International payment processing becomes more difficult when a business is classified as high risk. The label does not always mean the business is suspicious; it can reflect the industry, chargeback risk, country of incorporation, payment model, or the restrictions of the payment processor.
What makes a merchant account high risk
Payment processors may treat a business as high risk for reasons that are not obvious to the business owner.
One example discussed is a Bulgarian company. Even if the business itself is legitimate, some processors may treat the account as higher risk simply because the company is based in Bulgaria. That can lead to:
- Higher processing rates
- Lower acceptance chances
- More documentation requirements
- Fewer available providers
The transcript also notes that Stripe became available in Bulgaria, but availability in a country does not mean every business in that country will be accepted. A platform may operate in a jurisdiction while still rejecting certain business models or industries.
Card-present vs card-not-present transactions
Card-not-present transactions are considered higher risk than card-present transactions.
A card-present transaction occurs when the customer physically uses the card, such as swiping or inserting it and entering a PIN.
A card-not-present transaction occurs online or remotely. Because the customer and card are not physically present, banks and processors view the fraud and chargeback risk as higher.
However, this alone is not usually what people mean by a “high-risk merchant account.” Most online businesses are card-not-present. High-risk classification usually comes from chargebacks, industry type, business model, or jurisdictional concerns.
Chargeback rate
A high chargeback rate is one of the main reasons a merchant account may be considered high risk.
The transcript describes anything over 1% as high risk. Ideally, a business should keep chargebacks below 0.5% where possible.
Visa and Mastercard have specific criteria for when merchants may be cut off or penalized, including monthly chargeback levels. The transcript does not provide the exact card-network thresholds, but it emphasizes that businesses should optimize operations to stay below 1%.
Reducing chargebacks may require better customer service, clearer billing terms, faster shipping, more transparent subscription rules, better refund handling, and clearer communication with customers.
High-risk industries
Some industries are treated as high risk even before the processor reviews the individual business.
Examples mentioned include:
- Adult
- Gaming
- Crypto-related businesses
- Nutraceuticals
- Trial-and-rebill offers
- Dropshipping
- Peptides
- Pharmaceuticals
- Travel
- CBD
The reason is usually a combination of chargeback risk, fraud risk, delivery risk, regulatory risk, or reputational concern.
Dropshipping is described as mixed rather than automatically impossible, but many processors dislike it because delivery times tend to be worse. Longer delivery times can increase refund requests and chargebacks.
CBD, peptides, pharmaceuticals, gaming, crypto, and adult businesses often need specialist processors rather than mainstream providers.
Low-risk processors may reject high-risk businesses
Mainstream processors usually prefer low-risk merchants.
Examples mentioned include:
- Stripe
- PayPal
- Adyen
- Braintree
These providers often offer relatively attractive rates, but they may reject industries or business models considered high risk.
A business may assume it can use a well-known payment platform, then discover that its sector, location, or model is not accepted.
Documentation burden
Getting a merchant account can involve significant paperwork.
The transcript describes the industry as paperwork-heavy and sometimes outdated. Some banks may still request items such as a void cheque, even when that is not practical or commonly used in modern digital banking.
Applicants should expect to provide substantial documentation and follow the processor’s process, even if the requirements seem inefficient.
The speaker says a separate process is needed for preparing merchant account applications in detail, but the main point is that high-risk processing requires more documentation and more scrutiny than low-risk processing.
Payment gateway restrictions
Merchant account strategy can be limited by the platform used to run the business.
Some platforms support only certain payment gateways. If the business is high risk and the platform supports only low-risk gateways, the merchant may have a problem.
Platforms and tools mentioned include:
- Kajabi
- ClickFunnels
- Shopify
- MemberMouse
- Braintree
- Stripe
- PayPal
- Authorize.net
- NMI
The transcript notes that Shopify may accept only low-risk activity in many cases. MemberMouse was described as supporting only a limited number of gateways, including Braintree, Stripe, PayPal, and Authorize.net.
Authorize.net and NMI are described as more widely accepted gateway options, which may make them useful when trying to work with more specialized merchant accounts.
Before choosing a platform, businesses should check whether it supports gateways compatible with their industry and risk profile.
Higher fees for high-risk processing
High-risk merchant accounts usually cost more.
The transcript compares mainstream rates such as Stripe’s commonly advertised 2.9% + 30 cents per transaction, with variations by region and volume. Examples mentioned include lower rates around 2.4% or 1.9% in some cases, and higher regional rates such as 3.4% + 45 cents in Hong Kong.
For high-risk accounts, rates can be significantly higher. The transcript gives examples of high-risk starting rates around 5% to 5.5%, and says some industries may see rates in the 5% to 8% range.
Rates depend on the industry, history, chargeback profile, licensing, processing volume, and perceived risk.
The transcript also notes that not every high-risk business pays very high rates forever. A well-established, properly licensed gaming company with a strong history may be able to obtain rates closer to low-risk pricing. Some adult-industry providers may also offer lower rates where the business is well run and the risk is manageable.
Pricing is not always fixed
High-risk processors may not quote a simple flat rate.
The transcript says some processors work from a “buy rate” and add a markup. They may look at what the business is already paying and quote slightly below it, rather than offering a transparent fixed price from the start.
This means existing processing history can influence pricing negotiations. A business with a strong history, stable volume, low chargebacks, and existing statements may have more leverage than a new business with no processing record.
Practical planning points
A business seeking international or high-risk payment processing should consider:
- Whether the company jurisdiction affects risk classification
- Whether the industry is considered high risk
- Whether the business model creates chargeback risk
- Whether the chargeback rate is below 1%, and ideally below 0.5%
- Whether delivery times, refund policies, or subscriptions increase disputes
- Whether the chosen platform supports suitable gateways
- Whether mainstream providers such as Stripe or PayPal will accept the business
- Whether Authorize.net or NMI-compatible processors are needed
- Whether the business has prior processing history
- Whether documentation is ready before applying
- Whether higher rates of 5%–8% are commercially workable
The core takeaway is that high-risk merchant accounts require planning around industry, jurisdiction, chargebacks, platform compatibility, gateway support, documentation, and pricing. A business may be legitimate and still be treated as high risk, so payment processing should be considered early rather than after the store or platform is already built.
