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Merchant account rates vary based on your industry, processing history and bank relationships. Before we discuss cost reduction strategies, here’s what these fees look like across different high-risk sectors:
Charges on high risk merchant accounts can leave even experienced business owners confused. Here’s a breakdown of the main high risk merchant account fees you’ll encounter:
Q: What is a high-risk merchant fee?
A high-risk merchant fee is the money you pay for payment processing if your business operates in industries with higher fraud or chargeback potential. These fees include higher processing percentages (3.5-15%), larger transaction fees, monthly account fees and often mandatory reserves.
Q: What’s the best fee structure for high-risk businesses?
Interchange-plus pricing typically offers the best value for established high-risk businesses processing over $25,000 monthly. Newer or smaller businesses might benefit from flat-rate pricing initially. The ideal structure varies based on your average transaction size and monthly volume.
Q: How can I reduce chargebacks and lower my fees?
Implement clear product descriptions, send order confirmation emails with support contact information, use recognizable billing descriptors, offer proactive customer service and consider chargeback prevention tools. Lowering your chargeback ratio below 1% can trigger automatic rate improvements.
Q: How much is the high-risk registration fee for Visa?
Visa’s high-risk registration fee typically ranges from $500-$1,000 annually depending on your specific industry category. Some industries like adult content, CBD and online gambling face mandatory registration, while others may avoid this requirement depending on their specific business model.
