December 13, 2021

Self Check: Do You Fall Under A High-Risk Merchant Account?

If you have a high-risk business and a high volume of daily transactions, you probably fall into the high-risk merchant account category. A high-risk merchant account in Canada is similar to any other merchant account.

Every high-risk merchant account and credit card processors need secure payment gateway integrations. It is hard to plug in a sophisticated payment service to your business in some accounts.

Thus, it implies that prominent payment processors in Canada, such as PayPal and Stripe, could freeze your merchant bank account once your consumers start disputing for chargebacks. However, if you’re a merchant selling or looking to receive funds from Canadian clients, you require to know if you fell into the category of high-risk merchant account Canada. Precisely, get organized in a way that won’t get your high-risk merchant bank account frozen or closed.

Our financial experts conducted in-depth research in Canadian high-risk payment processing laws. Thus, our studies found the sophistication of high-risk payment processing businesses. Here we will help you by offering the best information on a high-risk merchant account. Thus, you can secure your high-risk merchant account for Canadian credit card payment processing at acceptable rates. Also, they are obliging with Canadian laws.

In this blog post, we will aid you in self-check whether you fall in the high-risk merchant account category. Moreover, we will also cover the eligibility criteria for a high-risk merchant account and how to get an approved high-risk Canadian merchant account.

What Are High-Risk Merchant Accounts?

If you operate an e-commerce shop or business and wonder, what are high-risk merchant accounts? Thus, you already understand how critical high-risk payment processing is. Popular payment gateways such as Stripe or Square have strict restrictions for high-risk industries. Hence, businesses with regulatory responsibilities or brand conflicts are not according to their Terms and Conditions. The innovations such as kratom, cannabis, Vape, Adult supplies, and businesses with distinct verticals fall into this high-risk classification. Getting a secure payment gateway solution and a high-risk merchant account for your business is painless than you think.

A high-risk merchant account is a fund processing account for industries of high risk to many banks. The high-risk industries are more liable to chargebacks and higher service provider fees. If a company comes with a high possibility of chargebacks, or its record reveals numerous chargebacks and refunds, the bank may impose a rolling fund on your bank account. It’s the amount of money that will enclose the chance of chargebacks or forgery.

In high-risk businesses, numerous aspects can result in cancellations. Hence, it usually ends up with several reimbursements and clients who file chargebacks. Some high-risk ones are betting, forex trading, and adult websites, to name a few. In addition, several other enterprises or businesses are accountable for chargebacks.

Who Can Open A High-Risk Merchant Account?

If your business has enormous daily transactions, it is significant to check whether you fall into a high-risk merchant account. A high-risk merchant account can deliver various benefits such as global coverage, improved profit, multinational currency conversion, business growth, multiple payment modes, security, flexibility, and integrity.

There are so many industries that fall into high-risk merchant accounts. We have curated a list of the most popular types of industries that require high-risk merchant accounts.

  • All Sexually Oriented or Adult Websites
  • Annual Bonds
  • Antique Selling
  • Attorney Referral Services
  • Auctions
  • Automotive Dealers
  • Bankruptcy Attorneys
  • Banned / illegal Goods & Services
  • Prepaid Debit Cards
  • Real Estate
  • Travel Clubs, Services, or Agencies
  • Vitamin And Supplement Sales
  • VoIP Services
  • Weapons

So, if you operate a company in the industries mentioned above and identical, you fall into a high-risk merchant account category. It is required to get a high-risk merchant account to approve credit card payments on your store.

Eligibility/Criteria To Open A High-Risk Merchant Account

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High-risk merchants enhance their approval likelihoods by accentuating the best characteristics of their industry. A cover letter should encompass information, such as the business insight of people in the proposal. Sellers should also communicate anything that makes the company stand out, such as cyber fraud monitoring.

Also, address high trading percentages in a cover letter. Trading volumes influence the risk to the processing business. Indicating a dominant processing record with a great deal of cash moving through your business can boost the possibility of approval.

Ultimately, high-risk sellers should plan to deal with a long fulfillment period. The fulfillment period implies the fraction of time it takes between funding collection and stock delivery. The lengthy the fulfillment period, the greater the chance of chargebacks, and therefore, the riskier the industry. Lastly, custom accounts fluctuate when it comes to chargebacks. If you have to lengthen your fulfillment period, you may encounter client grievances and chargebacks. Not to worry, high-risk merchant accounts have increased payments for these unexpected events.

Self-Check: Factors That Make You/Your Organization Fall Under A High-Risk Merchant Account

One thing that is significant to remember is that not every merchant account service provider has similar standards for registering a business as high risk. What may authorize you as a high-risk merchant with one account provider may not with others. Still, these are some high-risk categories that generally guarantee the selection. If you or your company has one or more of these, you may find many credit card processors consider your industry at high risk and schedule your payments and other regulations.

Factors that make your organization under the category of high-risk merchant account include:

  • Offshore industries in the businesses.
  • International operation of Products or services that are of controversial legitimacy.
  • Questionable sales and marketing exercises (MLM and pyramid marketing)
  • Past of Excessive Chargebacks
  • High Risk of Fraud
  • Bad Personal Credit

With several merchant account service providers, their goals involve minimizing their threats. They do this by being choosy in the dealers they do business with or by evaluating higher fees and other ordinances for those they consider acceptable threats.


If you process credit card transactions, you have most probably heard the term high-risk. Some industry categories are deemed high-risk in the credit card processing enterprise for several distinct reasons. So, business proprietors are required to realize if they are in a high-risk industry. Thus, a high-risk merchant account is essential.

There are companies with a higher likelihood of disputes, so it’s apparent that they come with strict terms and conditions. Still, when you receive funds through a credible high-risk account processor that maintains safety at the forefront, you can rest assured to minimize the chargebacks and conspiracy.

About the author 

Peter Hatch

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