High Risk Merchants
Why banks might consider you a High Risk Merchant
The exact reason your business is considered a high-risk merchant varies. It changes from one merchant services provider to the next. Common criteria used in determining a high-risk merchant include the following:
High chargeback rate: If your industry or line of business shows a high rate of either chargebacks or fraud, you’ll probably be considered a high-risk merchant. See other businesses considered High Risk.
Offshore businesses in the US: If your company is headquartered overseas, and you sell mainly to US customers, you might be considered as a high-risk merchant.
The questionable legality of products or services: Many people associate this factor with high-risk businesses. Drug paraphernalia or pornography are some of the most obvious examples, but there is a long list of others.
Questionable marketing practices: Some business are associated with the idea of a scam. Do you offer Free Trials which become subscriptions?
Bad personal credit: Your business is the primary focus in classifying high-risk status. However, your personal credit can be part of this equation too.
High average ticket sales: If your business sells high ticket items like furniture or equipment with credit card payments you could also be considered a high-risk merchant.