Shopify doesn’t offer high risk payment processing directly, but it does integrate with third-party companies that can provide you the solutions you need. If you’re a high risk company, you require a custom merchant account to sell goods or services on Shopify.
The best high risk Shopify merchant account provider offers low rates, fast integrations, and helpful customer support. If you’re just starting a new store or adding new items to an existing store, be sure to check the rules and regulations that go along with your account. Your current payment processor may not have the ability to work with your Shopify ecommerce store.
Shopify has an extensive agreement when it comes to their merchant account legalities. You can learn about the specifics when it comes to online payment processing on their Terms and Conditions Page. Moreover, they list Prohibited Businesses explicitly. These entail multiple industries, and the ones they mention are not exhaustive.
Shopify Payments is exclusively a low risk payment processor. This means they only work with select types of businesses. High risk businesses have to seek out alternative services in order to accept credit card payments. Depending on the industry you’re in, there are different qualifications you have to meet to apply for a merchant account.
For example, if Shopify drops your payment processing because you have an adult site, then you’ll have to contact a payment processor who works directly with that vertical. There are many kinds of adult sites from streaming and video to books and toys, and every business type has their own MCC code and regulations.
A high risk gateway on Shopify is a tool that connects directly to your merchant account. To set it up you’ll have to find a gateway company that integrates within your store. The good news is that many times your high risk account provider already has one that they can help you set up.
Once you find one, the setup process is as simple as uploading code into your Shopify page. Depending on the gateway, some code works better than others. If you have any installation issues, be sure to contact support. Oftentimes, they have teams that are dedicated to the tech side of their payment products.
There are a number of reasons your merchant account can be considered high risk. Among them include – higher levels of chargebacks, lower credit scores, and regulated industries.
Chargeback Rates – Your chargeback rate is determined by the number of chargebacks customers request from their bank. Most banks don’t want to see your rates exceed 1% because it causes added work on their end. In addition, high chargeback rates affect your bottom line. When a chargeback occurs, the money is taken directly from your merchant account.
Refunds can also hurt your company and high refund rates are seen as a precursor to chargebacks. If you notice many people returning your products, be sure to create a process where you can monitor what’s causing those issues and prevent them from occurring.
Credit Scores – If you have a low credit score and want to start a business, you may face higher reserve rates on your account. This is because your merchant account provider wants to hedge risk when it comes to opening an account for your business operation. On the plus side, many providers will give you the processing solution you need if your credit score is within a reasonable range.
Regulated Industries – As mentioned above there is a long list of regulated industries such as CBD, Adult, Firearms and more. A good rule of thumb is that if you sell products that have an age requirement or could be considered harmful to consumers, you are probably in a high risk industry and need a Shopify merchant account from an established provider.