By max April 5, 2024
Are you labeled a high-risk business? Finding a reliable payment processor for such a business can be challenging. Merchant service providers choose the companies they work with carefully. Businesses offering age-restricted products, such as alcohol, tobacco, and adult content, and those operating in an industry that faces legal controversies are categorized as high-risk.
The good news is that if you also fall into the high-risk business category, you no longer have to settle for cash payments only. Given that you choose one of the best high-risk payment processors, you can accept credit/debit cards, digital wallets, and even cryptocurrencies.
Payment processors for high-risk businesses are willing to offer competitive processing rates, multiple payment methods, and a full-fledged POS system that integrates seamlessly with your existing infrastructure. In this post, we’ve listed a few popular payment processors that accept high-risk merchants. Let’s take a look.
Best High-Risk Payment Processors for 2024
National Processing
Processing Rate and Fees: The in-person and online transaction rates vary. The company charges 2.5% + 10 cents per transaction for card-present payments and 2.9% + 30 cents for online, card-not-present transactions. A monthly fee is also charged in addition to the fixed processing rates.
Contract Length: With National processing, you will be stuck with a 2-3 year contract that can cost you an early termination fee of up to $495 or higher.
Customer Support: National Processing has a technical department that serves 24/7 for all technical issues. You can contact their support department via email, live chat, SMS, and phone for other queries. They are available Monday to Friday.
Hardware: National Processing sells hardware from third-party manufacturers. You can get a card reader or a complete POS station, depending on your requirements. The cost, however, is not mentioned on their website.
Supported Payment Methods: National Processing supports all major credit and debit cards, digital wallets, and ACH transfers.
National Processing is our top choice for high-risk merchants, including those selling firearms, ammunition, tobacco, cannabis, and other legally restricted products. Its competitive processing fees, combined with its excellent compatibility with multiple card readers, make it one of the best for all types of merchants. However, the company imposes a long-term contract with an early termination fee.
It works with Clover and SwipeSimple hardware, the leading POS units on the market. You can also reprogram your existing point-of-sale systems to make them compatible with National Processing. National Processing supports Authorize.net for online transactions, but you must reprogram the gateway to make it work with this credit card processing company. Alternatively, you can choose their native payment gateway.
Why It’s Recommended
National Processing has collaborated with financial institutions that are willing to work with high-risk merchants. As a result, the company serves businesses in high-risk industries. Additionally, it offers many fraud detection and prevention tools that keep your system secure and help you mitigate the risk of chargeback.
Moreover, National Processing allows seamless integration with third-party shopping cart solutions, accounting systems, and eCommerce platforms. It covers WooCommerce, OpenCart, ZenDesk, and more. These integrations provide the best checkout experience for your customers paying online.
PaymentCloud
Processing Fee: PaymentCloud works on a quote-based pricing model, which depends on your risk factor and the services you need. On average, it charges 3.5% + 25 cents per transaction if you are a high-risk merchant. They might also implement a monthly processing fee of up to $50.
Supported Payment Methods: PaymentCloud is one of the most versatile payment processing companies in terms of supported payment methods. It works with credit/debit cards, ACH transfers, eChecks, digital wallets, and cryptocurrencies.
Contract Length: The company hasn’t disclosed information about its contract length, although we believe it implements a fixed-length contract, which varies for each merchant.
Customer Support: PaymentCloud’s customer support is available from Monday to Sunday, although timings might vary. You can contact them from 7 AM to 6 PM on weekdays.
A reputable payment service provider for low-risk, medium, and high-risk businesses, PaymentCloud is your best choice if other merchant service providers reject your application. It offers a payment gateway, POS systems, and processing services for all payment types, including cryptocurrencies. The company offers hardware for mobile, in-person, and online checkout.
They offer Clover hardware and can reprogram your existing system to work with PaymentCloud. You get a free card reader if you sign up for its zero-cost processing plan. Plus, you can use its virtual terminal to process card-not-present transactions over the phone. PaymentCloud provides a recurring billing service that allows merchants to set up automatic billing for subscription-based services.
The only downside to its services is the lack of transparency about pricing and the long wait for application approval. The company has an excellent approval rate for all types of businesses, including high-risk merchants, but the process can be lengthy and time-consuming.
