Why High Risk Industries are Avoided by Payment Processors
What Is A High Risk Industry?
High risk industries are sectors of business that banks categorize as riskier due to potential issues with their payment processing. These industries face concerns like high chargeback rates, MATCH listings, or fraud. Banks have unique stipulations for boarding high risk accounts.
High risk industries require merchant accounts that allow for the increased liability banks undertake. The payment processing fees associated with these accounts come at a slight premium, but they are essential for sustainable payment solutions.


Ready to accept payments anytime, anywhere?
What makes a business high risk?
The risk can come from the company’s history or the industry they’re in. High-priced ticket sellers, travel agencies, adult entertainment, online dating websites, medical marijuana practices, subscription boxes, and vape retailers are all high risk industries.
Ultimately, banks and low-risk independent sales organizations (ISOs) avoid associating themselves with these and other high risk business types. This makes payment processing a challenge for so many businesses in various industries.
Especially businesses that have “reputational” risk. The reputational risk could mean the business has had issues in the past. But another way banks view it is by looking at their reputation for associating with an industry. For example, some people may not want to use a bank that supports firearms or CBD products.
How does my processing history affect my merchant account?
Your processing history indicates how reliable and consistent your revenue is over time. These factors and your overall processing volume show banks the risk associated with your business. It also tells them your likelihood of processing future transactions.
Although these high risk industries might be just as valid and have the financial records to prove their viability and profitability, they are still very likely to experience rejection in seeking a payment processor. The same is true for many businesses you might not think would be considered in high risk industries.
Which Industries Have High Business Risk?
Industries with high business risk include – CBD, Vape, Kratom, Adult, Firearms, and more. They face regulatory concerns or age restrictions and a changing legal environment that makes it risky for banks to underwrite. These businesses may have to adjust or remove certain products.
Whether it’s the changing legal landscape or banking compliances, high business risk means your company has to face certain obstacles. Creating an online store within the boundaries of your payment processor’s Terms and Conditions is critical. Although it may seem strict, these stipulations help you maintain the ability to process credit card payments through your store.

List of High Risk Industries
Here is a list of high risk industries. Each has one or a combination of risk levels that qualify their sector. For a complete list of merchants in this category, see our Signature Payments Industries.
- Adult Products
- Adult Videos
- Antique Collecting
- Auto Warranties
- Bad Credit
- Business Consulting
- Coins and Collectables
- Continuity Billing
- Credit Monitoring
- Credit Repair
- Dating Websites
- Debt Collection
- Delta-8
- E-Cigarette
- Fantasy Sports
- Firearms
- Gambling
- Kratom
- Nutraceuticals
- Online Gaming
- Pawn Shops
- Skin Care
- Subscription
- Tobaccos – Cigars & Smoking
- Travel
- Vape

