What is a High-Risk Payment Gateway?

What is a High-Risk Payment Gateway?

What is a High-Risk Payment Gateway?

June 8, 2022

Jun 8, 2022

Tackling the payments situation in high-risk scenarios

The financial world is changing at a fast pace.

New business sectors are coming onto the market and these include several high-risk businesses.

Money laundering, fraud, and cybersecurity threats continue to plague the high-risk sector. This means that payment gateways need to be more secure than ever before.

In this blog post, we shall be providing a detailed overview of many of these industries, their payment requirements and challenges, and what relevant solutions exist.

What is a payment gateway?

A payment gateway is the mechanism that reads and transfers payment information from a customer to a merchant's bank account.

A typical example where a payment gateway is used is in the ecommerce checkout process when customers submit their credit card information to purchase items online.

What is a high-risk merchant account?

A merchant account is an account held with a financial institution in which merchants may receive the money that they earned through sales. For companies operating within high-risk industries, getting merchant accounts is more challenging than it would be for low-risk merchants that want to accept payments online.

Which businesses are considered high risk?

There are several industries that are considered high-risk. They may be considered such due to several types of risk such as reputational risk, risk of money laundering, or perhaps they may make use of a complex business model that isn't favoured by banks.

In the following section, we're going to be a describing a few of these high-risk industries:

Online gaming

This industry has a high number of commercial disputes and legal restrictions because it attracts many players who have an opportunity to commit fraud. Furthermore, online gaming is high risk because it can be used for illegal activities like money laundering, drug trafficking, and tax evasion. As a consequence, it has become increasingly difficult for companies in this industry to open a merchant account or make use of payment services due to the risk involved for financial institutions.

Debt collection

Debt collectors collect money from delinquent accounts on behalf of creditors through phone calls, letters, emails, text messages, etc.

Creditors may include banks that provide credit cards or lines of credit to consumers who then fail to repay their debts promptly; these companies are considered corporate entities rather than individual persons.

Adult entertainment

When cardholders aren’t present to sign for their purchases, merchants have a more challenging time verifying that customers are who they claim to be.

Additionally, due to the nature of adult websites, banks may not want to process payments for businesses that deal with controversial content.

What are the differences between low-risk and high-risk merchant accounts?

The main difference between a high-risk merchant account and a low-risk merchant account is that the former operates in scenarios that are deemed to be extremely risky as outlined above.

Where such a high-risk account is involved, banks tend to be hostile, and such industries are almost completely barred from opening accounts.

The list of merchant account providers for high-risk industries is getting thinner and thinner. So it is imperative to find a reliable payment service provider for these high-risk merchant services.

Top 5 payment challenges of high-risk merchants

The 5 major payment challenges for merchants who are deemed high risk could be identified as follows:

Opening a merchant account at banks or other providers

If banks or payment processors consider your company or the industry you’re in risky, getting a merchant account will be quite a challenge. Moreover, your merchant account can get blocked if you break the conditions, resulting in lost sales.

High processing fees

This is something that cannot be avoided since payment providers charge more for processing high-risk businesses’ transactions.

That’s mainly due to the fact that they will want to recoup the added compliance costs and to make up for the added risk.

A Rolling Reserve has to be maintained

As a high-risk merchant, you have to maintain a rolling reserve. This is when a particular share of your transaction volume (up to 20%, but usually less) gets kept on hold for a specific period and is released and settled afterward.

Chargeback rates are higher in the high-risk sector

High-risk industries statistically have a higher average chargeback rate than others. Moreover, providers may set monthly thresholds.

It is thus recommended that businesses explore chargeback prevention tools and strategies to avoid facing high chargeback fees and tarnishing their reputation.

High-risk businesses are more prone to fraud attacks

Much the same as consumers, online businesses are typical fraudsters' targets. There are a myriad of fraud schemes that are constantly evolving in response to technological solutions aimed at preventing them.

What do you need to obtain a high-risk payment gateway?

First of all you need a high-risk merchant account. For most high-risk accounts, banks will require you to have a high-risk SSL certificate for your site with high-risk encryption.

When setting yourself up as a high-risk merchant, having a high-risk 3D verification system with high-risk customer authentication may also be necessary. In most cases, high-risk credit card processors usually end up charging high rates for processing high-risk transactions.

Important Payment Gateway Features

There are plenty of innovative features in high-risk payment gateways which enhance the potential for high-risk merchant accounts. Here are some of them.

Sell everywhere

Enable users to pay for purchases online, in-store, using self-service and mobile payments.

Freedom of choice

It is important that there is the freedom to choose from the various payment methods in the payment gateway offering for any high-risk business.

Easy management

From a single account, a high-risk merchant may easily manage all of their payment processing activities.

Additionally, high-risk merchants may utilize various services to improve transaction management, including processing payments and generating reports on all of this activity in real-time.


With tokenization, you can reuse cardholder data from previous transactions without having to store or secure it.

As a result, your customers won’t have to enter their information again, and the payment will still be processed immediately. This can be done while keeping your business safe and secure.

Additional core payment gateway solutions for your merchants

There are several other core gateway solutions or alternative payment methods for high-risk merchants out there.

Accept multiple currencies:

Merchants accepting international payments can use the processor to accept USD, CAD, and other major currencies.

Take all major payment types

Risk merchants accepting international payments can also use the payment processor to accept all major payment types, including mobile payments.

Virtual Terminal

Customers may pay for phone and mail purchases using a browser by swiping cards or entering payment information.

Recurring Billing

Removes the stress of creating recurring payments for your vendors.

QR Codes

Customers may quickly create payment links such as QR codes to access all of the benefits of using contactless payments.

Of course, these additional solutions depend on the merchant account provider or the high-risk payment processor.

How FinXP can help

FinXP provides a suite of solutions for high-risk merchants. First and foremost it offers secure credit card payments which are crucial for any high-risk merchant. We also offer other services such as a secure payment gateway and are also a fully certified credit card processor.

Our flagship service payment platform for businesses that are considered high risk is the Omni Channel Payment Gateway. This allows your shop to offer its products online, via mobile, and direct at the point of sale (POS).

What is the Omni Channel Payment Gateway and what are its main strengths?

FinXP's Omni Channel provides a number of features which include access to a considerable 350+ payment methods as well as acceptance of all major credit cards.

The product integrates with leading eCommerce and CRM systems. and has a fraud prevention and risk management system included in the package.

The Omni-Channel Payment Gateway will help your high-risk business to improve conversions and sell more products. It also assists your business in deploying tailored payment pages, inline payments to keep customers on your website.

Other features include one-click checkout, in-app payments, smart transactions, and routing options.

High-risk companies who use the service can also create, test, and deploy payment enhancements in real-time. They may also analyze and optimize the payment platform setup with a unified view of all transactions that include fraud.

FinXP's IBAN4U Account for high-risk merchants

Our IBAN4U is a dedicated Online Payment Account that's perfect for companies who are looking for alternatives if they're shut out by banks. In other words, it's a great fit for high-risk businesses.

The digital account is denominated in Euro and comes with a dedicated IBAN. Through the IBAN account, users can execute SEPA payments, manage sub-accounts, and make mass payouts.

Amongst the features in the IBAN4U account, one may mention fast account activation, secure protection of funds as well as transparent and competitive fees.

If you are a high-risk merchant, get in touch with FinXP, a payment provider that solves the various payment and banking challenges that crop up in high-risk sectors.


When operating a high-risk business, it is essential to have a payments partner that you can trust and rely on. Here at FinXP, we are a one-stop-shop for payment and banking services for high-risk merchants.

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