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Best High Risk Payment Processors for UK Businesses
Compare specialised providers built for high risk industries, understand hidden costs, and secure the best high risk merchant account for your business with expert guidance from Independent Merchant Services.
If you’re a high risk business, choosing the wrong payment processor can cost you more than you think. From excessive transaction fees and rolling reserves to declined applications and account terminations, the best processor depends on your industry risks and processing needs. Today’s high risk payment landscape features specialised providers offering comprehensive solutions for challenging industries, with advanced fraud prevention, risk management tools, and tailored merchant accounts for businesses that traditional banks avoid.
This guide compares the best high risk payment processors for UK businesses, focusing on total cost, risk management, and suitability for challenging industries. The market has evolved, with processors supporting multiple currencies, alternative payment methods, and industry-specific compliance to serve sectors from online gaming to CBD sales. High risk payment processing now includes advanced security features for secure transactions and fraud risk management. Independent Merchant Services helps you compare options and switch to the best value solution based on your industry and needs.
What is a High Risk Merchant Account?
A high risk merchant account is a specialised banking solution that enables businesses in challenging industries to accept various payment methods, from credit and debit cards to digital wallets and alternatives like cryptocurrency and buy-now-pay-later services. It acts as a protective barrier between your business and financial institutions, ensuring reliable payment processing despite elevated fraud risks or regulatory scrutiny.
For high risk businesses, having the right merchant account means access to tailored fraud protection and chargeback management, crucial for operational stability and profitability. Key features include:
- Support for multiple payment methods and currencies
- Enhanced fraud detection and prevention
- Chargeback monitoring and dispute assistance
- Compliance with industry regulations and security standards
- Flexible underwriting for high risk sectors
- Longer settlement periods and possible rolling reserves
Businesses may be deemed high risk due to their industry, transaction patterns, high chargeback rates, international sales, or regulatory scrutiny. This classification often requires specialised high risk payment processors.
Compared to standard merchant accounts, high risk merchant accounts come with higher fees, stricter contract terms, and potential penalties for non-compliance. However, they provide access to a broader range of products and services unavailable under standard accounts. These accounts are essential for industries like adult entertainment, online gaming, and travel.
How High Risk Payment Processing Works with Challenging Industries
High risk payment processors integrate robust risk management with business operations, enabling secure payments despite elevated risks.
When customers purchase, advanced fraud detection routes payments to underwriting banks familiar with high risk sectors. Businesses receive a merchant category code (MCC) used to assess risk.
Funds transfer to your merchant account with risk controls like potential rolling reserves and payment confirmation to ensure customer satisfaction.
Processors offer:
- Hosted PCI-compliant payment solutions for challenging industries
- Integrated processing within your website with industry-level security
- Secure payment gateways include encryption, tokenisation, and fraud detection to reduce risk.
- Keeping detailed transaction records helps contest chargebacks, important since frequent chargebacks increase high risk classification.
- This approach ensures a smooth customer experience while managing sector-specific risks.
What High Risk Businesses Need From a Payment Processor
Specialised industry expertise: Look for processors that understand your specific industry challenges, from adult entertainment and online gaming to CBD and nutraceuticals, and have experience assessing what makes a business high risk. They should be able to evaluate your business's risk level based on industry type, sales patterns, and other risk factors, offering tailored compliance and risk management solutions.
Negotiated fees below high risk market rates: Independent Merchant Services can help you negotiate processing fees below standard high risk rates, potentially saving your business significant costs on transaction fees and monthly charges. Note that businesses with poor credit history or high credit risk may face higher fees or stricter terms.
Advanced fraud prevention and chargeback management: Choose providers with sophisticated fraud detection systems and proactive chargeback prevention tools to protect your business from financial losses, especially from fraudulent transactions and high chargeback rates.
Multiple payment methods and international capabilities: Ensure your processor supports diverse payment types including cards, digital wallets, and alternative payment methods, plus multi-currency processing for global operations.
Flexible underwriting and quick approval: Select processors known for understanding high risk industries and offering reasonable approval timelines without excessive documentation requirements. Financial stability, financial history, and credit rating are key factors in the approval process, as they help determine your eligibility and the terms you receive.
Proven track record and established financial history: Having a proven track record and established financial history demonstrates your business’s reliability and financial stability, making it easier to secure favourable terms from high risk payment processors. A positive financial history can help mitigate concerns about your business's risk level.
