Did you know chargebacks could hit $117 billion by 2023? This shows the big challenges high-risk businesses face. They include adult entertainment, gambling, CBD, and cryptocurrency sectors. These businesses often find it hard to find payment solutions that handle fraud and chargebacks well.
This guide will look at the best payment gateways for high-risk businesses in 2024. We’ll talk about the challenges these industries have and what to think about when picking a payment gateway. Whether you’re in online retail for adult entertainment or a cryptocurrency exchange, you’ll find the top solutions for high-risk payment processing.
Key Takeaways
- Chargebacks are costing businesses as much as $30 billion annually, exceeding the revenue of most Fortune 500 companies.
- High-risk businesses often need a reserve of 5–10% (up to 20%) of their monthly sales for 12–18 months.
- Some payment gateways for high-risk businesses may charge higher fees due to the increased risk they bear.
- Statistically, the chargeback ratio should not exceed 1% of transaction volume or surpass 100 per month, with businesses potentially losing up to $10,000 per month due to chargebacks.
- Reliable and secure payment processing solutions are crucial for businesses in high-risk industries to reduce the risk of fraud and chargebacks.
What Are High-Risk Merchant Accounts?
Not all merchant accounts are the same. High-risk merchant accounts are for businesses that face more chargebacks and fraud risks. They are for industries like adult entertainment, gambling, CBD, and cryptocurrency. These businesses have unique challenges due to their products, rules, or credit history.
Defining High-Risk Industries
High-risk businesses have special payment processing issues. They often deal with high fees, tough rules, and the risk of losing their account. They must follow strict laws and keep up with complex rules to avoid legal problems or losing their account.
Challenges Faced by High-Risk Businesses
- Higher payment processing fees, often 1.5% plus the interchange rate compared to 0.3% for standard businesses
- Potential rolling reserves of up to 10% of every transaction processed
- Chargeback fees ranging from $20 to $100 per incident for businesses with high chargeback ratios
- Volume caps on transactions imposed by some credit card processors
- Limited options for payment processors willing to work with high-risk merchants
- Stringent documentation requirements, such as bank statements and tax returns, to assess risk profile
Dealing with high-risk payment processing is tough. But, with the right payment gateway and understanding the industry’s needs, these businesses can do well and succeed.
Importance of Choosing the Right Payment Gateway
Choosing the right payment gateway is key for high-risk businesses. It ensures secure, reliable, and compliant payment processing. The right gateway can be a game-changer for success in high-risk fields like iGaming.
High-risk businesses, such as those in iGaming, need a gateway that can handle lots of transactions. It must prevent fraud and ensure a smooth experience for customers. Mastercard predicts the global chargeback volume will hit 337 million by the end of the year. This shows how vital a good payment gateway is for managing risks.
For high-risk businesses, security, fraud prevention, and regulatory compliance are top priorities. The right gateway offers strong security, flexible policies, and expertise in handling chargebacks. This helps businesses deal with the challenges of their industry.
“A reliable payment gateway is the backbone of a high-risk business, ensuring secure and compliant transactions that build trust with customers.”
By picking the right payment gateway, high-risk businesses can grow and succeed. They can offer customers a smooth, secure way to pay while following industry rules. This choice is crucial for the success and future of a high-risk business.
Top Payment Gateways for High-Risk Businesses
High-risk businesses have a tough time finding the right payment gateway online. Luckily, there are top solutions made just for them. PaymentCloud and Durango Merchant Services are two great options.
PaymentCloud: Best Overall High-Risk Payment Gateway
PaymentCloud leads in supporting high-risk businesses. It has a high 98% approval rate. It offers many features like software integrations, fraud prevention tools, and a dedicated manager for high-risk merchants.
It works with many high-risk industries, like online gaming, adult entertainment, nutraceuticals, and e-commerce. Its custom solutions and support are perfect for businesses facing high-risk challenges.
Durango Merchant Services: Best for Online and International Sellers
Durango Merchant Services is great for high-risk businesses, especially those online or international. It has its own Durango Cart and Durango Pay gateway. These offer advanced features for businesses worldwide.
It’s an expert in serving e-commerce, travel, and subscription services. This makes it a top choice for merchants with global customers or a varied customer base. Durango offers competitive pricing and a focus on security.
| Payment Gateway | Key Features | Pricing | Suitable Industries |
|---|---|---|---|
| PaymentCloud | 98% approval rate for high-risk merchants Extensive software integrations Robust fraud prevention tools Dedicated account manager | Monthly fees starting at $10-$45 | Online gaming Adult entertainment Nutraceuticals E-commerce |
| Durango Merchant Services | Proprietary Durango Cart and Durango Pay technology Expertise in cross-border and international payments Competitive pricing and focus on security | Monthly fees starting at $9.95 | E-commerce Travel Subscription services |
PaymentCloud and Durango Merchant Services are top picks for high-risk businesses. They offer custom features, good prices, and support for various industries. This includes online gaming, adult entertainment, and e-commerce.
