How High Risk Merchants Get More Accounts

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High Risk Merchant Payment Processing

Ecommerce companies classified as high risk merchants get more payment processing power by gaining access to a network of acquiring banks rather than relying on a single financial institution.  Diversification of high risk processing is the secret to maintaining liquidity in your business while guaranteeing you can continue to accept card payments on your site.

The top performing ecommerce products last year included video games, computers, consumer electronics; and software, each of which grew 13% or more in the past year. There’s a big demand for products classified as high risk by acquiring banks.

If you are a company classified as a high risk merchant, obtaining the payment processing required to grow your business is among your greatest challenges.  

Banks and High Risk Processing

A high risk merchant account is essentially a short term line of credit extended by a bank to a business.  As the world-wide economy continues to stagnate, banks are tightening credit.

Less available credit affects payment processing.  Companies are discovering that banks are reluctant to increase credit limits, particularly for high risk merchants.  Yet, additional lines of credit for payment processing are vitally important to accommodate business growth.

Some banks are purging entire high risk processing portfolios in order to avoid losses from contingent liabilities associated with chargebacks and fraudulent transactions.  When this happens, thousands of companies processing with the bank suddenly have to find other accounts.

Strategic Planning for High Risk Merchants

It’s amazing how few companies have a “Plan B” in place for payment processing.  After all, the ability to accept cards on an ecommerce site is crucial for any business.  Yet, many companies don’t examine the potential consequences of having a single high risk merchant account.

Don’t be lulled into a sense of complacency.   Assuming that can continue processing high risk transactions through your bank is like running your business with blinders on your eyes.

Get smart.  Make sure you have multiple banks available for your high risk merchant account processing.

Protect Your High Risk Processing

Consider boarding all your high risk merchant accounts on a single platform.  With one application, you can gain access acquiring banks located throughout the world. Diversifying your payment processing is accomplished through a single plug-in to the high risk gateway.

Because there are so many banks in the network, you get virtually unlimited lines of credits to accommodate high volume merchant accounts, including high risk processing.  The banks in the network “bid” on your business, assuring competitive rates.


Diversification of high risk merchant accounts is simply smart business.

Use a high risk gateway to load balance among accounts & simplify account management. And gain access to high volume payment processing to accommodate your growth. 

 Are you interested in diversifying payment processing to protect your business operations?  

Contact today

Banks Puts Your High Risk Merchant Account at Risk

Amazing and true:  You can lose your merchant account when chargebacks and fraud are caused by another company processing with your bank.

Some companies contract with third parties to manage chargebacks and fight fraud.  This adds expense to payment processing.   But it is a short-sighted solution to protecting your payment processing account.

Ultimately, controlling chargebacks and fraud at the merchant level does little to secure a high risk account.  The real problem in processing payments for online games and digital merchants resides at the acquiring bank level.

Most financial institutions are woefully inadequate in managing chargebacks and fraud throughout the entire portfolio of the bank.  When a bank depends on each merchant to manage chargebacks and fraud, every merchant processing with that bank is at risk.

You may do a great job of managing your high risk merchant account.  But you have no way of knowing if other companies processing with the bank are managing their accounts properly.  And you can bet your bottom dollar that some of them are not.

Problems with Your Bank Affect Your Payment Processing

A problem arises when a merchant or group of merchants at a bank exceed chargeback and fraud ratios.  A single large account that has high chargebacks or fraudulent transactions can endanger the entire payment processing portfolio of the bank.

When a bank is faced with high ratios of chargebacks and fraud, it must rebalance ratios across the portfolio.  At the same time, the bank must remain compliant with the risk/reserve capitalization thresholds required by international banking regulations.

In the last few years, many banks faced with chargebacks and fraud simply purged all high risk merchants from the portfolio.  The banks terminated the accounts with very little notice to the merchants.

Merchants who thought they were safe because they did not have high chargebacks or fraud levels suddenly found themselves out in the cold.

Special Technology Protects Your Payment Processing

An exclusive network of international banks provides the solution for long-term, secure payment processing for online games and digital merchants.  The banks are located throughout the world.

Every bank resides on a single payment processing platform controlled by patented technology.  Sophisticated algorithms monitor and track all transactions and are checked against a myriad of international databases.   As a result, merchants using the banking network have extraordinary low chargebacks and negligible rates of fraud.

The banks are keen to process for high volume online games and digital merchants because the technology is proven to slash chargebacks and fraud.  You get long-term secure banking relationships and worry-free payment processing.

The banks in the network “bid” on your account which means rates are aggressively competitive.  Additionally, accounts can be setup in multiple jurisdictions allowing merchants to take advantage of lower “in country” processing rates.

