High-Risk Merchant Accounts: How to Avoid Risks and Stay Competitive in the 2025–2026 Fintech Market

A. Hembar-Tabakova

Head of Payments Department

22 December 2025

High-Risk Merchant Accounts: How to Avoid Risks and Stay Competitive in the 2025–2026 Fintech Market

Jump to Section:

Are payment blocks putting your cash flow at risk? In the high-risk segment, account freezes and payout holds are a common operational challenge — usually triggered by elevated chargebacks, AML concerns, or mismatches between declared and actual traffic geography. As banks and PSPs tighten underwriting in 2025–2026, high-risk merchants face stricter onboarding and closer post-launch monitoring.

In online payments, not all businesses are equal in the eyes of banks and PSPs. If your transactions involve high refund volumes, regulatory complexity, or an unconventional sales model — or if you operate in gambling, crypto, forex, or subscription services — you will likely be classified as a high-risk merchant.

But a high-risk merchant account is not a sentence. It is a scaling tool — if you choose the right provider, prepare documentation properly, and maintain compliance.

In this article, you’ll learn:

when a business is classified as high-risk
how to choose a provider and avoid payment blocks
what to check before integration
which mistakes to avoid
how to operate safely in a high-risk environment .

What Is a High-Risk Merchant Account?

A high-risk merchant account is a specialized account for accepting card and alternative payments for businesses with increased chargeback, fraud, or regulatory risks. These accounts are opened by dedicated PSPs willing to take on additional risk in exchange for higher fees and rolling reserves.

Why is it important?

Traditional banks avoid such clients because they risk fines of up to €500,000 (e.g., from FCA or BaFin) or even losing their license. As a result, they either decline these clients or freeze accounts after the first wave of transactions.

A specialized high-risk PSP operates differently: it understands the industry, has separate risk models, and accepts clients that banks refuse.

Example:
A crypto platform with U.S. traffic received four rejections from EU banks but successfully opened a merchant account with a PSP specializing in virtual assets and enhanced KYC/KYB.

Which Businesses Are Considered High-Risk?

Not every non-standard business model is automatically high-risk. In 2025, bank risk-scoring is based on a combination of factors:

chargeback rate > 1%
company jurisdiction
traffic geography (U.S., LatAm, India — high-risk)
sales model (trial, subscription, high-ticket sales)
AML risks

Your company jurisdiction and structure can directly affect onboarding outcomes. If you’re still choosing a setup, use our step-by-step guide: How to Choose the Best Offshore Jurisdiction in 2025.

Industries automatically classified as high-risk

Industry	Main Risk Trigger
Gambling / Betting	Chargeback > 2%
Cryptocurrency	AML/KYC, volatility
CBD / Nutraceuticals	Regulations, refunds
Forex / Brokers	High-ticket transactions, chargebacks
Travel / Airlines	Seasonality, cancellations
Adult / Dating	Reputational and compliance risks
Subscriptions (SaaS)	Friendly fraud, auto-renewals

30% of high-risk fintech startups are rejected by traditional PSPs due to high chargeback rates.

Crypto platforms are often blocked due to AML/KYC misalignment.
Traffic from the U.S., Latin America, India, or the Philippines is a major red flag for many providers.

Practical Checklist: How to Choose a PSP and Integrate a High-Risk Merchant Account

Integrating a high-risk merchant account is not just “sign a contract and get a Merchant ID (MID).” It is a strategic decision that affects conversion, cash flow, and business stability.

The right PSP determines your processing uptime, fees, onboarding speed, and block-free operations. For high-risk verticals (adult, gaming, digital entertainment, nutraceuticals, subscription models), the requirements are even tougher. Below is a practical checklist to help you prepare and pass onboarding on the first attempt.

1. Prepare Your Business for KYC/KYB Review

Providers evaluate not only documents but also the overall “maturity” of your business.
The more complete the data, the fewer additional questions and the faster the onboarding.

You will need:

A registered company with a clear business model
Proof of real operations: website, social media, product roadmap
Transparent source of funds and legitimate marketing channels
Policies (Privacy, Refund, Delivery, Terms of Use) adapted to high-risk verticals

2. Define Your Key Requirements for a PSP

To select the right provider, you must understand your operational parameters:

Client geography (EEA, LatAm, APAC, US)
Note: not all PSPs support LatAm, India, or U.S. traffic — a common hidden trigger for freezes. Read: How to open a business payment account in 2025–2026/.
Payment methods (cards, wallets, local methods).
Expected transaction volume (MRC, peak loads)
Recurring payments, chargebacks, refunds
Product types and traffic risk level

These parameters affect MDR, rolling reserve, onboarding time, and processing schemes available.