Why It’s Recommended
The company accepts the applications of high-risk merchants that deal in pharmacy, consulting, dating sites, telemedicine, tech support, law offices, and adult products. Businesses categorized as high-risk because of their high ticket and large volume of transactions can get easily accepted for a merchant account at PaymentCloud. PaymentCloud can integrate with most shopping cart solutions to provide customers with a seamless checkout experience.
Host Merchant Services
Processing Fee: Host Merchant has three pricing plans for retail storefronts, restaurants, and eCommerce. For online transactions processed through your website, the company charges a flat 0.35% + $0.10 per transaction. For retail, the pricing is 0.25% + $0.10, and for restaurants, they charge $0.20% + $0.09 per transaction. In addition, the company charges a payment gateway fee of $5-$10 and a chargeback fee of $15.
Hardware: Host Merchant offers a full-fledged POS system from Clover, SwipeSimple, Bonsai, and Vital. You also get a virtual terminal for payments over the phone and an integrated payment gateway for online transactions. The pricing for hardware is not disclosed on the website, though.
Application and Approval: Host Merchant has the fastest approval time, with applications getting accepted within 24 hours. They also have around 98% approval rate for all merchants.
International Businesses: The company supports offshore businesses and accepts payments in multiple currencies. It has partnered with international banks to process credit card payments for businesses based in different parts of the world.
Customer Support: You can check out their FAQ section and Knowledgebase to find answers to your general questions. They also have a dedicated customer support team that’s available to offer services 24/7.
Host Merchant is a famous web hosting company that now offers payment processing services to businesses of all risk levels. For online payments, you can sign up for Authorize.net or use the company’s own payment gateway, “Transaction Express.”
Host Merchant has collaborated with Electronic Merchant Systems (EMS) to serve high-risk industries and allow customers to pay online, virtually through mobiles, and in person. The company also provides free web hosting services for your website.
Host supports an interchange-plus pricing model, but the rates advertised on its website are primarily for low-risk companies. So, it’s best to get a custom quote from their customer representative before signing up for a plan. The only thing people don’t like about the company is its high processing fee for startups and businesses with no processing history.
Why It’s Recommended
Businesses with a processing volume of $10,000+ should consider Host Merchant Services. With a transparent pricing policy, excellent hardware options, and round-the-clock support service, the company has become a leading payment service provider for high-risk merchants. They cover different business models, from freelancers to non-profit organizations and from retailers to restaurants. In fact, there’s a plan dedicated to each business model.
Soar Payments
Processing Fee: Soar Payments has an online quotation system that allows you to get an instant quote for merchant services. This is based on your industry type, processing volume, and risk level.
Supported Payment Methods: In addition to credit/debit card processing, Soar Payments accepts digital wallets, eChecks, and ACH transfers. It also supports recurring payments for subscription-based service providers.
Hardware: You can get a PAX A920 terminal that comes with a printer and a mobile card reader.
Chargeback Protection: The company has partnered with Chargeback.com to integrate the chargeback protection plan into its NMI gateway. This prevents illegitimate chargeback requests, sends alerts, and detects fraud.
Contract Length: Soar Payments implements a fixed-term contract for high-risk merchants. You can expect a two-year contract, which will be renewed automatically for another year. The early termination fee is around $495 but is applicable to the initial term of the agreement only.
Soar Payments has collaborated with multiple banks to accept merchants across different industries, including high-risk businesses. Although they haven’t disclosed the processing fee on their website, you can use the automated quote system to calculate your processing fee based on the services you need. The company might also ask you for a rolling reserve for security reasons.
Approval is quite straightforward and takes 3-5 business days at maximum. They specialize in serving high-risk merchants, although Soar Payments offers custom plans for low and medium-risk businesses as well. It’s best for eCommerce businesses. The hardware options with Soar Payments include a credit card reader and a countertop terminal. For eCommerce transactions, the company offers NMI gateway, Authorize.net, and USAePay—all of which integrate seamlessly with multiple shopping carts.
Why It’s Recommended
Soar Payments is one of the few payment processors to serve more than 50 high-risk industries. They offer a customized solution for your business type. There’s no setup fee, and it does not charge any hidden fee. Although pricing isn’t transparent, getting a quote is pretty simple. You can use its online quote generation system to know the processing fee. Soar Payments accepts multiple payment methods and is compatible with third-party integrations.
Durango Merchant Services
Processing Fee: Durango hasn’t mentioned the processing fee, as it charges a custom quote for each business type. The best part about its customized processing is that you can negotiate the contract terms and pricing.
Hardware: Durango has a dedicated payment gateway, Durango Pay, for e-commerce transactions. It also offers credit card readers and accepts payments through the iProcess app. Its hardware equipment is available for sale and the price ranges between $170 and $500.
Accepted Payment Methods: Durango is compatible with all major credit/debit cards and digital wallets and also has its own payment infrastructure, which consists of a mobile app, a payment gateway, and a virtual terminal. It also accepts eChecks, cryptocurrencies, and ACH transfers.
Customer Support Service: Durango offers a dedicated account manager to each merchant, which is the best part of its support service, although the hours of operations are limited. You can contact them through email, live chat, and social media.
Durango Merchant Services is your best option if you are looking for high-risk merchant service providers that offer services dedicated to risky industries. Like other payment service providers, the company hasn’t disclosed its pricing policy on its website. Instead, it quotes a custom price based on your industry type. Durango has partnered with offshore payment processors to support international businesses.
Durango has its own payment gateway, i.e., Durango Pay, which is packed with all the necessary security and processing features to conduct eCommerce transactions safely. They also provide POS terminals for retailers to process NFC and EMV-based payments. Durango offers a dedicated customer support representative who will assist you in every step of the account setup. They handle technical, non-technical, and all kinds of issues, although they might not be available 24/7.
Why It’s Recommended
If you are looking for a fair merchant service provider that offers services designed specifically for high-risk businesses, Durango is the best choice. They offer robust security tools and dedicated customer support services. Contact their support representatives to learn more about Durango’s offerings.
Who is a High-Risk Merchant?
A payment processor will consider your business high-risk if it has a history of multiple chargebacks, refund requests, and fraudulent transactions. Finding a traditional bank is quite challenging when you are categorized as high-risk. Fortunately, there are payment processors who are willing to serve high-risk industries. They have plans dedicated to these businesses. Here’s when your business is considered high-risk:
High-Volume Transaction: A business with a high processing volume, probably $20,000+ per month, with an average transaction size above $500, is considered high-risk. Examples include a furniture business, a jewelry store, and a brand selling luxury items.
International Business: If your business operates in international countries, especially those classified as high-risk or with a high rate of fraudulent and chargeback ratios, it will be considered risky. Basically, if you operate anywhere other than the US, Australia, Canada, and European countries, you will be categorized as a high-risk business.
Startups: Businesses with no processing history are also considered risky, as they don’t have a processing history or financial records to prove their credibility.
Industry Type: The most common way to determine a business’ risk level is its industry type. Businesses operating in an industry that receives legal controversies will be high risk.
How to Choose a High-Risk Payment Processor?
First, you must thoroughly review the contract before signing up for the service. Each merchant, especially those catering to high-risk businesses, has different terms and conditions for merchants. These are specified in the contract.
The pricing is also custom, i.e., it’s based on your risk level, processing history, and other factors. Reading the contract will give you a clear picture of how much you will pay annually to your payment processor, the additional fee, and other terms.
Note that some vendors charge extremely high processing fees to balance the risk they bear. Others might impose a rolling or other kind of reserve to ensure they won’t face any financial trouble if your business faces a lot of chargebacks. Many payment processors might accept some high-risk businesses, but they don’t offer services designed specifically for these industries. They might not offer the security tools to help you manage the chargeback ratio or mitigate the risk of fraudulent transactions.
So, it’s best to stick to a payment processor that serves high-risk businesses. Not only do they have an excellent high-risk merchant account approval rate, but they also offer services customized to your business needs. The payment processor will ask you to send your tax documents, bank statements, business records, and other financial documents to determine your risk level. You might also need to provide the Merchant Category Code (MCC) to help the payment processor determine your industry type and the associated risk.
Conclusion
We’ve reviewed these payment processors based on their processing fees, services offered, hardware, and reputation. The best merchant service provider for your business depends on the products you offer and your budget. Fortunately, each processor we’ve listed above is compatible with high-risk industries and will easily approve your application. They might even offer advanced security tools to prevent fraudulent activities, chargebacks, and other security issues. Reach out to them to learn more about the pricing plans and merchant application criteria.