Operating in a high-risk industry can offer incredible growth opportunities—but it also brings heightened scrutiny from payment processors. For businesses using merchant processing solutions in regulated or volatile spaces, account termination isn’t just an inconvenience; it can shut down operations overnight. Whether you’re scaling a high risk internet Shopify store or managing complex billing across multiple platforms, avoiding account closure requires proactive risk management. Knowing the common triggers for termination—and how to mitigate them—can protect your revenue streams and safeguard your long-term business viability.
Why High-Risk Merchants Face Greater Termination Risk
Processors see high-risk businesses as more likely to experience fraud, chargebacks, and regulatory issues. Whether you’re selling supplements, CBD, firearms, coaching programs, or adult content, the financial institution backing your merchant processing solutions must protect itself from losses. This leads to stricter monitoring, faster action on perceived risks, and lower tolerance for even minor compliance failures[1]. If you’ve ever wondered does Venmo have a limit on how much you can transact daily, the concept is similar—institutions impose limits to minimize their exposure. In high-risk merchant processing, the “limits” are simply more severe.
How to Prevent Chargebacks Before They Become a Problem
Chargebacks are one of the leading reasons high-risk merchants lose processing privileges. To keep your account safe, it’s important to implement several key practices. First, ensure that your billing descriptors clearly match your business name, helping customers easily recognize charges on their statements. Sending real-time transaction confirmations can also enhance transparency and trust. Additionally, maintaining a simple and transparent refund and cancellation policy will provide clarity for your customers. Quick responses to inquiries can prevent issues from escalating, leading to a better customer experience. Finally, enabling fraud prevention tools such as Address Verification System (AVS) and Card Verification Value (CVV) checking is essential for safeguarding your transactions against fraud. Reducing disputes protects not only your current merchant processing solutions, but also your eligibility for future accounts if you ever need to reapply[2].
The Dangers of Using Non-VBV BINs for Transactions
Some businesses are tempted to seek out non-VBV BINs (Bank Identification Numbers not protected by Verified by Visa protocols) because they seem to allow more transactions without customer authentication. However, using non-VBV payment flows can expose you to greater fraud, leading to chargebacks, disputes, and merchant account freezes. Even if the customer successfully transacts, lack of authentication protection increases your liability if they later dispute the charge. Smart high-risk merchants prioritize Verified by Visa and 3D Secure pathways, even if it adds a little friction to checkout.
High-Risk Shopify Stores: Special Challenges and Solutions
Building a high risk internet Shopify store introduces additional compliance challenges. Shopify Payments—the default processor for Shopify stores—does not allow certain high-risk products. If you try to use Shopify Payments and violate these terms, your account could be frozen without warning.
To protect your business, it is essential to set up a third-party high-risk payment gateway that is compatible with Shopify, ensuring a smooth and secure transaction process. Additionally, make sure your Merchant Category Code (MCC) accurately reflects your business type to avoid any complications. It’s also important to include visible disclosures regarding your refund policies, product ingredients, and shipping times to maintain transparency with your customers. Finally, collaborating with a partner who has experience in high-risk Shopify integrations can provide valuable support and guidance throughout the process.
If you’re asking, how do I get paid with Shopify as a high-risk merchant, the answer lies in customizing your backend setup with approved high-risk processors—not relying solely on default options.
Common Triggers That Lead to Merchant Account Termination
Excessive Chargeback Ratios
Most processors require merchants to maintain a chargeback rate below 1%. Exceeding this threshold—especially without a dispute management plan—raises serious red flags.
Regulatory Violations
Selling products without proper licensing (like selling CBD without disclosures or firearms without proper FFL compliance) can immediately result in account closure.
Mismatched Business Descriptions
If your merchant account is approved for one category (like coaching services) but you start selling high-risk goods (like supplements), you could be terminated for misrepresentation.
Processing Transactions for Prohibited Goods
Certain products—such as certain hemp-derived substances, kratom, or adult content—are banned by specific banks, even if they’re legal elsewhere. Violating these rules leads to termination.
Best Practices for Managing Merchant Accounts in High-Risk Industries
Maintain Open Communication With Your Processor
If you anticipate spikes in volume or changes to your business model, notify your processor ahead of time. Surprises lead to audits and terminations.
Monitor Chargeback and Fraud Metrics Weekly
Don’t wait for your processor to tell you there’s a problem. Review your own data proactively to spot trends early.
Keep Business Licenses and Certifications Updated
Especially if operating in CBD, firearms, or healthcare spaces, up-to-date documentation helps avoid violations during compliance reviews.
Implement Multi-Layer Fraud Prevention
Tools like device fingerprinting, email verification, and behavioral analysis reduce fraudulent orders and improve processor trust.
How to Recover if Your Merchant Account Is Terminated
Account termination isn’t always the end of the road, but acting quickly is critical. Begin by requesting a detailed explanation of the termination in writing. Immediately identify a backup merchant processing solutions provider to ensure continuity. It’s also important to adjust your chargeback and compliance strategies before reapplying. Additionally, consider collaborating with a specialist agency that focuses on placing high-risk merchants with banks that are open to your specific vertical.
The faster you stabilize payment processing, the less disruption you’ll experience with customer orders, subscriptions, and cash flow[4].
Conclusion
High-risk eCommerce isn’t for the faint of heart—but with the right systems and strategy, it’s entirely possible to build a durable, profitable business[4]. By proactively managing fraud, chargebacks, and compliance, merchants can maintain access to essential merchant processing solutions without fear of sudden termination. Whether you’re expanding a high risk internet Shopify store or optimizing payments with authenticated checkout flows, success lies in preparation and transparency[5]. At Payment Nerds, we specialize in helping high-risk businesses thrive with secure, scalable payment infrastructures that support growth instead of limiting it.
Sources
- Visa. “High-Risk Merchant Management and Compliance.” Accessed April 2025.
- Mastercard. “Chargeback Monitoring Program Guidelines.” Accessed April 2025.
- Federal Trade Commission. “Best Practices for High-Risk Ecommerce Merchants.” Accessed April 2025.
- Electronic Transactions Association. “Non-VBV and Fraud Risk in Merchant Processing.” Accessed April 2025.
- PCI Security Standards Council. “Maintaining Compliance in Regulated Payment Industries.” Accessed April 2025.
