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Last updated: 15 November 2022

High Risk Merchant Account

What Is a High Risk Merchant Account?

Besides the regular merchant account services there are also merchant services in the UK which are specialised in working with high-risk businesses. Most merchant service providers rank businesses according the risk factors that are related with their industries. Risk can be assessed by using certain criteria which includes aspects such as business credit risk, prospects and trading history, and business industry.

The reason a given business payments might fall under the high risk category is because banks deem them risky due to business nature and the way service or products are delivered.

Risk calculation

Disadvantages of High Risk Merchant Account

In comparison to a standard account, a high risk merchant account provider will have one or several extra less-favourable terms tied to it. For example, the annual transaction and setup fees are generally higher. Also, for increased account security, these providers will apply a longer settlement period, the minimum number of monthly transactions and a rolling reserve.

Industries In the High Risk Merchant Category

Below we have provided a list of business sectors which are most commonly classified as high risk. The list could be much longer if we also included some of the niche markets that are less obvious. In comparison to ‘traditional businesses’ all these listed industries may have difficulties with receiving a merchant account from a mainstream banks.

High risk industry examples:
E-commerceRetailFinancial ServicesGamblingCard Not Present
Subscription servicesOnline retailCollection agenciesOnline casinosContractors
Telemarketing servicesFurniture and home decorStudent loans and scholarships Fantasy sports Online penny auctions 
Tech supportFashion and apparelInsurance brokers Online gambling Web design and development 
Marketing and advertising firmsStorage business owner servicePayday loans Online gaming Business consultants

Risk Assessment Criteria

As mentioned earlier there are specific criteria that need to be met for businesses to be able to have a merchant account. One of them is a good credit score. A bad credit score highlight late or missed loan payments, and is an indication of your trustworthiness of repaying the loan.

In addition to a credit score, banks also base their decision of a company’s eligibility for a merchant account on records of county court judgments (CCJ) or bankruptcies. These records are especially telling and can heavily impact whether a business will be approved for a loan or not.

Merchant Account Providers for High Risk Businesses

Normally mainstream, or so called ‘high street banks’, refuse to provide a merchant account to businesses which operate in high risk sectors. However, the bright side is that there are a lot of high risk merchant account providers in the UK, who offer this service to businesses with potentially bad credit ratings.

Further below, you can see an overview of high risk merchant account suppliers. These companies provide instant approval and do not exclude industries that fall into the high risk category.

CC BillCCnetpayInstabillGS pay
PaysafeIngenicoPayeaseFirst data

Assess If Your Business Could Be Classified as ‘High Risk’

Besides being in a risky industry, there are several other factors to consider. These factors may determine how high risk your company will appear to a merchant account provider. Have these in mind before reaching out to a merchant service provider.

Company stability and longevity

Business’ credit history and financial stability are some of the major factors that prove company reliability and success. The longer your company has survived on the market, the more you can support your credibility to merchant account providers. Normally, such young companies as startups would be labeled as high risk due to unstable cash flows and financial situation.

It is commonly known that the company should be operating for at least a year to be able to provide some track record. Any company that is younger than a year has little chance of receiving a merchant account, and might need to look for a substitute such as Paypal merchant account or an overseas merchant account.

Personal credit rating of owners and other directors

Your own credit rating, as well as other directors in your company, are also considered. The likelihood of being considered high risk increases significantly if some of your principals have a blemished credit record. This can be improved only if personal guarantees can be offered.

Business model

The method of accepting payments in a business is an important and heavily influencing factor in the risk assessment process. Generally payments taken over the phone or online are considered higher risk in comparison to those which are taken directly from a credit card with a cardholder presence during a transaction. Payments which take longer to collect are considered riskier.


As it was mentioned earlier, some industries are considered more high risk than others. This is based on the fact that merchant account providers look at and compare the proportion of cancellations and non-authorised payments in daily business situations. Generally, one of the commonly mentioned examples of a high risk industries is the travel industry. This industry is highly influenced by external factors such as the weather, cancelled flights or travelers changing their plans, which translates to a high rate of returns.


Getting a Merchant Account With Bad Credit Rating

Even if a business does not have a credit score that qualifies them to get a merchant account, it should not stop you from trying. However, be ready to put some effort and research into choosing a merchant account that fits your business needs.

1. Check your credit history

It is hardly unusual to have mistakes in credit reports and these errors can affect your credit rating. Especially small business tax reports, when the company owners are still inexperienced in the proper procedures of submitting their tax forms. So, always double check that your business records are correct, and if not, there are procedures you can undertake to rectify the inaccuracies.

2. Explain

Having many customers is in the best interest of merchant account providers. If you can give a good explanation of the reasons why you have received a bad credit score, and provide a plan for how you will expect to improve your credit score, then a merchant account provider might be more willing to work with you. Most merchant account suppliers are willing to listen and support business owners who learn from their mistakes.

3. Positive future business projections

High risk merchant account providers in the UK will consider your application more favorably if you can provide a detailed business plan. This is necessary in order to show the direction of your company, and to make sure that your financial situation will meet the requirements. A merchant account provider needs to feel that you will fulfill all of your obligations.

4. Give a personal guarantee

It is quite common for a merchant account service provider to request a personal guarantee from you or a member of the business’ top management. This significantly reduces the risk, and shows the level of commitment to the success of your business. In the case of failure, this might lead to losing your home, which definitely raises the stakes of failure.

Compare Best Merchant Account Providers

There are many merchant account providers on the UK market and it is important to find the one that suits your business goals the best. Merchant account providers offer an array of different products in addition to their merchant services, such as mobile card machines, which may also add extra benefit to your business. 

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