Posted by admin on May 01, 2011


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.