5 Most Common Issues with Merchant Accounts


Thanks to modern technology, you can buy and sell around the clock now. If you plan to open an online store, you’ll need a merchant account to accept payments. It means setting up a simple and customer-friendly payment tool that will help you increase sales and profits. Let’s take a closer look at how a high-risk merchant account differs from a low-risk one and which problems you may face if your business falls into the first category.

Types of Businesses

At the moment, all goods, services, and brands that distribute them are divided into two main categories: low- and high-risk. Most companies that conduct their activities over the Internet and accept online payments do not pose any threat to their customers and intermediaries in the form of funds losses due to fraudsters. Such businesses, for example, include:


  • Tutoring;
  • SMM;
  • Gardening;
  • Babysitting;
  • Drop-shipping.


The list could be continued, but the bottom line is that, most likely, you will not have any problems with opening a merchant account if you plan to do business in “safe” areas. High-risk industries traditionally include:


  • Sports betting;
  • Forex brokerage;
  • Services and goods for adults;
  • Sale of medicines and food supplements;
  • Booking services;
  • Dating websites.


This list is not final, and each bank and financial institution has its own selection criteria. A high degree of risk does not mean that you carry out any illegal activity; it is just that these areas usually have a higher percentage of dissatisfied customers and the likelihood of chargebacks.

List of Most Common Issues

Opening a high-risk account can be accompanied by several difficulties. Here are five issues you might encounter.

1. High fees

As mentioned, banks are reluctant to work with companies in specific industries. To be on the safe side, they impose additional fees on opening merchant accounts. The higher the degree of risk, the higher the percentage of commission from the payments made. By and large, compared with a standard profile (low-risk), fees can be higher for absolutely everything: for opening an account, its regular maintenance, and a set of additional services.

2. A lot of documentation

If you are going to start a high-risk business, be prepared to provide additional papers about yourself and your actions. Banks and PSPs (payment service providers) make decisions about you only after a thorough analysis of all documentation, website, type of activity, banking history, etc. In addition to information about your business, you should also detail and post your privacy policy and instructions for refunding payments to customers on the site.

3. High probability of fraudulent activities

Unfortunately, in areas such as sports betting, online casinos, the production and sale of 18+ goods, there is a high probability of theft of customers’ data and money. Therefore, each bank, first of all, analyzes whether this or that company will attract unwanted attention due to the services provided. It is understandable since no organization wants to be a frequent target of scammers. However, the money turnover in high-risk areas is so high that now many services develop reliable protection technologies in the interests of such companies.

4. A large number of chargebacks

Dissatisfied customers and, as a result, a large percentage of chargebacks are the main factors that make PSPs and banks wonder whether it is worth agreeing with a particular company. To minimize the number of refunds, you should provide comprehensive information about products and services and organize a reliable delivery system. Moreover, you should have tools to help you calculate chargebacks that are part of a scam.

5. Poor customer support

When looking for a PSP and opening a merchant account, you need to pay additional attention to the quality of customer support offered. The provider should respond quickly and professionally to the client’s inquiries and complaints. If you have any problems with the payment gateway, you need to resolve the issue on time. Otherwise, you can lose customers and get a bad reputation.

Get the Best Solution for Your Business

No matter which degree of risk your business has, you can always find the optimal solution that minimizes all possible unpleasant consequences. Responsible providers offer secure protection against unreliable customers, the opportunity to open multiple accounts and guarantee the safety of all financial information.