should expect a rolling reserve and a monthly minimum to be part of your high-risk account.
The company’s standard contracts include an initial two-year term, which will automatically renew for one-year periods after that. There’s also a $495 early termination fee, but this only applies during the first two years of your contract. Overall, Soar Payments offers very competitive terms for high-risk merchants.
Easy Pay Direct enjoys a strong reputation among users. Although its focus is primarily on the eCommerce sector, the company also offers support for retail businesses. Key highlights include the following products and services:
High-risk merchant accounts
Load-balancing feature available
Proprietary Easy Pay Direct (EPD) Gateway is available
Virtual terminal available with EPD Gateway
Countertop credit card terminals are available
Proprietary QuickClick shopping cart (plus support for 250+ third-party carts)
APIs and SDKs available for site customization
Easy Pay Direct Pricing
$99 account setup fee
$24.95 monthly account maintenance fee
Variable processing rates (tiered and interchange-plus pricing used)
Variable additional monthly and annual fees
A long-term contract may apply
No early termination fee (except for offshore accounts)
Where Easy Pay Direct Really Shines
High-risk specialist Easy Pay Direct offers its proprietary EPD Gateway as its primary product. It also provides full-service merchant accounts for both high-risk and low-risk merchants.
You’ll have to pay a one-time account setup fee of $99 to get started with Easy Pay Direct, but the company doesn’t charge an early termination fee if you close your account early. We don’t normally like account setup fees, but the extra effort required to underwrite your account justifies the expense for a high-risk business.
Easy Pay Direct offers load balancing, which helps you get around the monthly processing limits that often come with high-risk merchant accounts. Just be aware that you’ll usually have to pay separate monthly fees for each account, so it might not be cost-effective for some merchants. The load-balancing option and the robust features of the company’s EPD Gateway make it an excellent choice for high-volume businesses with an online sales channel.
Check Out These High-Risk Merchant Accounts For Specific Industries
If you’re looking for more specific recommendations relating to your particular high-risk business type or circumstance, the following resources should give you some further guidance:
Other Considerations For Choosing High-Risk Payment Processors
What if the high-risk payment processor you’re considering isn’t on our list? It doesn’t necessarily mean that they’re not good. They might actually be perfect for your business’s particular needs.
Having already discussed some general guidelines on pricing, contracts, and customer support to think through when deciding on a processor, there are some additional factors you might want to consider.
Hardware For High-Risk Processing
If you’re going to accept in-person payments, you’ll need the appropriate processing hardware to do so. Your choices include a standard countertop credit card terminal, a wireless terminal, a POS system and hardware, or a mobile app-based system that uses a card reader connected to your smartphone or tablet.
In most cases, you should buy your equipment outright. We strongly recommend against terminal leases, as they are noncancelable and usually come with four-year contracts. That means you would have to buy out all the remaining months of your lease if you close your account.
Due to the unpopularity of terminal leases, many providers now offer a “free” terminal with your account. Be wary of this and read the fine print. While this offer might work out if you only need one terminal, you’ll often pay a higher monthly account fee. You could also be locked into a long-term contract with a hefty early termination fee.
Accepting Alternative Payment Methods
In today’s payments environment, accepting credit and debit cards is merely a good first step toward maximizing the number of ways for your customers to pay you. Your merchant service provider will often offer additional alternative payment methods to make it more convenient for your customers to make a purchase. Depending on your business’s needs, you may want to consider adding ACH transfers, echeck payments, QR code payments, cryptocurrency payments, or digital wallets, such as Apple Pay and Google Pay.
High-Risk Payment Gateway & eCommerce Support
If your business has an online presence, you’ll need a payment gateway to process your eCommerce transactions. For mail or telephone orders, a virtual terminal (available as a gateway feature or as a separate product) will allow you to input card-not-present transactions from any internet-connected device with a web browser. Card readers that connect to your computer via USB or Bluetooth expand the usefulness of a virtual terminal by allowing you to process card-present transactions as well.
These services aren’t fundamentally different from what a low-risk business would use. Most high-risk providers typically offer a choice between the popular Authorize.Net gateway and a proprietary product designed to be compatible with all the banks and processors they work with to underwrite your account.
Regardless of which provider you use, you should expect your gateway to come with a solid set of security features, including credit card tokenization and SSL encryption. High-risk providers also tend to emphasize chargeback prevention features that attempt to prevent — or at least flag — potential chargebacks before they occur. Services such as Chargeback Armor help detect potential chargebacks. Consider adding them to your account if your provider offers them.
Over the past several years, payment gateways have evolved into cloud-based integrated payments platforms that consolidate payment transaction data from online and in-person sales, allowing you to run your business from any internet-connected device. While they offer tremendous power and convenience, these platforms are proprietary and can create compatibility issues if you switch to a different merchant services provider.
Why You Shouldn’t Choose A Payment Service Provider For High-Risk Merchant Services
However, all PSPs have strict policies against servicing most high-risk businesses. To evade these policies, some merchants fudge the truth about their business’s nature. Don’t do this! Lying to your processor about your business will get your account shut down immediately. You’ll also probably be placed on the MATCH list, making it far more difficult to get approved by any merchant account provider.
One notable exception is Square’s program for CBD merchants. While the processing rates are higher than those for low-risk merchants, they’re still reasonable compared to what other high-risk providers typically charge. If you’re running a CBD business, consider this option.
The Final Word On High-Risk Credit Card Processing
While we confidently recommend all six of the high-risk merchant account providers profiled in this article to businesses that need high-risk credit card processing, determining which one is best for your particular business will depend on several factors. These include, among other things, your personal and business credit history, your existing credit card processing history (if any), and which high-risk business category you fall under.
In narrowing down your search for the best provider for your business, be sure to follow these best practices, which should help you make an informed decision — and avoid any costly mistakes:
Don’t provide false or misleading information about the nature of your business or any other aspect of your business history.
Don’t blindly choose the provider that offers you the lowest rates without considering contract terms and customer support.
Don’t enter into an equipment leasing contract.
By following these guidelines and carefully negotiating with your chosen provider’s sales team, you should be able to secure an affordable high-risk merchant account that will pay for itself over time with increased sales and enhanced analytical capabilities. Good luck!
In Summary: The 6 Best High-Risk Merchant Account Providers
Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law, and currently resides in Paso Robles, California.
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Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
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