What are the typical processing fees for a high risk merchant account?

For merchants operating in high-risk industries, securing a payment processor can be a daunting task. A high risk merchant account is categorized as such due to a multitude of factors – from the nature of the business to its target audience, to the company’s financial history. The resulting challenge in finding a compatible payment processor often leads to elevated processing fees.

The fees associated with a high risk merchant account are dependent on various elements such as the payment processor, the type of business, and the level of risk involved. A plethora of fees may apply, including setup fees, monthly fees, transaction fees, chargeback fees, and non-compliance fees.

Setup fees are a one-time expense, incurred when opening a high risk merchant account, that covers the cost of establishing the account, including underwriting, risk assessment, and activation. Monthly fees, on the other hand, are recurring expenses, charged regardless of the number of transactions processed, that cover the cost of maintaining the account, such as customer support and fraud protection.

Transaction fees are fees levied each time a transaction is processed through the high risk merchant account, usually a percentage of the transaction value and subject to variation based on the payment processor and type of transaction. Chargeback fees are fees imposed when a customer disputes a transaction and requests a chargeback, often a flat fee per chargeback, and may be higher for high risk merchants.

Lastly, non-compliance fees are fees charged if a merchant fails to comply with the terms and conditions of their high risk merchant account, potentially due to failure to meet processing volume requirements, violation of the merchant agreement, or fraud.

Despite the possibility of higher processing fees, high risk merchants can find payment processors that offer competitive rates and customizable solutions. Careful consideration and comparison of the fees and services offered by different payment processors is crucial in finding the best fit for your business.