5 things that all high-risk businesses need to know

Has your business been deemed high-risk? Do you have concerns about what it means for your future? Here are the 5 main things that every high-risk business should know before they make their next steps.

Understanding what high-risk actually means

To put it simply, a high-risk business venture is labeled as such due to the amount of risk involved to the financial institutions that are integral to any transaction between a business and a potential buyer.

So it stands to reason that any business which has a large volume of high financial transactions, is an unproven business entity, or has the potential to be subject to fraud, may be deemed as a high-risk one.

Disputed transactions, monthly subscription services, and companies that ship large products with long delivery times are also considered high-risk.

What are the obstacles associated with being a high-risk business?

Whether you’re a new business with a lack of credit card processing history, or a specialist hemp business that’s looking to find the right CBD merchant account for their everyday processing needs, there are many obstacles that a high-risk business can encounter.

Generally speaking, if you work within a risky industry, the chances of obtaining a standard account become more difficult. And high-risk companies may have a much shorter timeframe in which to solve chargeback issues.

However, in both of these cases, high-risk merchant accounts are potentially available to assist with this and monitor these problems.

Are you in the red zone or grey zone?

High-risk businesses are placed into two categories – the red zone and the grey zone.

Businesses in the grey zone are subject to more scrutiny in terms of your business history. Younger upstarts in the grey zone may find it extremely difficult to find a payments provider,

whereas grey-zoned companies with sound financial histories should still be able to find a provider.

Red zone businesses may have not adhered to regulations in strictly monitored industries, or conduct a lot of business with high-risk chargeback businesses around the world. You may even simply be a travel company that’s deemed to be a potential hotbed for fraud or chargebacks.

Chargebacks are a part of any business

On the subject of chargebacks, it may seem disheartening to be considered high-risk due to something like this. But try to remember that chargebacks are part of just about every modern business and that the large volume of chargebacks your industry incurs is in no way a comment on you as an individual or your specific business.

It’s inevitable that people are going to sometimes question or attempt to rescind charges that they don’t agree with. But it’s also important to remember that you’ll need to aim for a chargeback ratio of 1% in order to avoid further penalties and additions to further high-risk lists.

Finding the right merchant is key

Finding the right Merchants Services company to take care of these needs is the key to a much smoother business process and prosperous future, regardless of the industry you’re operating within.

Be sure to work with an experienced company that understands your specific needs, and you’ll be able to aim your focus on business success, instead of unnecessary worries and stress.


Dee is a well-respected business journalist with a deep understanding of global financial markets and a talent for uncovering the stories behind the numbers. With over 20 years of experience covering the business beat, Dee is known for his in-depth reporting and analysis of industry trends, as well as his ability to make complex financial concepts understandable to a wide audience.