PayCly Blog

High-Risk Payment Processors Will Help You Avoid Chargeback’s and Keep Your Business Going Smooth

If you're a business owner in need of payment processing, you're probably aware that some banks and payment processors avoid high-risk industries. Which industries, however, are considered high-risk?

Industries with a high number of charge-backs, a poor credit history, a high-ticket volume, and a high amount of fraud are frequently considered high risk. Payment processing with traditional financial institutions can be difficult, if not impossible, for high-risk businesses.

If you're already in a high-risk industry, there's not much you can do to keep your company from being labelled as such. If your company is currently medium-risk or low-risk, one of the best ways to avoid being labelled as high-risk is to keep your chargeback ratios as low as possible. High chargeback ratios are a major red flag for payment processors.

PayCly specializes in high-risk payment processors, allowing us to provide payment processing services to your high-risk business.

What exactly is a high-risk business?

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High-risk businesses usually meet the following criteria:

  • A variety of currencies are accepted.
  • Because of fraudulent activity, your business industry is considered high-risk.

What documents are required for a merchant account?

If you are applying for a merchant account in the United States with PayCly, you must include the following documents with your application:

  • Driver's license, or government-issued ID
  • 3 months' worth of business bank statements. If your company is new, you must provide three months of your most recent personal bank statements.

Chargebacks and your company

A chargeback occurs when a cardholder disputes a transaction on their account. When this occurs, the bank that issued the credit card will conduct an investigation on behalf of the cardholder. If the bank determines that there was a fraud, the funds are returned to the customer. It is then the merchant's responsibility to demonstrate that the transaction was legal. When the cardholder initiates the dispute, a chargeback fee is assessed. To have a chargeback reversed, the merchant must demonstrate that the transaction was legal (however, the fee will still apply).

Chargebacks are important in determining whether an industry is high-risk because they are frequently indicative of high-fraud activity. As a result, merchant accounts can be easily closed if the risk department believes your company is receiving an excessive number of chargebacks.

Banks typically use chargeback thresholds to determine if a business is receiving an excessive number of chargebacks; these can be based on the number of transactions or overall revenue that your customers may charge back before the merchant account is flagged.

What Is a High-Risk Industry?

If any of the following apply to your company, it may be considered high-risk. And looking for international payment gateway solutions.

Poor Credit: Similar to personal finance, businesses with bad credit (or no/limited credit history) may be classified as high-risk.

Free Trials: If your company offers free trials that lead to paid subscriptions, it may be a high-risk venture.

Subscriptions and other forms of recurring billing are frequently labelled as high-risk by traditional payment processors.

High Fraud or Chargeback Rates in Your Industry: As you might expect, if you enter an industry with higher-than-average fraud or chargeback rates, your company will be labelled as high-risk.

Fees for Merchant Accounts in High-Risk Industries

High-risk businesses are frequently charged higher fees for merchant accounts than lower-risk businesses. When your company is deemed high-risk, many service providers will charge significantly higher transaction fees or even refuse your service entirely.

However, there is good news: high-risk merchant account providers such as PayCly assist businesses in lowering transaction costs and avoiding unnecessarily high merchant account fees. Rates for PayCly start at 2.6 per cent plus $.15 per transaction. You can avoid unnecessary charges and fees by partnering with a reputable merchant account provider.

Payment Processing for High-Risk Industry Companies

PayCly provides secure payment processing solutions for companies in high-risk industries.

Accounts for Merchants

A high-risk merchant account is a payment processing account for businesses that are deemed high-risk by traditional payment processors. Our merchant account provides dependable and affordable payment processing to assist your business in growing. It is simple and convenient to apply for a high-risk merchant account with PayCly.

Gateways for payments

A payment gateway will allow you to securely accept credit and debit card payments, providing your company with numerous new opportunities. By incorporating our quick payment gateway into your website, you'll be able to take advantage of everything eCommerce has to offer while also growing your business.

Chargeback Avoidance

Receive notification as soon as a customer disputes a charge and have the option to issue a refund before the dispute becomes a chargeback. You will receive an email automatically and will have up to three days to respond. You can halt the chargeback process and dramatically reduce your chargeback ratio by issuing the customer a refund and dealing with their issue.


Customers considered high-risk by financial institutions are those who work in a high-risk industry. Other factors, such as industry type, chargeback activity, transaction size, billing model, and credit score, will influence whether a customer is labelled as high risk or not. When a customer is labelled as high-risk, securing payment processing with traditional financial institutions may become more difficult. That's where PayCly comes in. Because of our relationships with payment processors and industry experts, we can provide your business with the merchant account and payment processing services it requires to grow and thrive.