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What is the True Cost of Your High Risk Merchant Account?

A high risk merchant is categorized as a business with added risks, which require a high risk merchant account. Many new business owners may not realize this yet until they get rejected by big banks after applying for payment processing.

Popular high risk merchant account definitions

  • High risk business able to accept credit cards as payment option
  • Merchant considered high risk looking to accept plastic as payment
  • Used to charge excessive fees to a merchant accepting credit cards

Some businesses are considered higher risk than others, so a merchant processor will take on more risks when offering a high risk merchant account. So, in order to offset the higher risk, it requires higher rates and fees.

High risk merchant account costs more

If you are a high risk merchant, your business model has too many variables for banks and big time lenders to lose money. Therefore, funding your business just involves too much risk.

That being said, payment processing companies will provide services to your business as a high risk merchant and will have to assume more financial liability for you. Therefore, the costs accompanying the approval for your high risk merchant account will reveal to offset the risks and offer your business payment processing options.

Price to pay as a high risk merchant

There are many factors involved if you want to know how much your business will have to pay to get approved for a high risk merchant account. These include the following criteria.

  • Chargeback ratio
  • Credit score
  • Good history with other processors
  • As a regulated industry
  • Payments structured on a recurring billing model

Processing fees for high risk merchant accounts

In comparison to traditional merchant accounts, high risk businesses usually cost more. In fact, it can be 3 to 10 times more on the basis of how risky your business as evaluated.

Almost any merchant account is given options by high risk credit card processing providers to lock their merchants into long-term contracts. However, contract terms can usually be harder to negotiate, particularly in the high risk processing arena.

Unfortunately, most high risk merchants don’t have the capacity to bargain. So, it’s not advisable to sign onto a contract that will lock you in for the long-term or if it doesn’t feel right.

There will be double or triple the amount of fees for most high risk merchant accounts than that of a traditional business. Traditional merchant accounts have many options without any monthly fees to worry about, unlike high risk accounts which is harder to come by.

Shop around for low cost payment processors

Remember that there are different standards and underwriting abilities for all payment processing companies. Therefore, you need to remember that a business can be high risk to one and low risk to another company.

Some payment processors can offer reasonable rates for high risk merchants like you. But that doesn’t mean that you may not receive the highest quality service. Many of them would offer the most competitive rates in the industry.

If you already know the true cost of your high risk merchant account, perhaps it is time to begin your search for the best option to get your business up and running in no time.


( Merchant Account Specialist )

Mitchell Fardell is a highly experienced payment processor who has worked for First Card Payments since 2019. In that time, he has worked on large accounts, small accounts, and everything in between.

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