8 Businesses That Could Be Considered High-Risk

High-risk merchant accounts

In order to have a successful business, you’ll need to be able to process credit cards. Unfortunately, many businesses are labeled as high risk, depending on a number of factors. This doesn’t mean that you won’t be able to accept card payments, however. High-risk merchant accounts allow businesses considered high risk to accept credit cards and keep their business running smoothly.

8 High-Risk Businesses

What Makes a Business High Risk?

A business may be considered high risk if:

  1. It operates within a high-risk industry
  2. Risk of financial failure exists

Either condition may apply for you to be labeled as a high-risk business for credit card processors. The first addresses safety and health concerns, while the second addresses your business’ reliability and continued profitability. Learn more about high risk credit card processing.

Merchant service providers need to make sure that they’ll be able to make money off of each transaction, something that can’t happen if your business goes under.

High-Risk Business Factors 

Banks and merchant service providers will consider your business high-risk because of excessive chargebacks, refunds and returns, credit card fraud, and more. Banks will also view you as high-risk if you have a history of bad credit, like paying bills late or if you don’t provide collateral for loans.

Businesses That Are Considered High Risk 

While there are a number of factors that go into consideration, there are certain industries and businesses that will automatically be labeled as high-risk. These include:


Online businesses are considered high risk because of the number of excessive chargebacks they receive. Customers may not remember placing an order or signing up for a subscription and will call their credit card companies to get their money back. They also run the risk of customers not being happy with the end product and asking for a refund.

This is a red flag for banks because it signals them that you can’t be trusted to maintain sales. In the end, it actually winds up costing everyone money.

Adult-Oriented Businesses

Adult entertainment merchants can be denied by banks even if they abide by the strict rules and regulations of the industry. Banks consider all businesses that process card-not-present transactions high risk because cardholders aren’t present to sign for their purchases, making verification difficult. Banks may also not want to process credit card payments for merchants who deal with controversial content.


Tobacco is an example of a health-related condition why banks may not want to work with businesses in the industry. The most significant reason that tobacco merchants have problems obtaining merchant accounts through banks is that they are vulnerable to excessive chargebacks.

The laws that regulate this industry are pretty loose, which means that banks are wary about operating with companies who may break the law.


Banks and payment processors typically stay away from gambling businesses that need merchant accounts because of the potential conflicting laws and reputation for high chargebacks from remorse players and fraud.

Casinos are typically considered high-risk because of the legal obstacles that no bank wants to touch. Meanwhile, online gambling has a number of challenges because these businesses are vulnerable to fraud.

Travel and Hospitality

The travel industry is booming. However, processing credit and debit transactions carry risks that banks may consider high-risk. There is typically a high risk of chargebacks, disputes, and fraud.

A customer might book a flight or hotel room months in advance, but end up cancelling their trip for some unknown reason. Due to the protections of the customer, all a customer has to tell their bank is that they are unhappy with the transaction and file a chargeback.


Software as a service (SaaS) is typically billed as a subscription, which means this type of business carries risk. These businesses process a number of transactions simultaneously, which is a red flag to many banks. Not to mention, subscription billing alone is vulnerable to excessive chargebacks.

CBD Products

While CBD is legal under the 2018 Hemp Bill, many banks and merchant account service providers won’t work with your business if you sell hemp products. This could simply be because the legality of the products you sell is too new, and banks haven’t yet caught up with the law.

It could also be because legality is subject to change, which means that your business is a huge risk for banks to work with.


The nutritional supplement industry is regarded as high-risk because it’s strictly regulated by the government. It’s also subject to excessive chargebacks by users who may change their mind about using the supplements after a number of months. With the chargeback statistics and legal framework in place, many banks won’t work with you.

Your nutritional supplement business must be in full compliance with all of the local, state, and federal regulations in place. It’s like passing thread through the eyes of several needles, which can make banks wary. Rather than keep up with changing laws, they’d rather protect themselves than give you a merchant account.

Is Your Business High-Risk?

While you may not be able to avoid being labeled as high risk, one thing you can do is avoid chargebacks whenever possible. A chargeback is a forced credit card refund that’s done by the cardholder, or customer’s, issuing bank. When a chargeback happens, your business loses out on the profit from the sale, and you’ll lose the merchandise that has been shipping to the customer.

You’ll also be responsible for a chargeback fee, which is a penalty for you. If you obtain a high number of chargebacks, you’re in danger of losing your processing agreement, which means you won’t be able to process any credit card transactions.

It’s very possible for a business to lose their merchant account due to excessive chargebacks if you’re not careful. This will automatically put you in the high-risk business category and will limit the services you can obtain in the future.

This is not a complete list of all of the businesses labeled as high-risk. If you believe your business fits this description and could be considered high-risk, contact us today about getting a cbd merchant account.

We Can Get You Approved!

Having trouble getting approved for your high risk merchant account? Did you know HighRiskPay approves 99% of all applicants!