If you’re running a business in a high-risk industry, you’ll encounter several challenges in setting up and running everything (not that we have to remind you if you’re already in the thick of things).
Our biggest tip? One thing you should take care of sooner rather than later is getting a high-risk merchant account.
This is true whether you’re a UK-based merchant or operate in any other part of the world.
However, the regulatory landscape within the United Kingdom is (often) even stricter than elsewhere in the world, making it even more important to ensure you have an account before you need it and that it’s with a high-quality provider.
If you don’t, you risk falling into the trap so many UK high-risk merchants do: they unexpectedly need a dedicated merchant account and turn to the quickest option available.
While convenient and quick, it’ll likely lead to even more complications down the road. So, how can you avoid that situation?
We’ve explored how easy it is to get an instant high-risk merchant account in the UK, how to improve the likelihood of approval, and what to know about the fees included.
Which Businesses Need a High-Risk UK Merchant Account?
As is the case nearly everywhere else in the world, in the UK, some business models are considered more high-risk than others.
However, the regulatory landscape specific to the United Kingdom is comparatively harder to navigate.
Businesses considered high-risk in the UK include:
Adult
CBD/cannabis
Gambling
Cryptocurrency
Tobacco/vape/e-cigarettes
Travel
Precious metals
In addition, businesses that trade goods with countries listed as high-risk third countries and dropshipping companies with warehouses located outside of the UK are deemed higher risk as well.
The fact that customs procedures for businesses in the UK have become increasingly regulated in the past few years typically leads to the classification of these establishments as high-risk (typically).
Regardless of the details, any high-risk business in the UK (and other parts of the world) is classified as such due to the higher chances of risk that include fraud, chargebacks, disputes, high-value goods, transaction patterns, as well as changing laws and regulations.
As a business owner in such industries, there’s not much you can do about that, but you can look for specialized payment solutions and a dedicated merchant account to ensure successful and compliant operations.
Starting to second-guess your business choices? It’s still often worth it—you’ll just want to be aware of the pros and cons before getting too deep into things.
Cons of Being a High-Risk Business
On top of having to deal with stricter regulations when obtaining services for your high-risk business, something to consider is that the fees will likely be higher than average.
It makes sense, as merchant providers and financial institutions want to be able to protect themselves in case the business does encounter issues, such as frequent chargebacks they’ll be required to cover or significant financial losses due to the business’s inability to keep up with regulatory changes.
In the UK specifically, though, these fees depend on which niche of the high-risk world your business is in. This means that payment service providers take into account your business’s specific compliance and regulatory risks before deciding how much to charge you for your account.
Additionally, processors often add extra fees as part of an “emergency fund” just to protect themselves in case of, well, an emergency (like frozen funds or legal issues).
Pros of Having a High-Risk Merchant Account
Although the process of getting a merchant account is challenging, the benefits of having one are ten-fold (not to mention you can’t do business without one).
A dedicated high-risk merchant account in the UK enables you to expand your business and reach different markets, offer more payment methods, and accept multiple currencies.
It also promotes operational flexibility, enhanced security, and user-friendliness, which are what any customer looks for these days.
This plays a big part in the operations of most high-risk establishments, as many high-risk merchants need to accommodate global audiences.
The bottom line? Whether you operate an online gambling site, an adult creator platform, or distribute products across borders, a high-risk merchant account is necessary to grow your business.
So…Can High-Risk Businesses Get Instant Approval for Their UK Merchant Account?
There is a lot of bad information online about getting instant approval for a high-risk merchant account. Truth be told, instant, as in “immediate” approval, isn’t possible for high-risk merchants.
Despite countless processors on the market advertising “instant approvals for UK high-risk merchant accounts,” providers haven’t figured out a way to completely automate this process quite yet (at least without cutting corners in other areas).
However, depending on who you work with, approval within 48 to 72 hours is possible nowadays. The key here, though, is being well-prepared when you submit your application, which we’ve expanded on below based on our years of experience helping high-risk merchants in the UK.
6 (Tried & Tested) Ways to Improve Your Chances of Approval as a UK High-Risk Merchant
While an instant approval isn’t very likely, there are ways to speed up the process and increase the likelihood of an approval. Acquirers review applications on a very case-by-case basis when approving merchants, especially in the UK.
