Why Is Your Ecommerce Business Considered High-Risk

You must be curious to know why your eCommerce business only qualifies for high-risk merchant accounts. The truth is, businesses are different, and regardless of what you’re selling, dealing in eCommerce puts you and your customers at certain risks.

In this short guide, we’ll help you learn why your eCommerce business is considered high-risk and tell you how you can get a merchant account and run your business successfully.

What is a High-Risk Merchant?

A high-risk merchant is anyone who runs a high-risk business. If you have an eCommerce platform, you automatically fall into the high-risk category due to the unpredictable nature of this industry.

You may also be labeled a high-risk merchant simply because you’re starting a new business with little card payment processing history or because you have a poor credit score.

Credit card processing for high-risk merchant accounts is taken pretty seriously by banks, card providers, and merchant service companies. Meaning, that when looking to open an account, you may receive slightly tougher contract terms than standard businesses.

As a high-risk business owner, you may also get rejected a few times when trying to open a merchant account. Nevertheless, stick to reputable merchant service providers and always consider the fees and pricing of the services before signing the contract.

Reasons for E-commerce to be Considered High-Risk

Various factors can contribute to your eCommerce business being labeled high-risk. Here are some of the ones you’ll most likely fall under.

High-Risk Industry

Starting an eCommerce business that’s within a risky industry as a whole may get you red flagged by credit card processors. Some of the most popular high-risk industries include online casinos, tobacco and marijuana products, pharmaceuticals, adult entertainment, and ticketing agencies.

So if you’ve been thinking about securing an E-cig merchant account, go back to the drawing board and ensure it’s a safe and worthy investment.

Excessive Chargebacks

Chargebacks are the other thing all credit card processors fear and they often occur in eCommerce businesses. A chargeback is basically the money refunded back to a customer when they dispute the purchase.

Customers can request a chargeback when they don’t receive the product or when they experience remorse after an impulse purchase. This can cause losses to the payment processors involved and make your business look riskier than others.

Online Frauds

Opening high-risk merchant accounts for your eCommerce business will also prove difficult due to the large number of fraud cases associated with online stores. Criminals can steal shoppers’ personal and financial information and make purchases through your store.

This can bring severe financial harm to you and your customers which ultimately makes it difficult for payment processors to put their complete faith in your business.

Card-Not-Present Transactions

Running an eCommerce platform means accepting card-not-present transactions. Unlike brick-and-mortar stores where customers swipe their cards, in online stores, things are a bit different which brings us back to the case of fraud.

Card-not-present transactions make it easier for data thieves to parade around and make illegal online purchases. This is one of the main reasons why payment processors are not so open to working with eCommerce merchants.

International Payments

If your eCommerce business caters to consumers from abroad, payment processors may label it as risky due to exchange rates, chargebacks, and money laundering concerns.

This is especially true for online casinos and cryptocurrency businesses that are infamous for money laundering and other criminal activities. So if you’ve got your eyes set on an online gambling merchant account, prepare for an in-depth account registration and maintenance process.

How to get a High-Risk Merchant Account?

Qualifying for high-risk merchant accounts won’t be easy. However, we can assure you that all the hard work will pay off in the end. Begin by visiting the website of reputable merchant service providers in your region or country.

Fill in the registration form with your personal, financial, and business information. After registering, your application will be evaluated and if it’s accepted you’ll receive an email or call from the company.

You’ll also be given a contract to sign which will contain all the essential information about your potential account. Read the contract carefully and only sign it if you’re comfortable with the terms.

After signing the contract, your merchant account will be created and you’ll receive further instructions on how you can customize it and start receiving payments.


Don’t get too worried about being labeled a high-risk merchant. There’s something for everyone in this world even for people looking for a good CBD merchant account. So begin building your business and send as many applications as you can.

The right merchant service provider will come your way one day and you’ll enjoy smooth credit card processing with the click of just a few keys.


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