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Opinion: Why Are High Risk Merchant Accounts Still Relevant in Modern Commerce?


Opinion: Why Are High Risk Merchant Accounts Still Relevant in Modern Commerce?

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When it comes to high-risk merchant accounts, there has been an increase in the category over recent years. There must be clear reasons behind this change in the curve, and there are. To be considered as a high-risk merchant indicates certain qualities that pose as risk factors in the commerce channel, to merchants and for business financial accounts as well. There are lots of industries that fall into this category, but seemingly more and more as time moves forward. Why, then, does the high merchant account exist at all?

Which Industries Most Commonly Fall into This Category?

There are typically dozens of categories to pick from in this area. Everything from travel and tourism to the adult entertainment outlets fall under this scope, and these are two stark contrasts entirely. So, how do two examples of business both merit such a high risk? There are different reasons behind it, of course, some of which interweave and others that stand alone entirely. Whatever the reason, high risk accounts are not going away despite the connotations becoming less and less relevant as time moves ahead. Other businesses you may find in this remit include:

  • CBD and vape shops
  • Betting outlets
  • Gambling sites and chains
  • Nicotine
  • Alcohol
  • Hotel and hospitality
  • Dating sites
  • Subscription model businesses
  • MLM institutions

Why Are These Industries Considered High Risk?

Ultimately, these channels pose a bigger problem for accounts because they carry with them an inherent risk of chargebacks, fraud, illegal money practices and returned payments in all respects. If there is any chance that you represent as financially unstable under any aspect on paper, then you will be likely classed under this branding. Most major industries in the world now seem to fall under this scope, which has led to the need for a reputable high risk merchant account like this one shown here: .

Modern Commerce Trend Factors

Modern commerce has shifted heavily onto a virtual platform. That means consumers go online, and it is harder for companies to mitigate fraud, chargebacks and profit margins. There is no real predictor for how the tide will shift and therefore, lots of industries tend to be given the high-risk status.

  • Credit card fraud is more rife than ever in 2022. Owing primarily to the shift in commerce patterns as mentioned above, hackers and fraudsters have a wider scope than ever before to steal personal details and act nefariously online.
  • Lots of industry paths have paved the way for third-party management of transactions. Travel and tourism in particular see a high subscription to budget sites advertising discounted rates on flights, other forms of travel and hotel accommodation. This had led to an increase in cancellations, fraud and chargebacks.
  • Evolving payment methods such as cryptocurrency and subscription models are changing the game as well. People are more attracted to these routes than in the past, and it is laced with risks.

High risk merchant accounts are here to stay. Modern commerce shapes this in lots of ways, most noticeably in the recent developments in online trading.