High Risk Merchants

High Risk Merchants

Adult Merchant Account Payment Processing

The adult entertainment industry has the potential to make money. If it didn’t, businesses wouldn’t be able to sell items in the different areas of the industry. These areas include adult online dating services, toys, items, and services.

While the field is legal, issues can come up that may result in adult merchant account services deciding not to open credit card processing accounts for those people who work in adult entertainment. Learn what it takes to run a business in this industry. Plus, find out how a high-risk merchant account could help business owners in this industry.

Travel Agency Merchant Account

Running a travel agency or tour company is an excellent way to make money. People spend millions of dollars each year on travel, and your business can tap into this lucrative industry. However, there are some obstacles you must overcome before starting your travel business. One of the hardest is obtaining a travel agency merchant account.

You need an e-commerce merchant account services so that you can accept credit cards as payment for products and services. Most people do not pay for travel services in cash, and most of your transactions will probably happen over the phone or internet. That makes it imperative that you accept credit cards so that you don’t lose out on business. The problem is that travel agencies, tour operators, and other firms in the tourism industry are considered high-risk merchants. This may seem frightening because there are higher fees associated with high risk merchant account , but it is not the end of the world. The hard part is getting approved for a merchant account.

Electronic Cigarette Merchant Account

Many things make merchants high-risk. The main one is the nature of their business. Some high-risk merchants offer moneymaking products or services. Others offer adult entertainment or online gambling . Still, others are travel agencies or pharmaceutical companies . Some are e-cigarette and vape shops. All these products and services are legal, but they do come with risks.

What is a high-risk merchant?

The more chargebacks a business comes with, the higher the risk. Hence, the main factors that matter are industry reputation and processing history (it’s recommended to keep your chargeback ratio lower than 0.9% of your total transactions).

Here are overall characteristics of a high risk merchant, but note that it widely differs based on a certain payment processor’s guideline:

  • More than $20,000 monthly sales volume
  • Average credit card transaction higher than $500
  • A business sells products and services to countries known for high levels of fraud
  • Bad credit history and excessive chargebacks.

Who needs a high-risk merchant account?

An example of high-risk businesses is the travel industry, as there are various factors there that can cause cancellations. This usually ends up with a number of refunds and customers who file chargebacks. Some others are gambling, forex trading, and adult-themed websites, to name a few.

There are many other industries or business models that are prone to chargebacks, so here’s the list of the most common types of businesses that need high risk merchant accounts.

  • 1-800-type chat sites
  • Airlines or airplane charters
  • All sexually-oriented or pornographic merchants: (i.e., companion or escort services, adult telephone conversations, adult bookstores, online adult membership or matchmaker services, adult paraphernalia or toys)
  • Annual contracts
  • Antiques
  • Attorney referral services
  • Auctions
  • Automotive brokers
  • Bankruptcy attorneys
  • Banned / illegal goods & services
  • Brokering
  • “Business opportunities”
  • Car parts
  • Casinos, gambling or gaming
  • Chain letters
  • Check cashing services
  • Cigarettes, e-cigarettes, CBD or Vape shops
  • Coins, collectible currency, or autographed collectibles
  • Collection agencies
  • Coupons or rewards-points programs
  • Credit protection, counseling, or debt repair services
  • Dating
  • Debt collection services
  • Direct response marketers
  • Drug paraphernalia
  • E-books (copyrighted material)
  • Electronics
  • Event tickets brokers
  • Extended warranty companies
  • Fantasy sports websites
  • Finance brokers, financial consulting, or loan modification services
  • Furniture sellers
  • Indirect financial consulting
  • Financial planning, strategy or advising
  • Game codes and hacks
  • “Get rich quick” books, programs, etc.
  • Health and wellness products
  • High average ticket sales
  • “How-To”-type websites (i.e., “Learn How to Make Money on The Internet”)
  • Horoscopes, astrology or psychic services, fortunetellers
  • “Hype” products or services
  • Hypnotists or self-hypnosis services
  • International shipping, cargo, or import/export
  • IPTV services
  • ISP and hosting services
  • Life coaching
  • Lingerie sales
  • Lotteries or sweepstakes
  • Magazine sales
  • Mail or telephone order sales
  • Medical care programs
  • Membership based companies
  • Money transfer
  • Merchants on the Terminated Merchant File (TMF) or MATCH List
  • Merchants with poor credit
  • Modeling or talent agencies
  • Multi-currency sales
  • Multilevel marketing (MLM)
  • Music, movie, or software downloads or uploads
  • Nightclubs / cabaret bars
  • Nutraceutical
  • Offshore corporation establishment services
  • Online gaming
  • Pawn shops
  • Phone locking services
  • Prepaid calling cards
  • Prepaid debit cards
  • Real estate
  • Replica handbags, watches, wallets, sunglasses, etc.
  • Self-defense, pepper spray, mace, etc.
  • SEO services
  • Smartphones – sale, resale & spare parts
  • Social networking sites
  • Sports forecasting or odds-making/betting
  • Sub-acquiring / merchant aggregation
  • Subscription / continuity based billing
  • Technical support & web development
  • Timeshares or time-share advertising
  • Tour operators
  • Travel clubs, services, or agencies
  • Vacation planners
  • Vacation rentals
  • Vitamin and supplement sales (i.e., diet pills, prescription pills, health supplements, pharmacy products)
  • VoIP services
  • Weapons of any kind, including guns, knives, stun guns, or ammo. Also includes any parts of weapons (i.e., butts, triggers, magazines, etc.)

So, if you run a business in the industries mentioned above and similar, you need a high-risk merchant account to accept credit card payments on your website. If you are a high-risk merchant, you need to deal with higher costs of merchant account than regular merchants.