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What Factors Qualify a Merchant Account as High Risk?

When it comes to the risk you pose for business accounts and payment processors, there are some that make your business stand out. Here are the ones that could identify your business as a greater risk:

Businesses That Never See the Card

This includes online businesses, home-based businesses, online dating sites, online auctions, and a variety of other businesses run on the world wide web. Even businesses that offer real products but manage payments for products online.

Reputation for Abundant Chargebacks

If you have encountered many chargebacks in the past, you may find that you have been identified as high due to checkout errors, a bad product line, or other possible reasons. You can put the merchant account at risk and need to work a little harder to prove yourself in the future.

Industry, Location and Customer Profile

Some industries pose a greater risk than others. Some are based on the nature of the business, others are based solely on the reputation of the business. For example, stores that offer adult products are likely to be rated as high-risk businesses as well as those dealing with firearms. The same goes for travel services, telemarketers, bail bonds, online auctions, and dating websites.

Other factors that increase the risk

  • Company Finance and Business Account History : The other thing you need to do to avoid being listed as a high risk merchant account in the future is to manage your account wisely today. This means avoid getting an account that offers more services than your business currently needs, and avoid meeting all the requirements of the vendor service provider you are currently working with.
  • The Time You’ve Spent In Business : This has a bigger impact than many business owners realize. Newer businesses often need to prove themselves before receiving preferred rates and status descriptions from payment processors and other vendor service providers. There is a correlation between the time you spent in business with the level of risk you pose.
  • Other High Risk Definitions : High risk businesses aren’t considered as high risk based solely on their industry. In addition to certain sectors, individual businesses can be considered high risk for factors such as weak personal credit; Inclusion in the Terminated Vendor File (TMF or MATCH list) for misuse, non-payment or fraud processing; high dollar value transactions with no business background; high dollar specials; lots of international transactions.

Businesses that are considered high risk have to know who the right payment processors are, and those high risk merchant account providers that are willing to meet your business needs and provide you with stable credit card processing A high risk merchant account is a payment processing account for merchants that are classified in a high risk services or products category by acquiring banks and the credit card brands.

The Payneo Team can get you approved today for low to high-risk merchant accounts for B2B, eCommerce, or Retail at reduced rates and fees.

Rates for High Risk Merchant Accounts

High Risk Merchant Accounts are most of the times subjected to a setup fee.

The higher the risk associated with your industry, the higher the fees and charges for credit card processing.

Various factors define the risk associated to your business like Industry, Location, Processing History, Processing volumes and Clientele. For instance, stores that offer adult products are just as likely to be rated as high risk enterprises as those who deal firearms. The same holds true for travel services, telemarketers, bail bonds businesses, online auctions, and dating websites.

Businesses that are placed in the Terminated Merchant File (TMF), also sometimes called the MATCH list, will also be considered high risk.

Keeping in mind that the actual rates and fees you’ll pay depend on a number of factors, high risk businesses should expect credit card processing fees to start around 3.5% for an established business in a “less risky” high risk category. From there, costs can rise to 10% or more, with the highest rates coming for those in the riskiest industries or businesses using “offshore” merchant service providers.

If you opt for an offshore payment processing solution, there may be a cost associated for new company incorporation in the country where your processing bank is based or setting up a new bank account. Many times the acquiring banks want collaterals or security deposits which may be a percentage of your monthly or yearly processing volumes.

Visa registration costs $500 upfront & $500 to renew every year.

Registration doesn’t apply to MCC 5993. It may also not apply to 5912 and 5122 if your business is accredited by the National Association of Boards of Pharmacy or another Visa-recognized legal regulatory body. Note that Visa does not require registration (and the associated fees) if you run a high-risk business that is deemed high-risk by your processor but is not on Visa’s list.

High Risk MCCs

When you open a seller account, you're assigned a seller category code (MCC) that classifies your business. Many businesses ask if there is a list of high risk MCCs. While there is no single definitive list, each of the high-risk processors will keep their own list of jobs that they consider high-risk. When evaluating processors, you can directly ask if they will support your business type before filling out an application. You don't need to know your current (or expected) MCC before opening a seller account; Your processor will assign this to you.

However, Visa and Mastercard publish MCC lists that they classify as high risk. American Express and Discover do not publish lists but provide other information.


Visa summarizes high risk MCCs in its Rules, subject to change as follows:
  • 5962 (Direct Marketing - Travel Related Editing Services)
  • 5966 (Direct Marketing - Outbound Telemarketing Vendors)
  • 5967 (Direct Marketing - Inbound Telemarketing Vendors)
  • 7995 (Bets including Lottery Tickets, Casino Game Chips, Off-Road Bets and Bets on Racetracks)
  • 5912 (Pharmacies, Pharmacies)
  • 5122 (Drugs, Drug Owners, Drug Sundries)
  • 5993 (Cigar Stores and Stands - for merchants selling cigarettes in a cardless environment)
Visa requires registration for the high risk MCCs mentioned above. Before you can accept Visa cards, your processor will need to register you as a high risk business. Visa charges the processor for registration, but the processor will transfer this cost to you.


Mastercard does not publish a ready-made MCCs list that it sees as high risk. However, the high-risk processor CCBill's website states that Mastercard sees "downloadable, digital product" sales as a high risk to include following MCCs as well:
  • 5967 (Direct Marketing - Inbound Telemarketing Vendors)
  • 7841 (Adult Video Stores)
  • 5967 (Direct Marketing - Inbound Telemarketing Vendors)
  • 7994 (Video Games and Arcade Halls)
  • 7995 (Gambling)
If you choose to acquire both Visa and Mastercard and have an MCC account that requires card brand registration, you will pay $ 1,000 per year to register with both companies. This registration fee is not under your processor's control, and in addition to the per transaction rates and fees, the Processors will review the details of your individual needs and set pricing and conditions for a job on a case-by-case basis.