Factors to Consider When Selecting a Payment Gateway
Choosing a payment gateway for your high-risk business is key. You need to look at the pricing and fees closely. High-risk merchants often pay more in transaction rates, monthly fees, and chargeback fees. It’s important to understand these costs.
High-risk businesses should focus on security and fraud protection. Look for payment gateways with strong security features. These include end-to-end encryption, PCI compliance, and tools to prevent fraud. This will help protect your business and customers.
Pricing and Fee Structure
Payment gateways have set-up, monthly, and transaction fees, usually around $0.20. There are also extra costs like registration, payment processing, refund, transfer, batch, and limit fees. The Merchant Discount Rate (MDR) also takes a small part of each transaction.
Some gateways limit the number of transactions you can do each month. They also have holding periods for transactions, which can be from 24 hours to a week. High-risk merchants might face longer wait times.
Security and Fraud Protection
It’s important to integrate the payment gateway into your website correctly. This helps avoid issues that could cause customers to leave. A good payment gateway makes it easy and safe to store customer info for automatic payments.
Payment gateways must meet level-1 PCI DSS standards for security. Having extra fraud and risk detection tools can offer more protection. Look for a gateway that gives you tools to understand customer behavior and improve your business.
Good customer support is key, with 24/7 help, many ways to communicate, a dedicated account manager, and a focus on customers. By thinking about these things, you can pick a payment gateway that fits your business. This ensures your business runs smoothly and customers have a great experience.
Best Payment Gateways for High-Risk Businesses
Running a high-risk business can be tough, but the right payment gateway can change everything. We’ve looked at many top providers and found the best ones for high-risk businesses. These include PaymentCloud, Durango Merchant Services, First Card Payments, SMB Global, and MerchantBroker.
These companies offer great features, good prices, and support just for high-risk merchants. Working with them can make your payment process smoother, safer, and easier. This helps you handle the usual problems of high-risk industries better.
- PaymentCloud: It has many integrations, quick setup, and easy account moves. PaymentCloud is the best overall high-risk payment gateway.
- Durango Merchant Services: It’s one of the oldest providers for high-risk merchants. Durango is great for online and international businesses, helping you grow your business.
- First Card Payments: It has a big network of financial partners and supports many payment types. First Card Payments is the best one-stop shop for high-risk businesses.
- SMB Global: Working with Payline Data, SMB Global offers strong chargeback prevention features and works well with over 175 online shopping carts.
- MerchantBroker: It focuses on the CBD and hemp industries. eMerchantBroker has a 99% payment processing approval rating, perfect for high-risk businesses in these areas.
Whether you have an online store, a physical shop, or work in a high-risk field, these top payment gateways can help. They make payment processing smoother, safer, and open up new growth chances. By working with these trusted providers, you can focus on your business. They’ll take care of the complex payment processing.
Integrating Payment Gateways with Your Business
It’s key to smoothly connect your payment gateway with your business’s online store. This is true whether you’re selling online or taking payments in person. Choosing the right payment gateway is crucial for your high-risk business.
E-commerce Platforms
High-risk businesses need to make sure their payment gateway works with big names like Shopify, WooCommerce, and BigCommerce. This ensures a smooth checkout for customers. It helps them finish their purchases without any problems.
Point-of-Sale Systems
For those taking payments in person, linking the payment gateway with your POS system is a must. High-risk businesses should pick gateways that work with many POS systems. This lets them take payments safely and efficiently.
Authorize.net is a top choice for high-risk businesses. It has strong fraud detection, top security, and high approval rates for transactions. High-risk merchant service providers like Zen Payments also offer help with setting up payments, fighting fraud, and giving customer support.
“Integrating the right payment gateway with our e-commerce platform and POS system was a game-changer for our high-risk business. It not only streamlined our payment processing but also gave us the peace of mind that our transactions were secure and compliant.”
Compliance and Regulations for High-Risk Industries
As a high-risk business owner, you must navigate a complex world of rules to keep your business running smoothly. It’s important to follow industry-specific laws and keep your payment processing secure. This is crucial in sectors like online gambling, adult entertainment, tobacco, fantasy sports, forex, e-cigarettes, and tech support.
High-risk industries often see more chargebacks due to customer unhappiness, fraud, and unclear transactions. To lower these risks, WebPays offers top-notch fraud prevention tools and strong security. This includes encryption, tokenization, and multi-factor authentication.
Following rules like PCI-DSS and GDPR can be tough for high-risk businesses. But working with a compliant payment processor like WebPays ensures you meet the standards. It also keeps your customers’ data safe.
High-risk payment processing can be costly. But WebPays has competitive pricing and clear fees to help you manage costs. They also offer easy integration with different platforms and great customer support. This makes handling compliance and regulations easier for you.
| Compliance and Regulatory Considerations | How WebPays Can Help |
|---|---|
| Elevated chargeback rates and fraud risks | Advanced fraud prevention technology and robust security features |
| Industry-specific regulations (e.g., PCI-DSS, GDPR) | Compliant payment processing solutions and guidance |
| Higher processing fees for high-risk businesses | Competitive pricing structures and transparent fee models |
| Integrating payment processing with existing systems | Seamless integration using flexible API solutions |
Working with a payment gateway that gets the unique needs of high-risk industries helps you grow your business. It also ensures you stay within the law and keep your customers’ data safe.
