Sales, industry type among factors that make businesses high risk

The 2008 Wall Street crash made it difficult for high-risk businesses to secure financial backing.

In 2010, e-commerce sales totaled $165 billion, which was nearly 15 percent higher than e-commerce sales in 2009, according to the U.S. Department of Commerce. Internet sales are here to stay, so high-risk businesses must be able to accept credit cards online if they want a portion of the booming e-commerce pie.

The economic turmoil that followed the 2008 Wall Street crash forced banks and other lenders to become more selective in choosing businesses they will back, so more companies have had to turn to high-risk merchant accounts for financial support. Businesses are considered to be high risk for a variety of reasons, listed here:


Companies with industry-average sales are actually considered to be the safest investments for banks. Companies with higher volume transactions are at the greatest risk for fraud, while conversely, companies with lower volume sales might not be able to afford to implement expensive, but necessary, fraud screening practices. Seasonal businesses are also considered high risk because banks consider companies with consistent sales year-round to be more stable.

Industry Type

Companies that provide a service to high risk clientele, including gambling, dating, detective and pharmaceutical services, are considered high risk because clients may not be willing to provide accurate identification information and cannot be tracked if they avoid payment. In short, these industries are more likely to produce fraudulent transactions.

Credit History

Banks are also hesitant to provide financial backing to businesses or business owners with poor or unproven credit histories. Any questionable aspect of a business or business owner's financial history, such as prior instances of bankruptcy or fraud, will likely require a high-risk merchant account to be sought out.

Once a company determines it requires a high-risk merchant account, it must perfect its customer service model. In an era driven by social media interactions, the consumer-business relationship is more direct than ever before.