Instant Approval for High-Risk Merchant Accounts: Is It Possible?

If you operate a high-risk business, you’ve likely faced challenges in finding a dependable payment processor. High-risk merchants, with increased chances of chargebacks, fraud, or other complications, present a challenge for payment processors. Consequently, these businesses face more stringent underwriting standards and longer approval times.

This is why many high-risk merchants may be tempted to seek payment processors claiming instant approval. But do such providers exist, and are they reliable?

Key Considerations When Researching High-Risk Merchant Accounts with Instant Approval

Carefully research merchant service providers, as partnering with the wrong one could jeopardize your ability to get approved with other providers for up to five years.

Watch for red flags like:

  1. Ambiguous Merchant Agreement: Choose a merchant service provider that can clearly explain your agreement.
  2. Poor Customer Support: Responsive customer support is crucial for high-risk merchants due to potential processing issues.
  3. Hidden Fees: Be cautious of hidden fees and ask for clarification on rolling reserves, monthly minimum fees, and more.

High-Risk Merchant Account Application FAQs

What Does Instant Approval Mean?

Instant approval is a marketing term used by payment processors to attract customers. However, instant approval is rarely a reality for high-risk merchant accounts. Even low-risk businesses may wait 1-2 business days for approval. Evaluating a high-risk business involves reviewing the merchant application, conducting a risk assessment, and checking the owner’s credit score.

Instant Approval vs. Auto-Approval:

Some merchant service providers offer auto-approval options. These accounts are likely to be approved due to pre-established criteria met during the initial stages of the approval process. Payment processors can auto-approve accounts for mid-risk and sometimes high-risk merchants, depending on transaction types, industry, and business history.

Can High-Risk Merchants Get Instant Approval?

Although some payment service providers (Square, PayPal, Stripe, etc.) offer near-instant approval, they typically don’t cater to high-risk industries. Many high-risk merchants turn to merchant service providers specializing in high-risk accounts to avoid processing limitations and account termination risks.

How Do Companies Offer Instant Approval for Merchant Accounts?

Claims of “pre-approval” or “instant approval” within 24-48 hours are misleading. The approval process involves both the payment processor’s internal process and a review by the provider’s issuing financial institution. If the financial institution denies approval, the payment processor must seek acceptance from other institutions. Expect a minimum wait of 3-5 days to 3-5 weeks for high-risk merchant account approval. Begin the process as early as possible.

Credit Scores Are Vital for Merchant Account Applications

Merchant account providers conduct credit checks on applicants. A credit score of 580 or lower could result in higher processing fees, long-term contracts with early termination fees, or denial. Some providers don’t require a credit check but aren’t suitable for high-risk payment processing.

Improve your approval chances by finding a reputable provider with a proven track record in your high-risk industry. Be transparent about your business and provide all relevant information in your application. An informative website and organized paperwork can expedite the approval process.

Turn to High Risk Payment Processors for High-Risk Businesses

If your high-risk business has been denied credit card processing, High Risk Payment Processors can help. With a 99% approval rating, they specialize in high-risk processing and offer benefits like approval within 48-72 hours, zero fee processing, and bad credit merchant accounts