Posted by admin on Feb 09, 2011


What is a High Risk Processing?

High risk processing is a term used by acquiring banks to describe accounts that present a greater likelihood of contingent liabilities for the bank.  High risk processing accounts have a statistically greater likelihood of chargebacks, fraud, and financial loss for banks than do standard risk accounts.

Due to the increased liabilities associated with high risk processing, banks carefully underwrite accounts before approval. 

Top 6 Tips for High Risk Merchant Account Approval

Below are the top 6 items underwriters examine to determine whether to approve an account.

None of the following items alone will prevent a business from being approved for high risk processing.  But, companies applying for processing should be aware of these variables. Smart business owners will present a high risk merchant account application that addresses these items

  • How long has the company been in business?  Naturally, a company with business history is perceived as less risky than a start-up company that has no established banking or financial credibility. For this reason, some providers of high risk merchant accounts will not work with companies who have been in business for less than a year.
  • How do the business financial statements look? The most important documents are the P&L and Balance Sheets. Underwriters pay special attention to ratios such as debt-to-equity as well as positive and negative cash flows, funding sources, and how much money a high risk merchant has in the bank.
  •  In what industry is the high risk processing merchant classified? If you know you are in an industry that is classified as high risk, be prepared to show the processes you have in place to prevent fraud and keep chargebacks low.  Many businesses in high risk merchant categories can establish accounts with favorable rates.  The key is to demonstrate that you know how to manage an account
  • When does the high risk processing account bill for products or services? Billing upon delivery carries fewer liabilities than companies that bill in advance. Billing for monthly subscription or recurring payments is a common billing model for high risk merchant.  If you have a recurring billing model, be sure you make it easy for customers to easily cancel the service, which helps keep chargebacks low.
  • Management of the company applying for high risk processing. If your company has a strong management team or board of directors, be sure to submit that information along with the high risk processing application.
  • Online reputation. Underwriters do a search online to check on company reviews and to see if there are many consumer complaints. Before you send in your application, do a quick search yourself. If there are complaints or negative reviews, answer them in a professional manner. Negative reviews alone will not cause an account to be declined. But failure to respond to repeated customer complaints can be perceived negatively and impact your application.


When applying for a high risk merchant account, build a positive relationship with the underwriter.  Good communication helps all business relationships.  

If more information is requested during the underwriting process, provide documents promptly and return all calls quickly.  The quicker the information is received, the faster your account will be approved.

Interested in applying for a high risk merchant account?

Contact today