If a payment processor has ever denied your business, deemed it “too risky,” or demanded more documentation 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 keep receiving payments and make more money. The right type of merchant account is all you need.
That can be aided by a high-risk merchant account.
In this thorough guide, we’ll go over what a high-risk merchant account is, why you might need one, how it works, and what to do next. The most common high-risk Merchant Category Codes (MCCs) and how to be approved with confidence will also be covered.
What Is a High-Risk Merchant Account?
A high-risk merchant account is a particular kind of payment processing account designed for companies in sectors where chargebacks, fraud, legal problems, or unstable finances are more common.
Unlike traditional merchant accounts, high-risk accounts often come with:
- Higher processing fees
- Rolling reserves, which are short-term holdings of a portion of revenue
- Stricter underwriting and lengthier approval procedures
- Improved tools for managing chargebacks and fraud
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?
Your company may be classified as high risk for a variety of reasons. Usually, a number of factors combine to determine this, including:
- 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.
Therefore, although having a high risk designation may seem concerning, it is merely a classification. It just indicates that you need the proper payment setup, not that your company is less valuable or reliable. Working with an Independent Sales Organization (ISO) can be a wise choice in these situations. ISOs can assist you in obtaining more favorable and flexible merchant account terms because they frequently collaborate with several acquiring banks. Find out more about the advantages of working with an ISO for your company.
Which Industries Are High-Risk for Payment Processing?
Banks and payment processors consider transaction methods, average chargeback rates, and regulatory complexity when assessing risk. Your industry will probably be classified as high-risk if it has a reputation for erratic consumer behavior or stringent regulations.
Due to factors like transaction volume, refund potential, legal complexity, or consumer behavior, some industries are more likely to be categorized as high risk. Let’s look at some sectors that nearly always call for 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 |
Because of the nature of their business models, these industries are subject to greater scrutiny. For instance, most countries have strict laws governing online gambling, and adult content frequently results in content restrictions and higher chargeback rates.
Want a deeper look? Explore our post on Stripe alternatives for high-risk businesses.
And remember, even seemingly uncomplicated industries, such as software platforms or eLearning, may be flagged if they have lengthy refund windows or a high volume of customer complaints.
Common High-Risk MCC Codes and What They Mean
A Merchant Category Code (MCC) will be given to you when you apply for a merchant account. This code lets banks and card networks know what kind of business you run. But not every MCC is made equally.
Certain MCCs automatically indicate elevated risk and call for stricter controls and additional documentation.
A summary of some of the most frequently reported MCCs can be found below. During the application process, these are known to draw additional scrutiny. Knowing them enables you to select the best provider and create the appropriate paperwork:
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?
Let’s discuss how MCCs affect the approval process now that you know what they are.
Processors know to use enhanced due diligence right away when they see specific MCCs on your application. Longer review periods, additional compliance procedures, and more documentation are all consequences of this. MCCs such as 7995, 7841, or 6051 are often subject to:
- Proof of licensing and business registration
- Examining the terms, privacy, and refund policies on your website
- Verification of personal identification and banking
- KYC (know your customer) or AML (anti-money laundering) checks
👉 Learn more in our post on Merchant Category Codes and Your Business.
Remember that compliance is also very important. Verify that your payment procedure complies with PCI security guidelines. Additionally, you should be aware of Payment Gateways if you are developing a checkout.
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 labels of risk hold you back. 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 intended for companies that experience a greater volume of chargebacks or fraud. Higher fees, more stringent approval procedures, and possibly rolling reserves are all features of these accounts. Simpler underwriting and reduced fees make low-risk accounts more accessible.
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.