Updated May 2024

High-risk merchants are companies that operate in specific verticals that banks consider riskier than normal. As a merchant, it's imperative to have a payment processor that works for your business. Some payment processors only take on low-risk merchants while others build custom accounts for high-risk merchants which are considered to be on the high-risk merchant list.

It's also important to note that merchants outside of a high-risk category may still be labeled high-risk businesses if they fall within one of the following categories:

• The business owner has very poor credit
• The business is new with no previous credit history

If your business is considered a high-risk merchant for any reason, you need to find high-risk merchant services to take care of all of your payment processing needs. Zen Payments has over 15 years of exclusive experience with high-risk merchants, and would love to set up a custom plan for your high-risk business. We pride ourselves on excellent customer service and the lowest customer fees in the industry.

Curious if your company is considered high-risk?

Top 5 High-Risk Business Industries

Merchants in these industries are much more likely to be deemed high-risk. Merchants in these categories are much more likely to be deemed a perceived risk. They need to work with a high-risk payment processor for their merchant services.

1. Nutraceuticals
2. Adult Entertainment
3. Gambling and Fantasy Sports
4. CBD/Cannabis
5. Vaping and E-Cigs

These are the top industries that require a high-risk processing partner, but there are many others. Take a look at the list below for information about other major high-risk industries and why they're qualified as being a high-risk business:

Companies That are on the High-Risk Merchant List

• Adult Industry– Adult businesses are considered high risk because they sell material suited for older audiences. These sites have age-restricted material and share may sell content. There are multiple subcategories of the adult space which all have separate rules and regulations. For example, adult products, toys, books, magazines, streaming, video, paid profile, dating, cruises, clubs, and more.
• Airlines and Booking – Especially in the post-COVID world, canceling flights and changing booking arrangements is the status quo. With airlines switching flights at the last minute to save costs, and countries changing their tourism policies, airlines and booking companies often have significant chargebacks which deem them high risk.
• Bad Credit – Bad credit both as a company and personal credit score can make you high risk. The banks who run your merchant account want to provide payment resources to companies that are well-funded and safe from a financial perspective. The worse your credit, the higher your risk.
• CBD – The CBD has gone through massive changes over the years and as such, they are a mainstream high-risk merchant. With CBD regulations being refined by the Farm Act, merchants have a clear path forward when it comes to how to run a shop within the national standards. CBD merchant providers will share the exact details of how to open an account as a CBD retailer or online store.

• Coaching – Coaching, event speaking, or online self-help instructionals are high risk for two major reasons. First, they face higher chargeback rates due to cancellations or online continuity billing. Second, they may have high-ticket transactions. For example, if someone coaches a seminar and gets paid $5,000 as a one-time payment.
• Coins and Collectibles – Also known as numismatic, coins and collectibles often require a level of authenticity to prove their value. If a customer buys a fake coin or a collectible that's later proven to be a replica, it can cause issues for the merchant and their payment processing capabilities.
• Continuity Billing – This type of billing model occurs automatically after a customer provides their credit card information. They're often billed after a free membership or a trial period expires. As a result, customers forget about the charge and end up asking for refunds or initiating chargebacks
• Credit Monitoring – Looking at other people's credit requires a lens into their personal information. With a prevalence in information security breaches, credit monitoring is now considered a high risk industry.

• Credit Repair – Similarly, credit repair takes on promises or is promoted through coaching and training. Companies in this industry fluctuate in terms of success and longevity.
• Dating – Dating sites are a staple of the internet and combine both chargebacks from unhappy daters and age risk when it comes to liability.
• Debt Collections – Debt collection companies are notorious for trying their hardest to retrieve owed funds. These practices have been legally regulated by The Fair Debt Collection Practices Act (FDCPA), which must be followed or they may face a lawsuit.
• Fantasy Sports – Build your own team and win big. One fantasy football jackpot amounted to $2.5 million. Online gamblers and sports gamers take their team seriously, and adding an element of luck to sports gaming makes these transactions high risk.
• Firearms – Low risk payment processors don't want to have brand association with firearms companies. With all of the political controversy around gun control and mass shootings occurring more frequently, businesses can't risk connecting themselves with firearms transactions.

• Gentleman's Clubs – Night clubs and adult entertainment venues are considered high risk because of the services they offer. Some of them may gain margins on payment processing tools such as cash discounting or dual pricing. This gives them the ability to charge customers an extra fee for using credit cards which ultimately increases profits.
• High Volume – The more revenue you process in high risk verticals, the more you will be analyzed by your payment provider. However, the caveat to this is that as grow and establish your company as a successful steady business, you'll be able to negotiate lower rates and increase the overall limits of your merchant account.
• Marijuana – MMJ and marijuana merchants have been gaining traction every year in the legal landscape. Many states now allow the sale of recreational marijuana while others welcome medicinal consumption. Merchants in this industry are sure to see steady increases in sales and along with them, viability for merchant account options.
• MLM – Also known as multi-level marketing, these companies are high risk due to their payment structure. Depending on the complexity of their payouts, these types of businesses are regulated by different agencies to ensure they are selling useful products rather than capitalizing on payments based on levels and ranking.

• Nutraceuticals – Nutraceutical payment processing is a key industry for high risk merchant account providers. These companies are susceptible to audits that take a deeper look into their products and the claims they make. Many nutra goods are consumables that aren't FDA approved, and because of this as well as unique billing models like continuity billing, they are often considered high risk.
• Pawn Shops – Pawn shops are a pioneer of unique monetary exchanges. At their roots, pawn shops offer money for the temporary possession of an item which can be “pawned off” as security for a money that is lent based on the value. Inherently, this increases the risk in transactions involved with pawn shops.
• Subscription Services – Many consumers have multiple subscriptions running every month. From entertainment streaming platforms and SaaS tools to subscription boxes of your favorite monthly hobby, these businesses get dinged with chargebacks from customers who forget about their subscription or may have been charged extra without knowing it.
• Tech Support – Tech support involves direct access to a PC which can be a risk when it comes to security. Access to personal information or overriding computers with ransomware makes the tech support industry one that is carefully monitored.
• Travel – As mentioned above, travel dates and bookings aren't always guaranteed. A canceled trip or grounded flight can lead to chargebacks and unhappy customers who want to reverse their payments.
• Vape – Flavored vapes are now regulated by federal standards, and in a push to reduce nicotine use in younger people, this industry is seeing heavy regulations in product lines, marketing, and paraphernalia sales.