We’ll just come out and say it: being a high-risk merchant can be a drag. The high-risk designation can seem like a fat target on your business’ back for superfluous account fees and hassles. The potential for processing fraud and chargebacks in your vertical can narrow your access to merchant services significantly. ChargebackHelp is here to help.

We can guide merchants through the troubled waters of high-risk credit card processing, starting with five pro tips to smooth sailing with merchant services:


If you’re a high-risk merchant, embrace it. Let’s say you’re in porn, robocalls, gaming, or some other stigma-intensive industry; don’t sugar coat your business plan to your acquiring banks or merchant services. They’re financial institutions, not churches. They’re going to find out exactly what you do once you start processing. You don’t want to be locked into a contract with a provider that suddenly discovers you’re too risky to deal with.


High-risk merchants invariably have to enter into longer contracts with a limited selection of providers compared to low-risk. Merchant services typically contract high-risk merchants to a 3-5 year commitment and then move to an auto-renewed annual arrangement thereafter. While under contract, you’re basically responsible for the revenue your provider expects for the duration of the commitment. So if you go belly-up three years into a five-year contract, you’ll still have to pay the average monthly fees for those remaining two years.

More Tips for High-Risk Merchants

That’s why it’s so important to read your contracts. Be on the lookout for auto-renewal clauses and know the dates when your contract rolls over. Be especially mindful of the TERMINATION section, which is where you’ll find such clauses as “liquidated damages” and other fees that spell out how much you’ll be on the hook for if and when you need to bail.


Most high-risk processors require their clients to maintain a “rolling reserve” of cash on hand to cover chargebacks. Reserves function much like overdraft protection; if the merchant does not cover a chargeback themselves, then the reserve kicks in to cover it. Ultimately, you get this money back if unused after a period of time, but at 5-10% of your monthly sales, reserves will inconvenience your cash flow if you’re not prepared.


All these costs and constraints set a perilous status quo. When merchants come to expect to pay more to do business, shady operators saturate the market to exceed those expectations and gouge merchants for the services they need.

The best way to spot these bad actors is through due diligence. Shop around for merchant services and compare. Your acquiring bank can be an excellent ally in this process. They can illuminate where certain merchant service providers conflict with industry best practices. Best of all, as your bank’s client, you can access this resource for free.


And now for some good news. As with all risky business, rewards are there for the taking. Though a high-risk merchant may pay more for merchant services than their low-risk counterparts, the right provider can deliver some premium value. A good processor will allow you to run primarily card-not-present transactions. You’ll be able to process multiple currencies, crypto, and subscription billing with no transaction caps. And you’ll be able to process more flexible outside of the Group of Seven economies. These are all things low-risk merchants do not get. No guts, no glory!

For more concrete steps specific to your business that you can take to optimize your merchant services, give ChargebackHelp a call: 1.800.975.9905