Customer Support and Merchant Services
For high-risk businesses, great customer support and merchant services are key to doing well. You need a payment gateway that gets the special challenges you face. They should offer help to make handling payments easier.
Search for payment gateways that put customer support first. They should have 24/7 help from experts who quickly solve your problems. Having a dedicated account manager is also great. They give you personal advice and make sure your business gets the focus it needs.
High-risk merchants should also look for payment gateways with a good history in their industry. Dedicated account management for high-risk merchants is crucial. It helps you follow industry rules, handle chargebacks well, and improve how you process payments.
Working with a payment gateway that knows the customer support needs for high-risk businesses and offers specific merchant services for high-risk industries makes payment processing smoother and safer. This lets your business do well in a tough market.
Future Trends in High-Risk Payment Processing
The world of payment processing for high-risk businesses is changing fast. New technologies are set to change the game. We’ll see more secure, efficient, and compliant payment solutions soon.
Cryptocurrency and blockchain-based payment solutions are becoming more popular. In 2020, 28% of American small businesses started accepting cryptocurrency. By May 2022, the U.S. saw around 260,000 Bitcoin transactions daily. Blockchain technology will make credit card processing better by adding more security, cutting costs, and speeding up payments.
There’s also a big push for advanced fraud detection and prevention tools. These use artificial intelligence (AI) and machine learning to spot and stop fraud better. Tokenization technology is also on the rise, replacing credit card info with unique tokens to lower the risk of data breaches.
Mobile payment solutions like Apple Pay and Google Pay are getting more popular. They offer high-risk businesses better security with things like biometric authentication and tokenization. As privacy laws get tougher, high-risk businesses must focus on protecting data and following the rules.
To succeed in the changing world of high-risk payment processing, businesses need to keep up with new trends. They should work with payment processors that offer custom, innovative solutions. By doing so, high-risk businesses can ensure secure, efficient, and compliant transactions. This will improve the customer experience and help them succeed in the long run.
“The future of credit card processing for high-risk businesses will be influenced by advanced technologies like AI, blockchain, and biometrics, enabling secure, efficient, and compliant transactions.”
Conclusion
Choosing the right payment gateway is key for high-risk businesses. It ensures secure, reliable, and compliant payment processing. By knowing the challenges and what to look for, high-risk businesses can pick a payment gateway that fits their needs and helps them succeed.
Durango Merchant Services offers top payment gateway solutions for high-risk businesses. They have advanced fraud prevention tools, stable payment processing, flexible terms, and expert support. Durango makes sure high-risk industries can thrive with secure payment processing. They work well with platforms like BigCommerce, making payments smooth and efficient for businesses and customers.
If you’re in a high-risk industry like CBD, vaping, or online gaming, the right payment gateway is crucial. Working with Durango Merchant Services can help you overcome the challenges of high-risk payment processing. This lets you focus on growing your business with confidence.
FAQ
What are high-risk merchant accounts?
High-risk merchant accounts are for businesses at a higher risk of chargebacks and fraud. They include adult entertainment, gambling, CBD, and cryptocurrency businesses. These are often seen as high-risk due to their products or services and the rules they follow.
What challenges do high-risk businesses face when it comes to payment processing?
High-risk businesses deal with high fees and strict rules. They also face the risk of their accounts being closed or put on hold. They must follow complex rules and stay compliant to avoid legal problems or account closures.
Why is it important to choose the right payment gateway for a high-risk business?
It’s key for high-risk businesses to pick the right payment gateway for secure and compliant payment processing. The right gateway helps manage risks, offers strong security, and works well with the business’s systems.
What are the top payment gateways for high-risk businesses?
The best payment gateways for high-risk businesses include PaymentCloud, Durango Merchant Services, First Card Payments, SMB Global, and MerchantBroker. These offer good features, competitive prices, and support for high-risk merchants.
What factors should high-risk businesses consider when selecting a payment gateway?
High-risk businesses should look at pricing, security, and fraud protection. They should also consider compliance support, customer service, and how well the gateway works with their systems.
How can high-risk businesses ensure their payment gateway is compliant with industry regulations?
Payment gateways should help high-risk businesses follow industry rules and avoid legal issues. Businesses should find providers that know the complex rules for high-risk industries well.
What kind of customer support and merchant services should high-risk businesses look for in a payment gateway provider?
High-risk businesses should want payment gateways with great customer support. This includes 24/7 help, a dedicated account manager, and help with the challenges of high-risk payments.
What are some of the future trends in high-risk payment processing?
The future will bring new things like cryptocurrency and blockchain payments, better fraud tools, and AI to make payments easier and follow rules better.
