Effective Risk Management in High-Risk Payment Processing

Thinking about high-risk payment processing?

You’ve heard the horror stories. High-risk chargebacks through the roof. Fraudsters at every corner. Payments freezing up out of nowhere.

Risk management is the name of the game.

And it’s no cakewalk. If you don’t get it right, your business could be toast.

But it doesn’t have to be that way.

The best high-risk businesses are crushing it right now because they know how to manage risk properly in high-risk payment processing.

This is the real deal information on high-risk risk management. What you need to know. What works. What doesn’t.

Let’s get into it.

Table of Contents

What’s in this for you

Why do high-risk businesses have more risk management challenges
Top 3 high-risk merchant account providers
Risk management tactics that actually work
How to protect your business from chargebacks

Why do high-risk businesses have more risk management challenges

High-risk payment processing isn’t some made up term. The US have a list of accepted high-risk business categories. High-risk business payment processing.

These are typically merchants who fall into high risk categories from financial institutions and processing providers

This includes merchant types in categories like travel, subscription services, CBD oil, adult industry, online gaming, pharmaceuticals, and more. Many of these industries sell popular goods and have high-risk processing options.

The problem is these merchants are seen as riskier to card networks and payment processors.

What’s going on with that?

According to AFP research, 79% of organisations were victims of payment fraud in 2024. This is a significant number that keeps climbing year after year.

In simple terms, this means a significant amount of businesses are affected by fraudulent payments.

In most cases, high-risk businesses are presented with even more risk management challenges like:

Higher fees. Processing fees for high-risk accounts can range from 3.5% to 5% per transaction. This is significantly higher than the average 3.49% faced by low-risk businesses.
Tougher requirements and more scrutiny. Merchants labelled as high-risk often have to jump through extra hoops for approval and ongoing monitoring.
Chargeback trouble. Chargeback rates for high-risk accounts often exceed 1%. This can trigger card network monitoring programs. Or worse – the dreaded MATCH list.
Limited payment processing options. Some processors and card networks will simply refuse to work with certain high-risk categories.

The result is a constant game of cat and mouse to keep your accounts in good standing. Protect your revenue from fraudsters and chargebacks. It’s time consuming. And it’s expensive.

In short, high-risk payment processing demands better risk management. This is why you should choose 2Accept for your high-risk payment processing needs.

High-risk business providers who succeed are ones who approach risk management with a strategic, multi-layered mindset. Acceptance of additional fees. Investing in the right fraud prevention technology. Ongoing chargeback prevention efforts.

This is why we developed these 5 essential risk management tactics for high-risk processing success. Let’s dive into them.

Top 3 high-risk merchant account providers

If you’ve already run into issues with your current payment processor, or you are just getting your start in the high-risk industry…

It’s time to find the right high-risk merchant account provider.

This is an extremely important choice. Not all high-risk business providers are the same.

Choosing the wrong one could spell disaster for your business. Suddenly all your payments will get stuck. Or your account will get frozen. Or worse.

But when you know what to look for and who to trust, you’ll open the door to smoother payments, better customer service, and more time to grow your business.

So let’s talk about who is worth considering and who should be crossed off your list.

Number 1: 2Accept

2Accept has one of the best high-risk payment processing reviews out there. Specialising exclusively in high-risk payments, they know the challenges this industry faces better than most.

Fraud prevention is top-notch. Chargeback tools. Automation to help you manage high-risk payments.

Everything is customisable based on your exact business type. One-size-fits-all solutions don’t work with high-risk.

With 2Accept, even getting approved is usually fast. They work with merchants other companies turned away.

Number 2: PaymentCloud

PaymentCloud is a solid choice for many high-risk verticals. Competitive rates and decent customer support make them a reliable player in the space.

But where they lag behind is advanced fraud prevention tools. Expect to use a third-party solution.

Number 3: Durango Merchant Services

Durango has been around for a while, and they accept a long list of high-risk categories.

Offering international accounts and multi-currency processing. One downside is that account setup may take a while. Fees can also be more variable depending on the riskiness of your business model.

Comparing high-risk processors is a smart move. 2Accept has the best reputation in the industry.

But you’ll want to do your due diligence and make the best choice for your business.

Risk management tactics that actually work

Risk management has to be a top priority for your high-risk business. But you also have to use the right tools.

It’s no good having extensive fraud prevention if your business will also be flagged by chargebacks. Finding the sweet spot is critical. A balanced multi-layered approach to risk management is the key.

According to PYMNTS research, scam-related fraud jumped 56% in 2024. Fraudsters are getting smarter. Your defences need to keep pace.

The tactics you should be using for high-risk payment processing.

They work. Don’t waste your time and money on what won’t help.

1. Strong verification systems

Address Verification Service (AVS) and Card Verification Value (CVV) are basic but effective line of defence. Catching a surprising number of fraudulent transactions.

2. Real-time transaction monitoring

Automated, AI-powered systems allow you to instantly spot anomalies. Unusual purchase patterns, mismatched billing/shipping addresses, and velocity attacks can all be flagged before they do damage.

3. Transaction limits

Caps on transaction values and daily totals provide further risk mitigation. Reducing exposure, any losses that do occur are contained.

4. Detailed record-keeping

Essential when it comes to disputes. Transaction logs, order confirmations, shipping receipts and customer correspondence. Maintain detailed records.

Chargebacks won’t get the upper hand when you are prepared.

How to protect your business from chargebacks

Chargebacks can absolutely decimate high-risk business accounts.

Did you know friendly fraud is 60-80% of chargebacks?

It’s that sneaky chargeback from happy customers who know the odds are in their favour. They received the goods and services. But they still dispute the charge anyway.

Global chargeback volume reached 238 million in 2023, and it’s growing fast.

And if you do get hit with chargebacks, successfully contesting illegitimate ones is key. Accepting chargebacks without even investigating can bleed you dry.

Basic chargeback prevention tactics should be automatic.

Crystal clear billing descriptors. Transparent return policies. Responsive customer service. Chargeback alert services. Don’t let chargebacks overwhelm your business.