High-risk merchant account opening guide

Accepting digital payments is an indispensable part of almost any online business. To start doing this, entrepreneurs should find a reliable payment partner to open a merchant account. The procedure often takes time, and in case your project falls into the high-risk category, it gets even more daunting.

Getting proper assistance and instructions will help you ease the task. This article is a cheat sheet for those who own a high-risk business and want to start accepting payments online.

What is a high-risk merchant?

A high-risk merchant is a business with a potentially high fraud level. The reasons for that vary from the nature of businesses to zero credit history. Unfortunately, the latter also ascribes business to the high-risk category. If your company breaks sales records every month, it is a good sign for you, but at the same time, it increases the level of risk. Another factor is sales in high-risk or sanctioned countries. Still, the same industry may have different levels of risk for different payment service providers.

Typical representatives of high-risk merchants

Here are the most popular representatives of high-risk projects:

• online dating;
• telemarketing;
• multilevel marketing;
• software;
• auctions;
• fortune telling, horoscopes;
• subscription-based business;
• products for adults;
• transactions via mobile phones.

In addition, startups and companies with large transaction volumes are also high-risk merchants. However, acquirers will consider each business on a case-by-case basis. Not all of the aforementioned industries will necessarily be considered high risks. Similarly, many other activities not listed above may be considered risky. It all depends on the individual indicators of the financial activity of an individual enterprise.

High-risk businesses characteristics

• Getting on the MATCH or TMF (merchant blacklist) list due to excessive chargebacks.
• Small history of credit card transactions.
• Selling goods or services to customers in countries associated with a high level of fraud, the risk of financial loss.
• Trading and accepting transactions in several foreign currencies.
• Bad or no credit history, difficulties with individual loans, low reputation.
• Average monthly sales exceed $20K.
• The average credit card transaction is over $500.
• Business dependence on seasonality or periodic sales.

How to open a high-risk merchant account: 8-step guide

To get a high-risk merchant account, you need to go through several stages:

Step 1. Define your project needs.

It would be best if you didn’t overpay for services that you do not even use. Since you open a merchant account with a high risk, you will have to pay a higher commission anyway. So, you do not need any extra spending.

Step 2. Monitor available offers thoroughly.

Not everyone will want to open and host an account for a high-risk project. But you will surely have some choice, and it is advisable not to rush to make it as quickly as possible.

Step 3. Check for compliance & permissions.

Make sure the company of your choice has all the resources and permissions to provide services for you. This is especially important for businesses with specific activities and needs.

Step 4. Find out every detail.

Not all companies publish the full necessary information on their websites. Therefore, you will need to communicate with managers and find out the answers to your questions about payments and commissions and how quickly an account will be opened and services will begin to be provided.

Step 4. Submit your application.

This process will not take much time, but be ready to provide detailed information about your online business. After all, by opening an account for your company, your future partner also assumes your high risks and does not want to incur losses. Therefore, they’ll need to learn as much as possible about your company and its activities.

Step 5. Communicate with a security officer.

The purpose of this step is similar to that of the previous one. The company wishes to minimise the possible risks of cooperation with you.

Step 6. Provide additional documents.

On request, these can be permits, licenses, certificates, insurance contracts, etc.

Step 7. Bank check.

After you collect all the information and documents, the account provider will send them to the bank for a check. The terms of it vary from 2 to 10 days.

Step 8. Underwriting.

The application will be sent for underwriting when all the steps have been completed. It means that the account will be opened with a high probability. After the confirmation, you will get access to your account and will be able to accept payments from clients.

It is important to understand that high-risk companies have chances to open a merchant account and conduct business. But the very process can take more time, and the service will cost more.

As a rule, the main obstacle is handling complaints from end customers received by the bank. However, the turnovers in this area are so large that serving the interests of these companies has turned into the whole banking industry. Today, there are dozens of options for opening merchant accounts. Companies can register such an account in the USA, Great Britain, Germany, Russia, Ukraine, and other countries.

How Corefy can help

Corefy provides a full-fledged solution for merchants who are starting an online business or have already launched it but, for some reason, are looking for a high-risk payment gateway. Our payment orchestration platform operates worldwide and offers a wide range of traditional and alternative payment methods, multi-currency processing, and dynamic currency conversion. Our payment experts will readily assist you and answer your questions on the procedure of opening a high-risk merchant account. Do not hesitate to contact us and kickstart your business.