PayCly Blog

How Does a High-Risk Gateway Assess Merchants?

A high-risk merchant not only has to convince an acquirer for a merchant account, but he also needs to justify his authenticity to a payment gateway. The payment solution companies are on their toes while approving high-risk businesses prone to multiple risks and financial frauds. A merchant should always know how a high-risk gateway assesses and scrutinizes a merchant before providing payment solutions for his business. This blog is all about the factors that play an essential role in the assessment process.

Industry type tells a lot about the level of risk

Many industries are tagged as 'high-risk,' but not all industries have the same level of risk. Some are more prone to business and financial risks, while some are comparatively safer. For example - Forex business is less prone to threats and hacking as compared to online casinos. The first reason is that the forex market is more organized than the gaming merchants.

However, no centralized regulatory body monitors or controls the forex market. But every country provides gatekeeping through its governmental and independent supervisory bodies. Some examples are - the FCA, Financial Conduct Authority in the U.K., Monetary Authority of Singapore, Commodity Futures Trading Commission and the National Futures Association in the U.S., and the Australian Securities & Investment Commission are some of the names you can take. There are regulations and authorities to control casinos, but still, this industry does not enjoy a good image in society.

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People can openly talk about forex marketing and their trading plans at parties and family gatherings. But they are not very vocal about casino investments. Considering all the factors, a payment gateway decides the risk level of an industry merchant. Before approval, a high-risk payment gateway provider has to check whether it has all the networking and infrastructure available to suit a merchant's needs. The solutions required for a casino will never work for a forex merchant. It means the decision will be taken accordingly.

The chargeback rate is a significant decision-maker

Payment solution-providing companies always prefer high-risk businesses that successfully maintain a low chargeback ratio. As we all know that high-risk merchants are always worried about the chargeback rate. It sometimes increases annoyingly despite chasing the target of maintaining the idol chargeback rate. It can be difficult for a merchant to employ a good payment gateway in such a situation. It is imperative to control the incidents of money back.

What is the idol chargeback rate? Typically, the idol rate is 0.9% to 1%, and if a merchant crosses this threshold, he may have to face penalties. However, some payment solution companies serve high-risk merchants with a chargeback rate above the threshold. But these companies first suggest ways to control the ratio, and if the merchant does it successfully, the international payment gateway accepts to provide solutions. The renowned name paycly.com has served many merchants with the chargeback issue.

How to calculate the chargeback rate?

Chargebacks per month

Transactions per month

The threshold of 1% chargeback is achieved when your business has 100 chargebacks on every 10,000 transactions. With this number, any payment gateway can happily get ready to work with you. Another important piece of information is you need to take the ratio to the idol number at least three months before your application to get payment gateway solutions. The same is the case when you apply for a high-risk merchant account.

Examination of business founders and promoters

The individual image of the business owners and promoters always walks with the appearance of a business. A payment solution company will never want to work for a commercial entity owned by people accused of financial fraud or criminal activity. It can adversely affect the image of the payment gateway provider, and it may lose its existing merchant clients.

Whether a business is high-risk or low-risk, the image of its founders, CEO, and other decision-makers always affects the company's goodwill. Payment gateways are highly cautious about it. Let us use an example to help you better relate to this point. Many scandals have taken place in the business world all across the globe.

Example - Do you remember why the famous American company Enron Corporation's share price fell from $90 to less than $1? Yes, it all happened because of the scandal committed by its founder and CEO Kenneth Lay. Enron, a commodities and services company established in Houston, Texas, came to the notice of law due to the scandalous handling of business accounts. The first time, the doubts were raised in the year 2001; within one year, the stock price went down, causing the shareholders to lose $11 billion. Another person Jeffrey Skilling, the company executive, was also accused in 2006, he went to Jain, and later Kenneth Lay died due to a heart attack before receiving a sentence from the court.

As you can read above, It is why the payment gateways are always curious to know whether the company promoters and owners have a clear record or not. Without this study, they will never provide high-risk merchant processing, no matter how high a fee a merchant can offer to the payment gateway. It is all about a fair deal and fair business terms.

Customer reviews on the company website

Payment gateways are always curious to know what your customers think about you. Happy buyers leave positive reviews; however, having several negative reviews about your business is not harmful. Too many complaints in your website comment/review section can make a payment gateway doubt the authenticity of the commercial practices of a business. It is best to work on the comment section of your business website. Give timely responses to complaints, and inform the customers about every new change.

Even the most minor complaint from your customers can be a big problem if expressed by many people or too many times. For example - your website is slow, and the buyers find it difficult to pay quickly. A payment gateway can never ignore this issue because it has much to do with it. After all, unsatisfied customers mean higher chances of chargebacks or losing the ultimate buyers.

Keep a separate team to monitor your website regularly and give special attention to the review section. Updated information about how the buyers feel about your brand can help improve business growth. It is not only a professional but also a moral responsibility.


After reading the points mentioned in this blog, you can work better on the factors that impress the payment gateway providers. However, do not worry; it is not rocket science to convince the payment solution providers if you have a good hold on the business. Yes, it is not a cakewalk to run a high-risk commercial entity, but the tool of knowledge and experience can do all the miracles for a merchant. Ups and downs in business profit are a natural phenomenon, important is to prevent any long-term and potential harm to your company. Long-term higher chargeback ratios, bankruptcy, etc., can extinguish a business from the market. However, a little smartness in management will complete all tasks. ALL THE BEST!