If you’re running a business in today’s day and age, it is a given that you will have a provision for some form of no contact or online payment. Be it in the form of a credit card or a debit card. When a consumer uses a debit or a credit card, the transaction is not completed by itself. The business cannot process the transaction either. A merchant acquiring bank has to handle the process, facilitating the transaction for the business and consumer. These banks or payment gateways may reject your business on high-risk grounds upon which the business would have to rely on high-risk payment gateways to process their transactions.

However, could it be deemed a high-risk business if your business does not bring in enough profit or is subject to regular chargebacks? High-risk businesses usually possess limited capital and are thus hesitant to invest for the risk of compromising those limited assets. With the proliferation of online markets in this digital era, you should ensure that your business is ready to face any oncoming demand for flexibility.

Finding a merchant account or payment gateway to undertake your transactions thus becomes a daunting task. 

Who needs high-risk payment gateways?

Most payment processors have very high regulations and judicial restrictions when it comes to partnering with a business.  Several factors come into play.

  • Chargebacks – if your business shows many chargebacks or has been involved in fraudulent activities, then you could be labeled as a high-risk business.
  • If your products or services are doubtful such as those that deal in services such as adult entertainment and certain drugs and pharmaceuticals, weapons, and harmful substances, among others.
  • Offshore business operating in the US – If your business has headquarters abroad, but your consumers are in the United States, then you could be seen as high-risk because of potential fraud or relaxed regulations in the country of your headquarters.
  • Low personal credit score – If you are the business owner. This could impact you. A low personal score negatively impacts your business, and specific payment processors might direct you to a high-risk category.
  • Scam wary – If your business is the type that people often associate with scams, then you can just as easily be labeled as a high-risk venture.
  • If you are a new business or a start-up or do not generate enough revenue or capital, you could fall under this category.

Advantages of high-risk payment gateways

Low-risk payment gateways usually charge a high rate of fees to high-risk businesses to partner with them. The screening process also takes a very long time, and in most cases, the application gets rejected. They also run a risk assessment against the business to protect the bank’s assets. The application could be further affected by many reasons, as mentioned above already.

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High-risk gateways have the following advantageous features:

  • Freedom of choice – The gateways offer payments across multiple platforms like mobile devices, in-app purchases, and shopping carts
  • Sell everywhere – Payment gateways allow for payments to occur in online mode and in-person, even supporting EMV as contactless options.
  • Ease of management – You can manage all payment processing activities from a single account merchant and gain access to reports generated in real-time. This reduces the unnecessary hassle and saves you time. 
  • Tokenization – Cardholder data can be reused without actually storing the card holder’s data, thus enabling the consumer to make further transactions without re-entering the card information while keeping your business safe and secure.

Choosing the right payment gateway

Although high-risk gateways generally offer all these services, they aren’t always the most convenient option, depending on your particular business and its geographic location. To find a payment gateway that best suits your business’s requirements, some “soul-searching” is required. It would be good to keep a few things in mind when choosing the right one:

  • Fees – Do check the application fees as well as the fees levied per transaction
  • Location – The gateway countries, transaction time, and fees largely depend on the country’s tax legislation. The location of consumers is also vital to consider and to ensure that the gateway has global coverage.
  • Mobile payments – Mobile payments are the norm these days. Find out whether or not they support mobile payments.
  • The volume of transactions allowed – This would largely depend on your business’s estimated scale of work and the scope of growth.

Additionally, these payment gateways support a wide range of platforms and providers. They also provide the business with unique services depending on the merchant account holder, such as QR code scanning, batch codes, transaction routing, to name a few. Moreover, the gateway also allows you to use its various services in any mode, online or in-person.

The Takeaway

With everything moving into a digital world, from shopping to online classes, business, and wire transfers, access to a convenient mode of transactions is no longer just a luxury but is also a necessity. Many merchant accounts provide several payment gateways. Choosing the safest and most profitable option can be difficult and tedious. Many online service providers may help speed up the process. These gateways have features and services they provide to the consumer as well as the merchant seller. Bear in mind the critical points mentioned when selecting a payment gateway with whom to partner up.

High-risk payment gateways provide the most convenient access to banking and e-commerce solutions for several businesses, whether high risk or low risk. Given its more comprehensive range of accessibility, we believe it will prove itself instrumental in determining the future of online business.


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