eCommerce with Future Deliverables
Obviously, many e-commerce websites operate on the grounds of future deliverables. While payments can be provided with such relative ease online and with the desired convenience of making purchases from home or your phone, your products or services can be delivered later after receiving payment.
Online dating services and subscription box companies are prime examples of businesses that require a high risk merchant account. While there are lots of secure e-commerce businesses with stellar reputations, these high risk businesses are still prone to excessive chargebacks.
Additionally, if an e-commerce website has a yearly membership service or a billing model that takes payments on a recurring schedule, chargebacks danger increases. In turn, high chargebacks can translate to dropped accounts.
High Risk Industries with Reputational Risk:
Reputational risk is another example component of high risk industries. For example, adult entertainment, CBD oil retailers, and people prone to experience information theft are categorized as high risk due to reputational risk.
And let’s not neglect the medical marijuana business. Although marijuana is legal in some states, traditional payment processors have regulations against it. Many won’t align themselves with this relatively new sector. In turn, companies specializing in medicinal marijuana must find payment processors, like Signature Payments, that specialize in high risk merchant accounts and have experience and expertise in your industry.
When a company presents reputational risks, conventional suppliers are reluctant to forge a business relationship together. It’s not surprising to learn that banks and low-risk independent sales organizations (ISOs) place emphasis on their public image. As a result, they don’t want to risk tarnishing it or negatively influencing how potential or prospective customers see them.
High risk businesses pose too much risk for traditional banks who aren’t willing or equipped to offer high risk merchant accounts.
Businesses Dealing with High Priced Products or Services:
Automobile warranties and companies in the airline and travel booking industries fall under the high risk category as well. Due to the fact their products are expensive purchases. High ticket sales and a higher likelihood of returns (say from a canceled vacation) make reverse transactions more likely.
The higher the expenses paid to any specific industry, the larger the opportunity for chargebacks. Basically, if you’re a dealership or airline that falls on some tough times, the absence of sales will signal poor financial performance to conventional payment processors. As such, they tend to levy hidden and extra fees on you, which helps them deal with the fluctuations in sales.
Though many companies in the high risk category may struggle to find a conventional payment processor, alternative solutions exist. Moreover, you will find payment processors with experience working alongside businesses in this category. SignaturePayments is one of them – we can help set you up with a high risk merchant account and get your business to accept online payments in no time.
Top Payment Gateways
Top Payment GatewaysMay 26, 2023 | Gateway, Payments If you’re running an online business, you know how important it is to have a reliable payment gateway. Your payment gateway is what allows you to accept payments from your customers. There are a lot of different payment gateways out there, so…
Mastering Sales During a Crisis
I have had a number of questions lately from salespeople lately. Some are concerned about the next 30 to 60 days and are looking for direction. Others are using the time to change how they sell. They have been selling face to face, asking for statements,
Finding a Payment Processor for Adult Merchants
All businesses are unique. Every restaurant, grocery store, book shop and retail boutique have their own way of running their business. They have their own image, unique inventory mix, proprietary process, brand, etc. That “thing” that makes them unique.
Modern Risk
Modern RiskMay 24, 2023 | Payments, Risk For years, merchant acquirers have, out of both necessity and routine, utilized fairly streamlined categories and criteria when determining how to assess the risk a new merchant possesses. Whether credit, fraud, or reputational risk, the requirements primarily revolve around business type or MCC…
Square Terminal
Square TerminalMay 22, 2023 | Payments A Square terminal provides a modern interface to process your payments. Square is one of the largest payment processors in the world. As a result, their terminal technology is fast and easy-to-use for merchants and customers alike. It’s likely you’ve used a Square terminal…
Compelling Evidence 3.0, Visa
Compelling Evidence 3.0, VisaMay 22, 2023 | Payments, Signature News Empowering Merchants to Combat Friendly Fraud For online merchants, the worst kind of fraud is the friendly kind. Malicious fraudsters utilizing scaled techniques are comparably easier to catch when you have a…
How To Accept Bitcoin As Payment
How To Accept Bitcoin As PaymentMay 22, 2023 | Payments To accept Bitcoin as payment on your website you’ll need to install a crypto payment gateway. A gateway exchanges the data between the customer’s account and yours. These integrations are found through payment processors that support cryptocurrency exchanges. If you…
Elon Musk’s Twitter Payment Platform
Elon Musk’s Twitter Payment PlatformMay 19, 2023 | Payments Elon Musk has recently made a splash in the payments industry with his new Twitter Payment Platform, which promises users a fast and secure way to transfer money. But is this platform a threat to other payment processors? In this article,…
Accept Crypto Payments On Shopify
Accept Crypto Payments On ShopifyMay 19, 2023 | Payments With a surge in Bitcoin popularity, many eCommerce stores want to accept crypto payments on Shopify. Customers seek new options and checkout, and among them is cryptocurrency. For online stores, this means adapting payment gateways that suit alternative forms of payment. …
How to Accept Crypto Payments
How to Accept Crypto PaymentsMay 17, 2023 | Payments If you want to learn how to accept crypto payments, follow these simple steps. Find a cryptocurrency integration that works with your website There are major solutions like Bitpay or Coinbase that work with major websites If you currently have a…