Shopify Payment Processing for High-Risk Businesses: A Complete Guide

Shopify has become one of the most popular e-commerce platforms globally, providing merchants with tools to build, manage, and scale their online stores. However, businesses in high-risk industries often face challenges in securing payment processing solutions. High-risk businesses, such as those in the adult industry, gambling, subscription-based services, or those selling health products, are more likely to encounter difficulties when it comes to payment gateway approval. These challenges arise due to the potential for chargebacks, fraud, or regulatory scrutiny, making it essential for merchants in high-risk sectors to find reliable payment processing solutions.

This guide explains how high risk payment processors shopify can effectively navigate Shopify’s payment processing options.

What is a High-Risk Business?

High-risk businesses are those that are deemed to have a higher likelihood of chargebacks, fraud, or other financial risks. These businesses may also operate in industries with more complex regulatory frameworks. Some examples of high-risk businesses include:

• Adult entertainment: Websites selling adult products or providing adult services.
• Online gambling and gaming: Includes casinos, betting platforms, and lottery services.
• Subscription models: Products or services that are billed on a recurring basis, such as monthly membership plans.
• Health and wellness: Including weight loss products, supplements, or unregulated alternative medicines.
• Travel and event ticketing: Due to cancellations, refunds, and no-shows, this industry is often classified as high-risk.

These businesses often struggle to find mainstream payment processors who are willing to provide the necessary tools for handling payments due to the increased risk of chargebacks and potential legal issues.

Shopify Payments and High-Risk Businesses

Shopify offers its native payment gateway, Shopify Payments, as a solution for merchants looking to accept payments on their online store. However, Shopify Payments has strict guidelines about which types of businesses are eligible to use the service. High-risk businesses often do not meet these guidelines and may find themselves unable to use Shopify Payments.

When Shopify determines a business to be high-risk, they may either block them from using Shopify Payments or suspend their account entirely. Shopify’s terms of service are clear about restricting certain industries, and high-risk merchants who are flagged may need to look into third-party payment processors instead.

Third-Party Payment Processors for High-Risk Businesses

While Shopify Payments may not be an option for high-risk businesses, Shopify does allow the integration of third-party payment gateways. High-risk merchants often rely on these external providers to process payments securely. Here are a few important third-party payment processors for high-risk businesses:

1. PayPal: PayPal is one of the most widely used payment processors, even in high-risk industries. However, it’s important to note that PayPal has its own terms and conditions, and businesses in some high-risk sectors may still face account freezes or restrictions. Merchants should evaluate whether PayPal is the right fit based on the type of products or services they offer.
2. Authorize.Net: A trusted name in payment processing, Authorize.Net provides solutions for high-risk businesses. They offer flexible tools for online transactions, including recurring billing for subscription-based models. However, high-risk businesses may still face higher fees or stricter approval processes.
3. PaymentCloud: PaymentCloud specializes in working with high-risk businesses and offers a range of services for different industries. It is particularly known for handling businesses in the CBD, adult, and subscription sectors. PaymentCloud offers customized solutions, with a focus on security and fraud prevention.
4. NMI (Network Merchants, Inc.): NMI is a popular payment gateway that supports a variety of industries, including high-risk sectors. NMI’s platform can handle both credit card processing and ACH transactions, making it a versatile solution for businesses that need reliable payment processing.
5. Pin Payments: Pin Payments is another viable option for high-risk businesses, offering support for international transactions and recurring payments. Businesses in sectors like digital products or online services find Pin Payments particularly useful, as it provides flexibility in handling diverse payment needs.
6. SimplePay: SimplePay is designed for businesses in high-risk sectors and provides high-approval rates with an emphasis on minimizing chargebacks. It also allows businesses to access advanced fraud protection tools, which is crucial for high-risk industries.

Key Considerations for High-Risk Shopify Merchants

When choosing a payment processor for your Shopify store, high-risk merchants need to consider the following:

1. Chargeback Management: High-risk businesses are more likely to face chargebacks due to the nature of their products or services. Chargeback management is critical, and many third-party processors offer tools to manage disputes. Merchants should ensure that their chosen provider offers solutions like chargeback alerts, a dedicated support team, and ways to reduce chargeback ratios.
2. Payment Security: Protecting sensitive customer information is vital for all online businesses, especially for high-risk merchants. Look for a payment gateway that offers features like encryption, PCI compliance, and fraud prevention tools to safeguard against fraud.
3. Transaction Fees: High-risk businesses often face higher fees for payment processing. These can include higher setup fees, monthly fees, and per-transaction fees. Merchants should factor these costs into their business model when choosing a payment processor.
4. Global Reach: If your business operates internationally, ensure that your payment processor supports multiple currencies and payment methods. This will allow you to capture a broader customer base and reduce the friction in international transactions.
5. Customer Support: Reliable customer support is crucial for any high-risk business. Choose a payment processor that offers 24/7 support, especially if your business operates across different time zones or needs assistance with resolving payment issues quickly.

Conclusion

Running a high-risk business on Shopify requires careful navigation of payment processing options. While Shopify Payments may not be available for many high-risk industries, third-party payment processors offer a wide range of solutions that can accommodate the unique needs of these businesses. By considering factors like chargeback management, payment security, and customer support, high-risk businesses can ensure smooth and secure transactions, allowing them to focus on growing their online store.