Online Games High Risk Merchant Accounts

Online games are big business.  This year, revenue from online games is projected to be $10–12 billion worldwide, according to DFC Intelligence.   MMOG, casual game publishers, and companies with games in social networks need safe and secure ways to accept payments from players.

Online games are considered high risk merchant accounts because of the high number of chargebacks digital content businesses receive.  Some experts estimate high risk industries such as online games, lose up to 10% of revenues due to chargebacks alone.

Companies selling games, movies, music, software, and virtual goods are especially susceptible to “friendly fraud”.  Up to 70% of chargebacks initiated against digital merchants are considered friendly fraud.

Friendly fraud occurs when a consumer actually receives the goods or services but claims non-receipt. This is easy to do in a virtual goods situation because there is no physical product.

Consumers are savvy about how to chargeback digital items.   Many consumers justify the chargebacks saying the merchant has no “real cost” for the product.

In addition to friendly fraud, online games and other digital merchants are often targeted by cybercriminals because the average ticket is low.  By running a small transaction on a stolen card, a criminal can determine if the theft has been reported and if there are available funds on the card.

Chargebacks and fraud cause more than lost revenues.  The long-term danger of chargebacks and fraud is the loss of merchant processing due to excessive chargebacks and fraud at the acquiring bank level.


Online games and businesses selling digital products are considered high risk by banks. Yet, you can still readily obtain payment processing for your digital business. Along with the chargeback & fraud protection tools necessary to keep your high risk processing safe & secure.

Are you an online game or digital merchant ready to explore payment processing solutions?

Contact today


Protect Your Payment Processing

Yesterday, we received a call from a business with a high risk merchant account that was processing $3 million a month with a bank.  The merchant was in a panic.  He had just received a letter from his bank notifying him that in 30 days the bank would no longer process his payments.  He needed to find another account.  Fast.

The merchant was completely stunned.   The business had been processing with the bank for over two years.  Chargebacks and fraud were low because the merchant knew how to properly manage a high risk merchant account.  There had never been a problem with the bank nor any indication that anything was amiss.

It’s Not Unusual

We often receive calls like this.  In the last few years, there have been many banks which suddenly cut off high risk processing for high volume merchant accounts.

You may have experienced a similar situation or know of others who have.  If you have a high volume merchant account and process with banks commonly used for high risk processing, it’s not a matter of if it will happen to you; it’s a matter of when.

However, if you are smart, you can prevent this nightmare from happening to you.

What Causes the Problem?

It’s sad and true that the banks commonly used by high risk accounts do not know how to manage payment processing risk.  These banks depend on merchants to keep chargebacks and fraud within acceptable ratios.  At the same time, the banks maintain a balancing act, trying to remain compliant with risk / reserve guidelines required by international banking regulations.

A single bad merchant that processes with a bank can put an entire high risk processing portfolio at risk.  A large merchant with high chargebacks and fraudulent transactions negatively skews the banking portfolio and creates unacceptable levels of risk for the bank.

When chargebacks and fraud spike, many banks will simply purge the portfolio of high risk accounts.  It doesn’t matter if you have perfect processing history with the bank.  The good accounts are on the chopping block, along with the irresponsible merchants who caused the problem.

This is exactly what happened to the merchant who called us.

How to Protect Your Payment Processing

Diversification of payment processing is crucial for high volume merchants.  These days, relying on a single bank for your high volume merchant accounts is simply too risky.

Establishing more than one account is simply smart business. Load balance all accounts on a high risk gateway. Manage all accounts through a single login.

Some companies establish more than one high risk merchant account with different acquiring banks in the US. other businesses use both domestic and international merchant accounts to mitigate processing risk.

Then, you don’t have to worry about rouge merchants bringing down the bank, and your account along with it.  And you’ll always have the payment processing capacity to operate & grow your business. 

A Happy Ending

What happened to the merchant who called us in a panic?   We’re happy to report that this merchant had another account established within a week.

The merchant received bids for his payment processing from several banks in the network.  The rates were extremely aggressive because the banks wanted the business.  The merchant decided to spread his processing between two banks.

The merchant has the ability to diversify processing further as his payment processing volumes grow and his market continues to expand.  All of the banks in the network use the same gateway so adding accounts is simple.

The merchant is resting easy. And back to running his business, secure in the knowledge that his processing is safe.


Diversification of high risk and high volume merchant accounts is a prudent payment processing strategy. Having multiple merchant accounts ensures you’ll be able to continue to accept payments from your customers.  Protecting your cash flow & keeping your business safe.

Get have the processing capacity you need to operate & grow your business.

Are you a high volume merchant that wants to protect your business by diversifying your payment processing accounts?

Contact today.