New businesses and risk classification: New businesses without a proven track record or established financial history are often categorised as high risk because they lack proof of stability and profitability.
Transparent pricing and contract terms: Opt for processors that provide clear fee structures without hidden charges and reasonable contract terms that don’t trap your business.
Robust compliance support: Prioritise processors offering ongoing compliance assistance for your specific industry regulations and requirements. Staying compliant with local and international laws is crucial for high-risk businesses to avoid penalties and maintain processing capabilities.
Reliable customer support: Ensure access to knowledgeable support teams that understand high risk business challenges and can resolve issues quickly.
Payment Processor | Transaction Fees (High Risk) | Monthly Fees | Best For |
|---|---|---|---|
 | Competitive high risk rates | Varies by industry | Multi-industry high risk |
 | Competitive high risk rates | Varies by risk level | High risk industries |
 | Varies by industry | Transparent fees | Broad high risk portfolio |
 | Transparent fee structure | Negotiable | International high risk |
 | Competitive rates | Flexible fees | Established high risk businesses |
This table summarises key aspects of the top high risk payment processors, helping you compare fees, features, and industry specialisation for your business needs.
Common Costs and Hidden Fees to Watch For
- Rolling reserve requirements (typically 5-15%)
- High risk underwriting fees
- Monthly minimum processing fees
- Chargeback fees and penalties
- Early termination fees and long contracts
- “Introductory rates” that increase significantly
- Fixed fees: Many high risk processors charge higher fixed fees per transaction due to increased risk exposure
- Higher fees for businesses with high transaction volumes or high value transactions, as these increase the risk profile and potential for chargebacks or fraud
- Industry-specific fees: Certain sectors face additional compliance or regulatory fees
- International processing fees: Higher rates for cross-border transactions in high risk industries
- Account maintenance fees: Monthly or annual charges for maintaining high risk merchant accounts
- Many high risk businesses can negotiate better terms based on processing history and risk mitigation measures
- Risk assessment fees: Additional charges for ongoing monitoring and risk evaluation
High-risk businesses often face a longer settlement period for transactions, which can be up to a week, compared to the usual 1-3 days for low risk accounts. This longer settlement period is used by payment processors to reduce the risk of chargebacks and fraud, but it can affect cash flow and is a key difference between high risk and standard or low risk accounts.
Benefits of Using Specialised High Risk Payment Processors
High risk payment processors offer crucial advantages for businesses in challenging industries, including:
Key benefits include:
These benefits help high risk businesses maintain secure payment processing, adapt to evolving customer preferences, and support sustainable growth despite industry challenges.
Bank Account and Settlement Requirements
Managing a high risk merchant account requires understanding stricter bank account and settlement rules. Financial institutions impose more scrutiny on high risk businesses to guard against fraud, financial instability, and regulatory issues.
Most specialised merchant account providers require a dedicated bank account for settlements—where processed funds are held before transfer to your main account. Settlement periods for high risk accounts typically range from 7 to 10 days, longer than the 2-3 day turnaround for standard accounts. This delay allows providers to monitor transactions, manage chargebacks, and ensure compliance.
To maintain secure payment processing, high risk merchants should:
- Maintain a stable bank account with a strong credit history
- Keep sufficient cash reserves for chargebacks and rolling reserves
- Monitor transactions for unusual activity indicating fraud or compliance risks
- Use customised risk management tools like fraud detection and chargeback alerts
- Choose providers specialising in high risk sectors with tailored payment solutions and advanced security
Expect higher transaction fees, often 4% to 10% per transaction—and monthly fees reflecting increased risk. Rolling reserves may hold a percentage of sales temporarily to cover potential chargebacks. Additional documentation, such as financial statements and business plans, may be required to assess creditworthiness and risk.
For high risk industries like adult entertainment, online gambling, or subscription services, understanding and managing these requirements is crucial. Partnering with reputable providers and leveraging effective risk management ensures secure processing, builds customer trust, and supports sustainable growth.
