If your business has ever been declined by a payment processor, labelled as “too risky,” or asked for extra documents just to open an account – you’re not alone. Many businesses operate in industries that traditional banks view as high risk. The good news? You can still accept payments and grow your revenue. You just need the right type of merchant account.
That’s where a high-risk merchant account comes in.
In this in-depth guide, we’ll walk you through what a high-risk merchant account is, why you might need one, how it works, and what steps to take next. We’ll also highlight the most common Merchant Category Codes (MCCs) that are considered high risk, and how to get approved with confidence.
What Is a High-Risk Merchant Account?
A high-risk merchant account is a type of payment processing account built for businesses that operate in industries with a higher likelihood of chargebacks, fraud, regulatory issues, or financial instability.
Unlike traditional merchant accounts, high-risk accounts often come with:
- Higher processing fees
- Rolling reserves (where a percentage of revenue is held temporarily)
- Longer approval processes and stricter underwriting
- Enhanced fraud and chargeback management tools
These accounts are offered by specialised high-risk merchant account providers who understand the challenges your business faces.
👉 Want a refresher on how merchant accounts work? Check out our simple guide to merchant accounts.
Did you know?
Businesses with the MCC 7995 (used for gambling services) are automatically flagged as high risk by most payment networks.
Why Is My Business Considered High Risk?
There isn’t one single reason your business might be labelled high risk. It usually comes down to a combination of factors, such as:
- High chargeback rates – common in industries with subscriptions, high-value items, or customer disputes
- Products or services with legal grey areas – like CBD, gambling, or adult content
- Recurring billing models – such as SaaS or memberships, which often see cancellations or disputes
- Selling internationally – especially in countries with higher fraud risk
- Poor credit history or lack of previous processing history
👉 Curious about how to keep chargebacks low? Here’s our guide on how to prevent fraud and chargebacks.
If you’re applying for a merchant account for the first time, this article will help you get prepared: Essential Steps for Smooth Merchant Account Approval.
So, while being labelled high risk might sound like a red flag, it’s actually just a classification. It doesn’t mean your business is less valuable or less trustworthy – it simply means you need the right payment setup. In such cases, partnering with an Independent Sales Organisation (ISO) can be a smart move. ISOs often work with multiple acquiring banks and can help you secure more flexible and favourable merchant account terms. Learn more about how partnering with an ISO can benefit your business.
Which Industries Are High-Risk for Payment Processing?
When evaluating risk, payment processors and banks look at factors like regulatory complexity, average chargeback rates, and transaction methods. If your industry is known for unpredictable customer behaviour or tight regulations, it will likely fall into the high-risk category.
Some industries are more likely to be classified as high risk due to their transaction volume, refund potential, legal complexity, or customer behaviour. Let’s explore a few industries that almost always require a high-risk merchant account:
Industry | Why It’s High Risk |
Gambling & iGaming | MCC 7995 applies; regulated and age-restricted |
Adult Entertainment | Content restrictions; MCC 7841; often high chargebacks |
Crypto & Blockchain | Legal uncertainty and fluctuating asset values |
Forex & Trading Platforms | High-ticket, high-dispute financial transactions |
CBD & Vape Products | Regulatory inconsistencies across jurisdictions |
Online Dating | Subscription billing with high churn |
Travel & Ticketing | Delayed delivery; refund-heavy sector |
Health Supplements | Strict regulations and safety concerns |
These sectors face more scrutiny due to the nature of their business models. For example, online gambling is heavily regulated in most countries, while adult content often triggers content restrictions and increased chargeback rates.
Want a deeper look? Explore our post on Stripe alternatives for high-risk businesses.
And remember, even industries that seem straightforward – like eLearning or software platforms – can be flagged if they have long refund windows or frequent customer disputes.
Common High-Risk MCC Codes and What They Mean
When you apply for a merchant account, you’ll be assigned a Merchant Category Code (MCC). This code identifies your type of business to banks and card networks. However, not all MCCs are created equal.
