Low Rates on High Risk & International Merchant Accounts
Are domestic banks denying your request for an e-commerce or mail order/telephone order (MOTO) merchant account because they believe that your business is too high risk?
Why Do I Need An International or High Risk Merchant Account?
If you live outside the USA, or are engaged in sales of products or services that are considered "high-risk" such as online gambling, nutraceuticals, remote online technical support, e-cigarettes, adult entertainment, or one of may other high risk industries, you will most likely require an high risk merchant account to process your credit card orders.
If your business is located in the USA and has a US Bank account and a signor/guarantor with a US social security number, you may be eligible for a domestic US-based high risk merchant account. However, even many businesses meeting this criteria often need to seek credit card processing with non-US banks simply due to the more stringent restrictions in the US on industries like Gambling, etc.
International Merchant accounts are not intended for processing international orders. Merchants can process international orders with any merchant account as long as the customer has a credit or debit card with the Mastercard or Visa logo.
International merchant accounts are specifically used by businesses located outside the USA and by businesses in the USA when the transactions are considered to be of higher risk so US Banks will not underwrite the transactions.
Why Would My Business Be Considered "High Risk"?
To state it simply, primary concerns for merchant processors include increased possibility of fraud and/or excessive chargebacks. Merchant processors go to great lengths to avoid both of these. CyoGate offers chargeback prevention services and real-time fraud screening that help high risk merchants maintain clean processing histories. Inside the USA, where merchants are issued social security numbers and employer identificaiton numbers, it's easier to locate a merchant in the event of fraud. Since social security numbers are not issued outside of the USA, US banks will typically not underwrite merchant accounts for businesses outside of the USA, so non-US merchants are forced to use a non-US merchant processor.Certain industries such as nutraceuticals, online casinos, adult entertainment, online pharmacy, e-cigarette & vapor stores, technical support, and others are prone to high amounts of chargebacks and disputes, and are by nature considered high risk businesses. Merchants in these industries may also find it necessary to use a non-US or domestic high risk merchant processor where, as part of their business, they deal in transactions that are of higher risk.
Additionally, issues like bad credit history, criminal background, high dollar tickets and very high monthly volumes all present higher levels of risk.
Additional causes for businesses to be considered high risk include high ticket items such as jewelry and rare coins; and also cases where there's a "contingency" sale. This is where someone is paying for a service now that they don't receive until later such as in the travel industry, sporting or event tickets, and even business conferences where people pay in advance and the possibility exists of the event being cancelled.
I'm a New Business - Does That Make Me High Risk?
NO! Just because your a new business or startup does not alone classify you as high risk. There are plenty of solutions for new business merchant accounts that do not require a high risk credit card processor.
OK...So My Business Is High Risk. How Does That Effect Me?
Along with this higher risk comes significantly higher rates on merchant processing services and often with delayed payments and rolling reserve funds. The rolling reserve is a percentage of sales that is retained by the processor in a separate fund that's used to offset the chargebacks. The rolling reserve funds are eventually returned back to the merchant, however, it has a notable impact on cashflow until the cap is reached.CyoGate offers some of the most competitive rates and fastest payments in the industry on International and high risk merchant accounts. While some companies charge as high as a 40% discount rate, CyoGate's rates on International high risk merchant accounts are a fraction of that.
Businesses located within the USA and with a USA bank account, may qualify for a Domestic High Risk Merchant Account which is US credit card processing and has even lower rates and quicker payments than is common among the International High Risk Merchant Accounts.
Even if you're in an extremely high risk industry, such as gun dealers and medical marijuana dispensaries and cannot qualify for a traditional merchant account, or if you have been previously declined for a merchant account, we have Point of Banking and other non-traditional merchant solutions to help you process credit card payments.
Additionally, credit card processors frequently change the industries they classify as "high risk" so, industries once considered low risk can be moved into a high risk category, and industries that were traditionally considered high risk can be moved into a lower risk category. A good example of this is for CBD & Hemp Oil Merchant Accounts, which are still considered high risk by most banks, however, CyoGate has low risk solutions with no reserve and 24-hour funding.
High Risk Merchant Account FAQ
What makes a business "high risk" to a payment processor?
Processors evaluate risk based on several factors: industry type (certain industries have statistically high chargeback or fraud rates), business model (subscription/continuity billing, advance deposits), geographic location (international merchants face more fraud scrutiny), processing history (prior chargebacks or terminated accounts), and business financials (high average ticket, very large monthly volume). See our complete list of high risk industries to check where your business falls.
What is a rolling reserve and when does it apply?
A rolling reserve is a percentage of your gross sales — typically 5–10% — that the processor holds back for a defined period (often 90–180 days) as a security deposit against potential chargebacks or fraud losses. It's common on high risk accounts. The reserve is not lost — funds are returned to you on a rolling basis as the hold period expires. Domestic high risk accounts often carry lower reserve requirements than offshore accounts.
Can I get a domestic high risk merchant account in the US?
Yes, if your business has a US bank account and a signor with a US Social Security Number, you may qualify for a domestic high risk merchant account. Domestic accounts typically have lower rates and faster settlement than offshore accounts. However, some industries (online gambling, certain pharmaceuticals) are restricted domestically regardless and require an offshore processor.
How do high risk processing rates compare to standard rates?
High risk rates are higher than standard merchant accounts due to the elevated chargeback and fraud exposure the processor takes on. Discount rates typically range from 2.5% to 5%+ depending on the industry, volume, and chargeback history. While some providers charge as high as 10–15% for the highest-risk categories, CyoGate's rates are significantly lower. The best way to get an accurate rate is to apply or contact us directly.
What happens if my merchant account is terminated for chargebacks?
A terminated merchant account may result in placement on the MATCH (Member Alert to Control High-Risk Merchants) list, which makes it difficult to obtain a new merchant account for up to 5 years. If you're approaching high chargeback levels, it's critical to address them proactively with chargeback prevention rather than waiting for termination. CyoGate can also work with merchants who have been previously terminated in many cases.