How to Choose the Right High Risk Payment Processor for Your Business
Summary (Quick Takeaways)
Key Point | Explanation |
|---|---|
Best processor depends on industry and risk profile | Choose based on sector expertise, compliance support, and risk management capabilities |
Understand all costs including reserves and fees | Watch for rolling reserves, higher transaction fees, and industry-specific charges |
Processor experience matters significantly | Select providers with proven track records in your specific high risk industry |
Independent Merchant Services support for comparison and approval | Independent Merchant Services offers expert guidance to find and secure the best high risk payment processor for your business |
How Independent Merchant Services Supports UK Businesses with Payment Gateway Selection
At IMS, we serve as an independent adviser to UK businesses seeking the right payment gateway by offering:
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FAQs About High Risk Payment Processing
High risk industries include adult entertainment, online gaming, CBD and nutraceuticals, debt collection, travel and timeshares, forex trading, cryptocurrency, subscription services, and telemarketing. These sectors face elevated chargeback rates, regulatory scrutiny, or fraud risks. The classification can also depend on business model, with recurring billing, high ticket items, or international sales potentially increasing risk levels. Independent Merchant Services can help assess your specific risk profile and recommend appropriate processors.
High risk processing typically involves higher transaction fees (often 3-6%), rolling reserves (5-15% of sales held), monthly minimums, chargeback fees (£15-50 each), and potential setup costs. Additional fees may include risk assessment charges, compliance fees, and higher rates for international transactions. Independent Merchant Services provides transparent fee comparisons to help you understand total processing costs and avoid unexpected charges.
High risk merchant account approval typically takes 3-10 business days, depending on your industry, processing history, and documentation completeness. Some providers offer expedited approval for established businesses with clean processing records. Complex industries or businesses with previous account terminations may require longer underwriting periods. Independent Merchant Services can guide you through the application process to improve approval chances and timelines.
A rolling reserve is a percentage of your daily sales (typically 5-15%) held by the processor to cover potential chargebacks and disputes. This reserve provides security for the payment processor given the elevated risk profile of your industry. Funds are typically released on a rolling basis after 30-180 days. Independent Merchant Services helps businesses understand reserve requirements and negotiate favourable terms based on processing history and risk mitigation measures.
Yes, switching is possible but may involve early termination fees and contract obligations. The process typically takes 2-4 weeks including underwriting with the new provider. Having a backup processor approved can prevent processing disruptions during transitions. Independent Merchant Services assists businesses through the switching process, helping negotiate release terms and ensuring smooth transitions to better processing solutions.
Required documentation typically includes business registration, bank statements (3-6 months), processing history, business plan, compliance certifications for regulated industries, and personal identification. Some industries require additional permits, licences, or regulatory documentation. Preparing complete documentation improves approval odds and speeds the underwriting process. Independent Merchant Services provides guidance on documentation requirements specific to your industry.
Reduce chargebacks by implementing clear billing descriptors, comprehensive customer service, detailed terms and conditions, prompt refund policies, and fraud prevention tools. Many processors offer chargeback alert services and prevention tools. Maintaining chargeback ratios below 1-2% helps secure better processing terms and account stability. Independent Merchant Services can recommend processors with strong chargeback prevention tools and provide best practices for your industry.
Many high risk processors offer international capabilities including multi-currency processing, foreign exchange services, and global acquiring banks. However, international processing often involves higher fees and additional compliance requirements. Cross-border transactions may face increased scrutiny and longer settlement periods. Independent Merchant Services can identify processors with strong international capabilities suited to your global business needs.
High risk businesses must maintain PCI DSS compliance, implement advanced fraud prevention tools, use secure payment gateways, and follow industry-specific security requirements. Additional measures may include 3D Secure authentication, velocity checking, and enhanced customer verification. Regular security audits and compliance monitoring are typically required. Independent Merchant Services ensures you choose processors with robust security infrastructure appropriate for your risk profile.
Some high risk processors offer next-day or even same-day funding for established businesses with strong processing histories. However, many high risk accounts start with 2-3 day settlement periods due to risk management requirements. Funding speed often improves as you build a positive processing history with lower chargeback ratios. Independent Merchant Services can identify processors offering the fastest funding options suitable for your business profile.
Want Help Choosing the Best High Risk Payment Processor for Your Business?
Get approved without the guesswork. Independent Merchant Services helps UK businesses in challenging industries compare processors, reduce payment costs, and secure the best-fit high risk merchant account.
Request a free consultation today and we’ll recommend the best options based on your industry, processing volume, and specific risk management needs.
Roger Milne Founder and CEO of Independent Merchant Services, has helped UK businesses access better payment gateways and lower transaction costs since 2012 through transparent advice and exclusive provider rates.
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