When you sell products or services online, you need a payment processing solution that provides you with the flexibility you need to grow your business. A high-risk merchant account offers exactly that type of functionality for businesses that present a higher risk to banks and credit unions due to their specific sales channels, industry, customers, or products.
With a high-risk merchant account, you can leverage third-party vendors specializing in serving businesses in the same risk category, like merchant account bad credit. Some standard merchant accounts simply won’t work for companies in certain industries like adult products, healthcare practices, used car sales, and others. But that doesn’t mean you can’t take advantage of affordable payment processing options.
What Makes a Merchant Account High Risk?
Merchant accounts fall into one of three categories, each with a different level of risk to the bank or credit union providing the account.
A low-risk merchant account might be a coffee shop that sells a lot of coffee beans and coffee-making supplies. A medium-risk merchant account might be an online sporting goods store. A high-risk merchant account, though, might be an online adult toy shop.
The risk associated with each account is based on several factors, including the business’s average order amount, the type and volume of credit cards used in the orders, the percentage of fraudulent orders, the types of goods and services being sold, and the business’s history, and more.
Selling Adult Products or Services
While all industries have some level of risk involved, some types of businesses are simply a lower risk for banks and credit unions. Unfortunately, that means these businesses might not be able to open a standard merchant account. However, there are still options available, including an adult merchant account.
An adult merchant account is just like a standard merchant account in that it allows you to accept credit cards online, but the account is specifically designed for adult products and services.
Selling Drugs, Medical Devices, and Healthcare
If you sell products and services related to healthcare, you’ve likely experienced difficulties when trying to get a merchant account. Healthcare is a heavily regulated industry, and that means standards for credit card processing are incredibly strict. As with adult products, there aren’t any specific guidelines that state what makes a merchant account healthcare-friendly, but there are a variety of industries that are heavily impacted by healthcare regulations. These include the pharmaceutical industry, medical equipment and supplies, and healthcare-related information.
Selling Cosmetics and Fragrances
Cosmetics and fragrances are heavily regulated industries that make it difficult to get a standard merchant account. If you sell these types of products, you might be better off searching for cosmetics or fragrance merchant accounts than a standard account.
Selling Used Goods
While used goods are legal and regulated industries, some banks and credit unions might be wary of providing a standard merchant account for businesses selling used goods online. If you sell used goods online, you might be better off with a standard merchant account, or you can try to find a used goods merchant account.
If you sell adult toys, pharmaceutical goods, or used goods, you might be better off with an account designed around those industries. This will help you avoid being flagged as high risk, and you may be able to negotiate better rates than you would with a standard account.