Not all businesses are treated equally by banks. Some are labeled high risk because of their industry, transaction model or financial history. In fact, about 90% of online businesses are considered high risk (chargeback.io). If you are one, you need a high-risk merchant account to accept card and ACH payments.
What makes a business high risk
- Industry: adult entertainment, gambling, CBD, supplements and firearms draw regulatory scrutiny.
- Chargeback ratio: exceeding roughly 1% flags or shuts down most standard accounts.
- Large tickets: $5,000 coaching or $3,000 packages raise the stakes for fraud.
- Subscriptions: recurring billing invites cancellations and disputes.
- International reach and new businesses: more fraud exposure and no track record.
Applying and the costs
Expect a deeper review. You will submit a business bank account, EIN, articles of incorporation, processing history and credit details, and approval can take 3 days to 2 weeks. High-risk accounts carry setup fees, monthly fees, transaction rates of 3.5% to 5.5%, and rolling reserves that hold back a share of revenue for 90-180 days against chargebacks.
Managing risk and choosing a provider
Keep chargebacks under 1%, use fraud tools like AVS, CVV and geolocation, send clear billing descriptors, and stay PCI-DSS compliant. Specialist providers include Host Merchant Services, Durango Merchant Services, Soar Payments and PaymentCloud - each with banking partners willing to approve industries others avoid. To cut costs, keep disputes low, negotiate rates and reserves, and shift customers to cheaper ACH where possible.
Where Cashswipe fits
Cashswipe partners with a Los Angeles ISO offering terminals and processing for both low-risk and high-risk businesses. Merchants can also eliminate 80-100% of processing fees with the Cash Discount Program, which passes the cost to the customer legally - and anyone can offer it to earn residual income from every transaction.