When You Are Denied By Stripe For A Merchant Account

How Do You Successfully Select a Good High Risk Merchant Account Provider If You Have Been Denied By Stripe? Choosing a payment processor for a high-risk business is tough, but it can pay to know your options. High risk businesses like cannabis dispensaries and luxury jewelry and accessories (especially if they are selling knockoffs) are often best served by more specialized payment providers. However, there’s still considerable competition among the merchant services marketplaces for these challenging merchants. Here’s how you can choose the best provider for your e-commerce business.

Merchant accounts are different depending on your business model, So follow these steps:

Identify the risks involved in your business.

Your first step should always be to talk to your potential merchant services providers. Ask them if they can provide a level of service and security that meets your needs. After this, you need to identify the risks involved in your business and ask the providers how they will address those specific risks.

After this, you need to identify the risks involved in your business and ask the providers how they will address those specific risks. The best merchant account for a high-risk business is the one that best allows you to accept credit cards while mitigating the risks. The first step in choosing such an account is to identify the risks involved in your business.

A Good High Risk Merchant Account Provider Should Have Tools To Mitigate Chargebacks.

The main risk factor is chargebacks — when a credit card holder disputes a purchase that’s already been processed and charged to their account. Chargebacks can be initiated for any number of reasons, most often because the cardholder didn’t receive the item or felt that there was a problem with the transaction.

When chargebacks are initiated, they have to be dealt with within 45 days by either refunding the money to the cardholder or charging it back to the bank that issued you your merchant account. The main factors affect how much risk you’re liable for as an online merchant, namely your business model. Online merchants who sell digital goods such as ebooks and music are at higher risk than those who sell physical goods. This is because digital goods are more likely to result in chargebacks since it’s easy for a cardholder to dispute them. Similarly, merchants selling products with recurring payments are also at higher risk due to regular chargeback activity.

Obvious Red Flag Businesses

Pyramid schemes, Payday Loans, and counterfeit designer goods are among the most widely prohibited businesses when it comes to merchant accounts. However, there are plenty of other high-risk industries that may not be as easily identified as being bad ideas for a merchant account. Even though the types of high-risk businesses that we’ll talk about here aren’t all black-and-white violations, they’re still best served by choosing a merchant account provider that specializes in servicing these kinds of clients.

Firearm sellers and adult content are two examples of products and services that tend to push the limits on what kinds of companies can get merchant accounts, but it’s usually possible to find solutions for merchants in these industries provided you’re willing to put in a little work.

Alternatives Methods of Payment For High Risk Merchants – eCheck, ACH, E-invoice, and Direct Debit.

Owners of high risk businesses know that credit card processing for high risk businesses is more expensive and complicated than most traditional types of business. They know credit card transactions can be risky for the business because it implies accepting chargebacks from their customers, who have a tendency to make fraudulent claims in order to get a refund or compensation. Moreover, they must pay a higher transaction fee due to the high number of disputes.

If you own a high risk business you can learn how to accept eChecks – which are usually cheaper and much easier to get approved for than credit cards – and reduce your costs by doing so. If you are looking for a merchant account to process your high-risk business, using eCheck is definitely a major perk. When a customer pays with an eCheck, they are authorizing the bank to move money from their account into yours. 

ACH Payments

Your high-risk business can save time, administrative effort, and money by using ACH payments. ACH payments have the advantage of being lower cost and more convenient than credit card processing.

The biggest misconception about ACH (Automated Clearing House) payments is that they’re only for businesses with low transaction volumes. After all, aren’t credit card transactions more lucrative? A credit card transaction typically for a high risk merchant carries a processing fee of 5 to 6 percent of the sale, while an ACH transaction is priced at 2 to 3 percent per transaction.

In addition, credit card processors may charge monthly minimum fees and a percentage of sales from the merchant account if it reaches a certain level. For example, a processor might charge a monthly minimum fee or chargeback fee if you have a large number of customer disputes or you don’t meet other criteria in your contract. You may also be responsible for the fees charged by your customer’s bank if the charges are disputed or charged back after the sale goes through.

E-invoicing and Direct Debit

In addition to credit card processing, high-risk merchants will want to explore e-invoicing. E-invoicing is the practice of receiving payment via direct debit. Before you begin using e-invoicing software, you need to understand how it works. The software does not print on paper but rather stores all of your documents in one central location online. 

When you are ready to send out an invoice, you simply input the customer’s name, address, and other basic account information and then send out the invoice via email or fax. Once the recipient receives the bill, they can pay the amount due online by direct debit from their bank account. This works particularly well for recurring payments.

Direct Debit

Direct debit is among the easiest ways for people to pay because they don’t have to remember to make a payment or use a credit card. It’s also convenient for business owners because they can receive a steady stream of income without having to wait around for customers to pay or worrying that a check won’t clear.


Stripe is a very popular provider of credit card processing services, but Stripe does not offer merchant accounts directly to high-risk businesses that have had trouble in the past with chargebacks or who don’t meet other risk requirements. In summary, if you’re a high-risk merchant, Stripe is not likely your best bet. There are many other options out there that will suit your needs and accommodate the type of business that you run. That is why you need to contact Fintech Merchant Accounts when you are in this situation. Simply click HERE to apply or schedule a phone call.

Additional Resources

How do you successfully select a good high risk merchant account provider if you have been denied by Stripe?