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High-Risk Credit Card Processing

High-Risk Credit Card Processing: The Best Service Providers of 2024

When it comes to credit card processing, not all merchants are created equal.

Certain factors can saddle merchants with a “high-risk” label. These high-risk merchants typically face increased fees, more restrictions, and have limited options in terms of providers willing to work with them. 

Some merchants know from the start that they will need high-risk credit card processing due to the nature of their business. In other instances, merchants may be forced to go the high risk route because of other factors, like excessive chargebacks.

In this article, we’ll discuss the pros and cons of high-risk credit processing. We’ll also hook you up with a list of top-rated high-risk payment processors of 2024, which should help you find the right one for your business.

What is High-Risk Credit Card Processing?

High-Risk Credit Card Processing

[noun]/hī • risk • kre • dət • kard • prä • ses • iNG/

High-risk credit card processing is a subset of merchant payment processing services, targeted at merchants considered “high risk” by conventional banks. The processor will generally allow for greater risk exposure in exchange for higher fees.

There are multiple factors that can make merchant processing riskier than what’s considered “normal.” If we drill down, though, we see that the primary danger is the increased risk posed by chargebacks.

It could be due to the type of product or service being sold, or the average dollar amount for monthly sales. It could also be the regions or countries in which you do business. Any of these factors could make you more susceptible to fraud or abuse, as well as chargebacks resulting from that activity.

As a merchant, you will ultimately pay the price for chargebacks. However, processors and banks have risks, too. In fact, the average chargeback will cost your bank $26 per incident due to processing costs and fees assessed by the card networks. This adds up over time; banks and processors could be open to millions of dollars in potential losses each year.

Entities that offer high-risk credit card processing are willing to take on that added risk. They will let you take on greater risk exposure than a bank or processor would typically allow. But, as we’ll see in the next section, this freedom comes at a cost.

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What Makes a Business “High Risk?”

Being a high-risk merchant doesn’t necessarily mean your business is more untrustworthy than your counterparts. In fact, all it really means is that processors expect to see a higher rate of disputes filed against your store.

This could be due to elements inherent to your business, such as the type of product or service being sold, or the average dollar amount for each sale. It could also be the regions or countries in which you do business. For example, certain verticals like gambling, adult entertainment, or dating sites, are more prone to chargebacks.

See a partial list of high-risk verticals

On the other hand, merchants with a history of excessive chargebacks can also be deemed high risk, regardless of product vertical. Their chargebacks can be due to anything from internal policy errors to friendly fraud. Other factors, such as your business’s credit score or how long you have been in business, can also have an impact.

To the processor, however, the source of your potential claims is immaterial. Risk is solely estimated based on how many chargebacks they expect you to have.

Pros and Cons of High-Risk Credit Card Processing

We’re not saying that high-risk processing is desirable, per se. Becoming a high-risk merchant shouldn’t be a business goal or anything.

What we are saying, however, is that conducting payments with the help of a high-risk processor can be a viable path forward. In some cases, this can even be a highly-profitable option. That’s why many eCommerce merchants actually prefer it over conventional payment processing.

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Let’s look at some of the pros and cons of working with high-risk credit card processing companies. This will give you a better impression of what to expect.

The Best High-Risk Credit Card Payment Processors

We’ve covered what high-risk processing is. We looked at some of the pros and cons of working with high-risk credit card processing services. But, where do you start your search for high-risk credit card processing services?

Not to worry. We’ve already done the work of compiling some of our “best of the best” high-risk credit card processing companies. Check out our list of some of the best high-risk processors of 2024 below (arranged in alphabetical order):

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Avoid High-Risk Processing by Controlling Chargebacks

Even with all the challenges, some merchants still gladly opt for high-risk credit card processing. For some, it’s the cost of securing bigger payoffs. For others, it is simply their only option. 

If there is an upside to that, it may be that high-risk providers are also less likely to close your account because of excessive chargebacks. Maintaining a high-risk merchant account may be costlier, but it may give you more opportunity to get your chargebacks under control.

That said, if you are experiencing an elevated chargeback rate and don’t want to be forced into the high-risk category, there is an alternative: chargeback prevention.

Chargebacks911® helps sellers in all MCCs, sales models, and product verticals to avoid excess chargebacks. Our platform also enables high-risk merchants to recoup revenue that would otherwise be lost to fraudulent chargebacks.

To learn exactly how much you could be saving, contact us today for a free, no-obligation chargeback analysis.

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