“High Risk” is an industry term, and it’s important to note that there are many fantastic businesses which would be given this designation by a bank or credit card processor. While there are unique factors that go into how the industry views any business, in general there are three big factors for the “high risk” designation:

1. The business may have greater chargeback risks due to the nature of processing or industry. Typically any business with a chargeback ratio of over 1% enters a “high risk” category.
2. The business may operate in unique, new, or legally regulated industries which fewer processing banks want to underwrite. Uncertainty creates risk for banks, and so if the industry is very new, or has developing regulation, this designation will typically apply.
3. The business may accept a high percentage of transactions over the phone or via mail which is considered higher risk than in person transactions. If the card and cardholder are not present with the merchant at the time of the transaction, the risk of fraud is greater. As such, this can cause businesses primarily accepting payments this way to be considered in a higher risk category.