Some MCCs automatically signal increased risk and require more documentation and tighter controls.
Below, you’ll find a breakdown of some of the most commonly flagged MCCs. These are known to trigger extra scrutiny during the application process. Understanding them helps you prepare the right documents and choose the right provider:
MCC Code | Industry | Why It’s High Risk |
7995 | Gambling Transactions | Subject to strict regulation and card network policies |
7841 | Adult Video Content | Sensitive material; frequent chargebacks |
6211 | Security Brokers & Dealers | Financial compliance risk and dispute potential |
6051 | Crypto / Money Transfer | High volatility; flagged for anti-money laundering compliance |
5967 | Subscription / Continuity Sales | Recurring billing model with cancellation risks |
5962 | Travel & Discount Services | Deferred delivery and refund-heavy industry |
5816 | Digital Goods & Content | High fraud and delivery disputes due to intangible nature |
7273 | Escort / Dating Services | High dispute rates and regulatory challenges |
7012 | Timeshares | Aggressive sales and refund liability |
Understanding which MCC your business falls under gives you a clearer idea of what to expect during the application process. It can also help you prepare the right compliance documents and avoid costly delays.
Did you know?
While your acquirer assigns the MCC, it still affects your approval, fees, and risk profile. A knowledgeable provider ensures you’re properly classified and avoids delays or missteps.
Because of this, it’s essential to work with a provider who understands how MCCs are classified and can ensure you’re properly coded from the start. It’s a small detail that can make a big difference in your overall payment strategy.
How Does MCC Affect Merchant Account Approval?
Now that you understand what MCCs are, let’s talk about how they impact the approval process.
When processors see certain MCCs on your application, they immediately know to apply enhanced due diligence. This means more documentation, more compliance steps, and longer review times. MCCs like 7995, 7841, or 6051 are often subject to:
- Proof of licensing and business registration
- Review of your website’s terms, privacy policy, and refund policy
- Personal ID and banking verification
- AML (anti-money laundering) or KYC (know your customer) checks
👉 Learn more in our post on Merchant Category Codes and Your Business.
Also, don’t forget that compliance plays a big role too. Make sure your payment process aligns with PCI security standards. And if you’re building a checkout, you’ll want to understand Payment Gateways.
Final Thoughts – Do You Need a High-Risk Merchant Account?
If your business operates in a complex or heavily regulated industry, or if you’ve been turned away by traditional processors, a high-risk merchant account is the solution. It allows you to accept payments securely while protecting both your revenue and reputation.
Working with a high-risk merchant account provider like CardCorp gives you:
- Access to a powerful payment gateway
- Support tailored to your industry
- Fast approvals, even for MCC 7995 merchant accounts
- Tools to reduce chargebacks and stay compliant
🛡️ Don’t let risk labels slow you down. Apply or speak to an expert today. We’re here to help your business grow, no matter the industry.
Frequently Asked Questions
What’s the difference between a high-risk and low-risk merchant account?
A high-risk merchant account is designed for businesses that face a higher level of fraud or chargebacks. These accounts have stricter approval processes, higher fees, and may include rolling reserves. Low-risk accounts are easier to obtain, with lower fees and simpler underwriting.
Can I switch from high-risk to low-risk status later?
Yes, it’s possible. If your business maintains a clean processing history and low chargebacks over time, your risk profile may improve. Some providers will reassess and offer more favourable terms after a proven track record.
Are all gambling and crypto businesses automatically high risk?
Yes. These industries fall under high-risk MCCs due to regulatory scrutiny, fraud risk, and card network rules. Even if your business is well-run, you’ll still need a high-risk merchant account to accept payments.
Can startups with no processing history get approved?
Absolutely. Startups can get approved for high-risk merchant accounts by submitting a strong business plan, a functional website, and demonstrating compliance readiness. Working with a specialist provider like CardCorp helps improve your chances.