What categorizes a merchant as high risk besides MCC codes. It is based on product sold, company location, straight-sale/webshop or recurring, Card not present, if risk for chargebacks is high. Which is most acquirers is above 1% even though some industries are under but still counts as high risk merchants.
There are three categories of risk with merchant accounts, low – medium – high. But just because you are in the high risk category, it doesn’t mean you can’t obtain merchant accounts, it just means that your fees will be higher and most likely they will add a rolling reserve to your terms.
What Industries are High Risk
Here you can see a few of the industries which is categorizes as high risk and we support. This means that we can help you get processing for your high risk merchant account.
- Travel (airlines, vacation rentals and packages)
- International e-commerce
- The Alcoholic Beverages Industries
- Electronic Cigarettes
- Forex (Licensed only)
- CBD Products
- Hemp Oil
- Calling cards
- Debt Collection
- Mail Order/ Telephone Order (MOTO) Processing
- Membership Organizations
- Time Share
- Vapor products
- Dating websites
- Multi-Level Marketing
- Pharmaceutical Industry
- Web hosting
- Adult Entertainment & Ecommerce
- Online Gaming
- Fantasy Sports
- Bitcoin – Cryptocurrency
- Weapons & Ammunition
- And much more
With the online processing business growing rapidly, most acquiring banks has to follow and will always update demands and requirement as well as review industries and checking MATCH.
Why is my Business on the list
We will try to cover a few of the many business models on the list, just to give som clarity, but we can’t cover them all. The list is vast and it grows as Mastercard, VISA and the acquiring banks keeps updating and adding.
Dating & Adult – In the dating and adult industry there are many similar components which puts them in the High Risk category. One of many is that they are usually based on a recurring model, and another could be product is never as promised with many fake users/videos. . This means that they are prone to receiving chargebacks which then makes the Risk higher on the acquiring banks side. PurePay understands your headache but we can help you find peace in getting you going in no time.
Cryptocurrency – Cryptocurrencies are known for wanting to be unregulated by governments and being their own. Existing since 2010 with the first and still biggest coin BitCoin, it has seen really strong times which escalated in December 2017 when BitCoin browsed around $20.000. It now seeing very troubling times and it causes people to worry. Also it has been known for a lot of scams, so these things makes for a high risk category.
Casinos – If you have ever been to Vegas, you know that the industry is full of light music and enjoyment, and glitter. Still casinos struggle to find payment processors and the primary reason is that governments in a lot of countries don’t approve of this business model. Same as with cryptocurrencies casinos are also well-known for having fraudsters and unsatisfied people in their business. So many financial institutions want to focus solely on business’ which can improve profit in a higher instance and with less risk.
Nutraceutical – Medicinal products comes with high risk, as there are many unregulated products on the market. This puts them under the high risk label, and there are even products that are banned.
Recurring & Negative Option Billing – As mentioned on our blog with Mastercard making new rules for negative option billing, these methods are often used for “free trial” and/or putting you on a recurring subscription you don’t understand. So the risk for chargebacks is high and this makes for higher prices but with PurePay you can merchant accounts to support them.
Travel Agencies & Airlines – As the travelling busines is very reliant on other factors than just you and them, they are prone to get chargebacks. Can be cancellations, being late or customers wanting money back. This means that most acquiring banks will say no or if they do say yes it will come with a rolling reserve at 10% – 20% and demand that packages are delivered within 2-3 months.
We hope that gave you a better overview of what the industries are and why. We would love to get you going, so if you are in need or have question, feel free to contact us today.