Updated May 2024

What is a High-Risk Merchant Account?

A high-risk merchant has a higher likelihood of experiencing chargebacks, defaults on payments, fraud or other illegal activity, high return volume, and other risks. This is typically true of companies in a high-risk industry. A company may also be considered a high-risk merchant if the business owner has bad personal credit or is a brand-new merchant without a payment processing track record to analyze. These types of merchants often must use a high-risk merchant account to be able accept credit cards and debit payments.

Industries that are considered high-risk can make it difficult for merchants to get through the merchant account approval process. Many traditional payment processing solutions won't work with merchants in these industries. For example, a payment processor like Paypal or Stripe won't offer merchant services to merchants with high-risk accounts.

What Industries and Businesses Are Considered High-Risk Merchants?

Merchants in high-risk industries often find it difficult to obtain merchant accounts from payment processing companies. Banks or other financial institutions may see providing a merchant account to these businesses as a reputational risk. If your business falls in any of these categories, it most likely qualifies as a high-risk business. Don't worry though, there are other payment processing options for those in high-risk industries.

• Adult Products/Industry
• Alcohol
• Auto Warranties
• Bad Credit
• Bail Bonds
• CBD/Hemp
• Credit Monitoring
• Credit Repair
• Computer Software
• Continuity Billing
• Collections
• Cryptocurrency
• Dating
• Debt Collection, Consolidation, or Repayment
• Document Preparation
• E-Commerce
• Electronics
• Entertainment
• Firearms
• Gambling
• High Volume
• Multi-Level Marketing (MLM)
• Nutraceuticals
• Pawn Shops
• Sports
• Subscriptions
• Tech Support
• Timeshare Exit Services
• Tobacco
• Travel
• Vaping

If your business is included in a high-risk category on the list above, you'll most likely need to work with high-risk payment processors for your payment gateway solutions. We'll explain exactly how those work below.

How Do I Get Approved for a High-Risk Merchant Account?

The merchant account application process can be a tedious one, especially for merchants in a high-risk business industry. The merchant service provider has a list of requirements that you'll need to meet for high-risk merchant account approval. This list typically includes showing your TIN, certificate of incorporation and other corporate documents, bank statements, merchant passport and ID, and other financial statements. After this, you'll go through the underwriting process to get a score. This is an intense process that can often take weeks to complete. However, many payment processors are moving to an instant approval system.

With our instant approvals on high-risk accounts, you can get credit card processing solutions faster than ever. Many payment companies are learning that a quicker approval process means satisfied customers.

As a result, merchant account providers are cutting down on the restrictions and streamlining the underwriting process. In turn, when you send in a merchant account application, your file can be reviewed by automated systems who can grant instant approval in the case of high risk accounts.

How Does An Instant Approval Merchant Account Work?

In order to evaluate applications more efficiently, the high-risk merchant account approval process skips a human step and is done through programmatic filters. For example, your merchant application has many details about your type of business, website, and payment history. The automated tool evaluates this information instantly and provides a predetermined outcome based on your data.

Your merchant account will still be reviewed at a higher level but after the approval process. The goal for your payment provider is to get you credit card processing capabilities as soon as possible. Accordingly, an underwriting team will eventually double check all of the information you provided to ensure it matches with your business details.

What Types Of Merchant Accounts Are Instantly Approved?

There are multiple types of merchant accounts that qualify for instant approval, even when working with a high-risk processor. If you meet all of the application requirements, then companies in a high-risk category can get approved. These high-risk businesses include those listed above.

Automatic Approval For Online Merchant Accounts

If your company solely processes online payments, then you're eligible for an automatically approved merchant account. The standards for online businesses and physical retail stores are a bit different when it comes to creating merchant accounts. For one, your address and place of business don't always have to be the same location you operate. In turn, many international companies seek out automatic approvals for online businesses.

As mentioned before, a fast approval doesn't necessarily mean a permanent merchant account. For example, if you share false information on your application and your bank finds out that your name, ownership, location, or industry is incorrect, they can cancel your contract immediately and leave you without the ability to accept payments.

No Credit Check Merchant Account

Beyond international merchants, a common reason merchants look for instant approvals is that they don't want their credit checked. If you applied for a merchant account in the past and got declined because of your credit score, then being approved automatically can help you get up and running fast. However, the standards for the merchant account haven't changed just because the approval time decreased.

Checking your credit is still part of the application process, but it can be evaluated more rapidly. Nonetheless, high-risk merchant account providers take into consideration merchants with bad credit and understand the increased risk involved. Consequently, you should be able to find a payment solution that will work with you to get your account running regardless of whether you have a poor credit score.

Why Choose Zen Payments as Your High-Risk Payment Processing Company?

Although we don't offer high-risk instant approvals at Zen, we make the approval process simple and worry-free. When you work with us, you won't need to stress about making it through the underwriting process.

We have high approval rates and can work with many different business models. Because we have an extensive network of over 15 banks and high-risk processors, we have one of the highest approval rates in the business with a 98% average. Even if the business owner's credit score is low, we'd love to chat! In fact, we often work with people who have credit scores as low as 500.

We also pride ourselves on our competitive rates, offering the lowest rates you'll find in a high-risk processing company. Many high-risk merchant account providers overcharge for payment processing solutions. At Zen Payments, your financial success means everything to us, so we will never overcharge for our payment processing service.

If you're looking for high-risk merchant services, including a high-risk merchant account that can process credit card payments, Zen Payments is the best partner for you!