Low Risk vs. High Risk Merchant Accounts

Prior to looking for a merchant account provider, it is important to know if your business might be classified as high risk. There are many differences between a low risk vs. high risk merchant accounts business when it comes to setting up merchant accounts, so if you are not prepared you may find yourself having trouble getting the services you need. With this in mind, consider the differences between low risk and high risk companies and you will be better prepared to move forward.

What Makes a Business Low risk vs High Risk Merchant Accounts ?

Though different providers may have different parameters, there are some general industries that are automatically considered high risk. These industries include:

  • Adult Entertainment: This is considered high risk mostly because regulations are considered unstable in this industry.
  • Financial Services: Because of its unpredictable nature, this service is always considered high risk.
  • Airline Tickets: Airline tickets are prone to getting charged back, which makes them high risk.
  • Online Gaming: Another industry that is considered high risk because of the inherent instability of the industry.
  • Law Firms: There is no certainty that a law firm will receive any business, which leaves it as high risk.
  • Many more: There are dozens of other, more specific business types that are qualified as high risk. These general industries are a good guideline to work with.


Additionally, certain factors are more likely to determine low risk vs high risk merchant accounts. If you are in an industry where your clients might be likely to chargeback, you can expect that your business will be classified as high risk when looking for merchant accounts. Furthermore, any company that operates solely with card not present transactions is prone to be considered high risk. If you fall into any of these industries or have any of these features, be prepared to be classified as high risk.

Are There Major Differences?

Overall, the key difference between high risk and low risk merchant services are the fees you can expect to pay. Regardless of which your business is classified as, you will be responsible for monthly fees, batch fees, terminal fees, transaction fees, and possibly others. For low risk businesses, the fees are usually set at a lower rate and you know what you can expect.

When it comes to low risk vs high risk merchant accounts, many merchant account providers will not only have higher fees across the board, but they will also include additional fees. One example that this can come out is in transaction fees; a card not present transaction might include a higher rate than a physical credit card swipe. More immediately, higher risk businesses are less prone to be accepted by merchant service providers.

Setting up What You Need Separates Low Risk vs High Risk Merchant Accounts

If you do need to set up a high risk merchant account, make sure that you are applying to a provider that has a history of offering this service. Since some companies will simply not accept high risk industries, you are better off not wasting your time. Furthermore, make sure that you can still get a reasonable fee structure. Though high risk merchant accounts will typically have higher fees, you can still find companies offering reasonable rates.

If you have more questions on whether your business might be considered low risk vs high risk merchant accounts, contact a representative at Transparent today to get the information you need.