3. Check the Provider’s License and Regulation

When the shortlist of PSPs is ready, verify:

EMI/PI license status
regulator jurisdiction
presence in FCA/ECB/BoE registers
auditor and inspection history

4. Evaluate the PSP’s Experience in Your Industry

A provider must have real cases in your vertical.

A PSP that works only with classic e-commerce will not handle adult or forex traffic.

A strong provider has stable risk management, understands traffic patterns in your niche, and correctly evaluates chargeback thresholds.

5. Assess Fraud Prevention and AML Infrastructure

For high-risk businesses, this is critical.

The PSP must support:

3DS 2.0
tokenization
AI fraud modules
velocity limits
full AML monitoring

6. Prepare the Technical Integration

After approval, the technical phase begins:

API/SDK setup and test environment
connecting webhooks (success, fail, chargeback, refund)
testing 3DS, antifraud, currencies, and local methods
ensuring checkout flow complies with regulatory and card scheme rules

In some GEOs, “Pay by Bank” (bank redirects) can reduce card-related fraud and improve payment acceptance. Here’s how bank redirects work in practice: Bank transfers: bank debits, credit transfers and bank redirect.

7. Launch and Maintain Risk-Free Processing

After going live:

Monitor chargebacks and traffic quality
Update policies and legal documentation regularly
Track AML activity and suspicious patterns
Record business model changes and notify the PSP in time

PSPs prefer predictable merchants — this is the foundation of long-term cooperation.

Need a PSP shortlist for your vertical?

Request PSP comparison

How to Avoid Account Freezes: 5 Key Rules

In the high-risk segment, account freeze is not “bad luck” — it results from hitting specific risk triggers. Banks and PSPs must comply with strict regulations, so any anomaly in payments, geography, or user behavior may cause a freeze, payout delays, or complete MID deactivation.

Freezes typically occur not on day one, but after the first wave of transactions when the PSP conducts a post-onboarding risk review and compares your declared data with real metrics.

Below are five essential rules that help high-risk businesses operate smoothly and avoid unexpected shutdowns.

1. Do Not Hide Your Traffic Geography

Most freezes happen when a PSP detects traffic from countries not declared during onboarding.

2. Keep Chargeback Rate Under Control

Target: below 1%.
Methods: 3DS 2.0, clear refund policy, proactive support.

3. Maintain Transparent Compliance

Outdated KYC/KYB documents = freeze risk.

4. Monitor Transactions Regularly

Weekly performance review is standard for high-risk merchants.

5. Choose a PSP According to Risk Appetite

Crypto PSP ≠ Gambling PSP.
Different verticals require different risk models.

To avoid freezes, a business must not only pass onboarding but also reflect the real picture of its payment flows. Transparency, structured data, and regular monitoring are the foundation of stable operations in the high-risk segment.

Already facing payout holds or a sudden review?

Get a freeze-prevention audit

Frequently Asked Questions (FAQ)

How long does it take to open a high-risk merchant account?

From 3 to 14 days, depending on the industry and documentation quality.

Can I accept crypto payments on a high-risk account?

Yes, many of our partners support USDT/USDC and other cryptocurrencies.

Does a high-risk merchant account support Apple Pay / Google Pay?

Yes, most providers offer full integration.

How much does account opening and maintenance cost?

Pricing varies by provider, jurisdiction, and business model, but typically includes:

setup fee — one-time account opening fee (sometimes 0 for certain EMIs)
monthly maintenance fee
compliance fee for enhanced due diligence
transaction fees
additional operational fees (chargeback handling, refund fee, etc.)

We usually prepare a comparison of several providers so you can choose the most cost-efficient solution without hidden charges.

Conclusion: A High-Risk Merchant Account Is a Strategic Advantage

High-risk payment solutions are not a limitation — they are an opportunity to operate globally, accept stable payments, and scale in challenging industries.

With the right PSP, a clear business structure, and advanced antifraud tools, you can: