Five Industries that Need High Risk Merchant Accounts

It’s not easy being labeled as a high-risk merchant by your payment processor due to factors that put your business at a higher risk for fraud or chargebacks. 

This could also mean higher fees, stricter rules and more restrictions than the typical business. So, what are the five industries that need high-risk merchant accounts?


32% of American families own a gun and they invest in one to protect their household, do target shooting and for recreation. This is why it’s not surprising that the firearms industry is now worth more than $5.5 billion. 

But while there is good business in firearms, a lot of banks still consider it high risk. Because of several gun laws and just the nature of the business, which can be quite risky.

Adult entertainment

 Although the world has now accepted adult entertainment as a legitimate business. A lot of mainstream banks and financial institutions still shy away from these types of companies mainly due to reputational risk. 

They don’t want to be affiliated with a business that’s selling adult films and employs porn stars. Since this is still a controversial issue for some.


Smoking may be legal in America, but this industry is still considered one of the riskiest by payment processors. Because of its long history with fraud. A lot of tobacco, vape and e-cigarette businesses have very high chargeback rates, not to mention the stricter regulations and taxes now being imposed in this industry.


We all know how high the risks are for businesses selling liquor and hard alcohol. Aside from complying with strict laws, being an alcohol merchant also means that you’re at a higher risk for selling alcohol to underage consumers.

That’s the reason why most traditional financial institutions and banks will easily tag liquor and hard alcohol businesses as high-risk due to the nature of the business itself.


There is a huge demand for nutraceutical products these days. Especially with the pandemic prompting people to live a healthier lifestyle. But nutraceutical companies are still considered high-risk merchants. Since they have high chargeback rates due to false claims and some businesses also don’t have a clear fine print on their free trial programs.

A lot of these nutraceutical companies also don’t have a proper description for their products, and it leads to unfulfilled expectations that could cause some consumers to file for a chargeback.

Although being tagged as a high-risk merchant means that it will take a longer time to find a good payment processor. You might need to pay higher fees, you should never be intimidated by it because you always have the chance to prove that you can be tagged as a regular merchant. 

Always apply the best practices when processing payments, train your team to spot any fraudulent purchases. And make sure that you always put customer satisfaction first. 

This way, you’re not only avoiding high chargeback rates but you’re also building better credibility for your business.




By Admin

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