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Understanding the Advantages of a High Risk Merchant Account



Understanding the Advantages of a High Risk Merchant Account

The term high risk merchant account can be really scary if you’re trying to build your business and accept payments online. However, it’s not always what it seems. Many businesses in Thailand have opted for a high risk merchant account versus other types of payment services because of the benefits they provide. In a world where accepting payments from other countries is becoming more common and important, having a merchant account that can provide the needed flexibility is essential.

Some advantages of a high risk merchant account are:

  • Easy setup process
  • Ability to accept multiple types of payments
  • Chargeback protection

Keep reading to find out all the reasons why a high risk merchant account might be the right fit for you.

Who Needs a High Risk Merchant Account?

Some businesses are considered more of a risk to acquirers than others, which is why high risk accounts exist. If your business is considered high risk, it’s possible that a traditional payment processor will not give you a merchant account. Businesses that are often deemed high risk may include multi-level marketing businesses, those with subscriptions, and those with high ticket items.

You may also need one if your business has recently defaulted on a loan, built up a lot of debt, or had a tough financial year. In these instances, the bank is still unwilling to give you a traditional account, so a high risk one is the only one you can get. It can help you get your business moving again while you rebuild your credit.

Merchants that are selling specific products or to certain geographic areas might need the services of a high risk merchant account.  If you are based in Bangkok, but most of your sales are coming from Australia, some payment processors might avoid dealing with large amounts of foreign transactions.

What is a High Risk Merchant Account?

A high risk merchant account is a service from a lender that allows businesses to accept credit card payments online. In today’s marketplace, this is an absolutely essential function for most businesses. The high risk classification refers to the propensity of the business to get hit with chargebacks.

A chargeback is a returned payment to a customer’s credit card. This typically occurs when the customer successfully disputes a charge. Chargebacks can be more common for some businesses than others and are usually due to a combination of the following:

  • Products / services sold
  • Average dollar amount of each sale (high-ticket items are higher risk)
  • Different currencies accepted
  • Average monthly sales
  • Recurring payments or subscription  offerings

Many of these characteristics are common to a lot of businesses, which is why high risk merchant accounts came to be. Lenders with a higher risk tolerance are more likely to approve accounts for businesses such as these. However, the contracts are often very strict and the fees tend to be higher than traditional merchant accounts.

How Does a High Risk Merchant Account Differ?

Some of the key differences in high risk merchant accounts as compared to low risk accounts are as follows:

Higher Volume Caps

Low risk merchant accounts often put a cap on how much you can earn in a given month. They do this because banks equate consistency month over month to financial stability. However, there are tons of businesses that are not designed to have a similar amount of sales each month. With a high risk merchant account, you don’t have to worry about making too much money or selling too much in a given month.

Higher Chargeback Tolerance

A high risk account offers the merchant more flexibility with chargebacks than a low risk merchant. While banks may require a low risk merchant to be at a 1% or lower chargeback ratio, most high risk accounts can go much higher than that. There are additional fees associated with this, but at least you don’t have to worry about your account being terminated due to high chargebacks.

Subscription Services

Subscriptions are becoming more and more prevalent in the marketplace, but can present a pretty big risk to the lender who is sponsoring the merchant account. High risk processors understand this and are willing to work with merchants who accept this type of revenue. This allows your business to run as planned, rather than changing your business model to fit what the lender will allow.

Ability to Do Business Globally

Unlike many traditional accounts, high risk merchant accounts generally let businesses accept payments from multiple countries and accept more than one type of currency. This can be a huge bonus if the majority of your business is conducted online with a high risk payment gateway and outside of Thailand..

How to Get a High Risk Merchant Account

The process for setting up a high risk merchant account is pretty simple. You just find the lender and payment processor  like Allied Payments that you want to use, fill out the application online and provide them with the information they need. Remember that not all processors are created equal and that you need to read the fine print!

If you have an attorney, you will be smart to have them read the fine print of the contract before signing anything. Since high risk accounts tend to be much more rigid with the terms of their contracts, it’s important to know exactly what you’re signing. Be sure that you’re comfortable with the terms of the contract and the fees they are charging.

If you’re not sure where to start, do a search online and make a list of the potential companies.  We recommend visiting each website and looking into the terms and conditions for a high risk account. Do their requirements work for your business? Are the fees reasonable as compared to the other processors on the list? Do they seem to have good customer service in case something goes wrong?

You may also want to engage with the chat bots or set up a consultation to discuss your options with one of their associates. The more information you can gather about each processor before making your choice, the better. It’s more work on the front end, but could save you tons of money and heartache on the back end.


The term “high risk” might sound like a bad thing, but it’s really not. It simply means that your business needs a different type of account in order to take payments online. There are tons of industries and businesses that are considered high risk and it has nothing to do with their credit history or financial stability. The key is to find a high risk merchant account that works for you and your business.

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