So what is a high risk payment processor or high risk payment gateway, and do you really need one? You may have been told that selling guns makes you a high risk merchant account, but is that true?
According to their ‘Payment Facilitator and Marketplace Risk Guide’, Visa has classified a set of merchant types as “high-brand risk” when accepting card-absent payments, as these businesses present an elevated risk to the payment system— specifically due to higher levels of disputes or brand/reputation risk. These merchant types are also typically highly regulated with some deemed illegal in certain jurisdictions.
Visa defines a high-brand risk merchant as a merchant outlet accepting or sending card-absent (and in some cases specifically cross-border) payments, required to be classified with one of the following Merchant Category Codes (MCC):
| MCC | Description |
|---|---|
| 5122 | Drugs, Drug Proprietaries, Druggist Sundries |
| 5912 | Drug Stores and Pharmacies |
| 5962 | Direct Marketing – Travel-Related Arrangement Services |
| 5966 | Direct Marketing – Outbound Telemarketing Merchant |
| 5967 | Direct Marketing – Inbound Teleservices Merchant (Digital Adult Content) |
| 5993 | Cigar Stores and Stands |
| 7273 | Dating Services |
| 7995 | Betting, including Lottery Tickets, Casino Gaming Chips, Off-Track Betting, and Wagers at Race Tracks |
In the cases below, Visa designates particular activities to be high-brand risk, as opposed to classifying the entire MCC they operate in as high-brand risk:
| Activities Designated as High Brand Risk |
|---|
| MCC 4816: Computer Network / Information Services Cyberlockers and similar remote digital file-sharing services where uploaded content is accessible to the public or the service pays uploaders for content. |
| MCC 5816: Digital Goods—Games Games of skill such as daily fantasy sports gaming where consumers pay a fee to enter and the outcomes of the game is determined by skill instead of luck. |
| MCC 6051: Non-Financial Institutions Purchase of cryptocurrency, funding of crypto wallets or funding of initial coin offerings (ICO). |
The above data was pulled directly from the file at the below link:
are you a high risk merchant account?
First, did you notice which categories of merchants weren’t listed in the above tables…FFL’s and gun companies. While it is true that some providers won’t work with you because of the type of business you are in, it likely has more to do with their political leanings than a true designation as a high risk merchant.
A lot of companies in the credit card processing industry who target companies in the gun industry will claim to be the solution and a high risk payment provider. The truth is, many of them will use this as leverage for higher processing fees.
Think about gun purchases…stringent approval process, non-refundable and non-returnable, and while admittedly debated politically, represent some of the most secure transactions that exist in today’s marketplace.
integrity matters
At FFL Payments, we are honest and transparent with you about how we can help and how we can provide valuable merchant services with processing costs that will save you money. Click below to get more details on our pricing model.