At FastoPayments, we’ve worked with numerous UK-based merchants that have given us great insights into the regulatory environment at hand. We’ve helped merchants:
Ensure compliance with regulations
Reach customers outside of the United Kingdom
Distribute digital services more efficiently
Prevent fraud
Streamline the overall operational side of businesses
We’ve used our years of experience to advise merchants about what to consider when applying for a high-risk merchant account to ensure quicker approval.
To do that, we provide our merchants with templates for a business plan, cash flow forecast, PCI SAQ, and assistance with risk mitigation. Our templates are thorough enough to guarantee compliance with regulations as strict as those in the UK.
Aside from those basic templates, however, here’s a breakdown of some of the main elements to keep in mind as you start the application process.
One of our requirements for all of our new clients, whether they're in the US or the UK or any other part of the world, is a business plan. We provide them with a template for a high-risk business plan that has never been declined. As part of our process, we offer this to all of our partners and it is thorough enough to ensure it's compliant.
1. Work With a Payment Expert
As mentioned before, there are many providers on the market, and it’s often hard to differentiate the quality ones from the low-quality ones if you’re new to the world of high-risk businesses.
So, it’s important to do your research.
Opting for the quickest offer available might be tempting at first, but the quickest option isn’t always the best, especially in the long run.
While there might be exceptions, providers who offer fast approvals likely have to pinch pennies elsewhere.
The same goes for cheaper solutions. While you might get a bargain on the upfront costs, you’ll probably discover some hidden fees sooner or later.
Hence, reading actual customer testimonials, researching the provider’s track record, and communicating your expectations and needs clearly will help you along the way.
2. Edit Your Website to Cater to Approval Factors
Another thing to keep in mind is to make sure your website is up to date. This plays a big part in being compliant, which directly impacts approval odds and your approval timeline.
So, review your website’s policies, showcase licenses and lab tests if needed (for cannabis-related businesses, for example), set up age restrictions, update outdated information, and keep your site user-friendly.
Doing so demonstrates to your provider that you’re on top of all things high-risk related, which helps build trust from the get-go.
The compliance part of the approval process typically takes the longest and involves a lot of back-and-forth emailing, so you’ll be saving time and energy for both parties if you come prepared.
3. Prepare Thorough Payment Processing Statements
One of the first things you’ll be asked when applying for a UK high-risk merchant account is about your processing volumes and transaction history.
Typically, screenshots of your transactions, including monthly volumes, refunds, and chargebacks of the last three months, will be enough.
This will help the processor assess the risks you face and how you’ve handled them so far (i.e., demonstrating how you’ve dealt with the UK’s changing laws and relevant issues specific to your industry give them peace of mind—understandably so).
4. Get Your Documentation Ready for Card Acceptance
Once you’ve gone through the pre-check part of obtaining a high-risk merchant account, you’ll need to gather all the necessary documentation.
In our experience, this stage of the process is often delayed due to the merchant’s lack of preparation.
So, to get a head start, it’s wise to collect all the information beforehand. Do note that the types of documents needed might vary depending on the industry you’re in, though.
For instance, UK-based gambling establishments require separate licenses if they operate beyond borders. Thus, having an overview of what’s needed from your side will help speed up the process, too. If you’re unsure, consult your payment processing provider, as they should be able to help.
5. Partner with the Best Merchant Service Providers in the UK
One of our last (but best) tips is to work with the best provider you can find!
By partnering with FastoPayments, for example, you’ll get an expert opinion based on years of trial and error turned into success stories, along with a professional support team available 24 hours a day.
In addition, we provide our merchants with specially tailored fraud and chargeback prevention tools to reduce the risks.
Keeping ourselves up to date with the regulatory changes in the UK is one of our top priorities, as it is often one of the more challenging regions to navigate.
6. Familiarize Yourself with the Fees for High-Risk Merchant Services in the UK
While this tip might not help you improve your chances of approval, it’ll make your life significantly easier one you do get approved — pricing.
We value transparency, which is why we’ve always offered a very open pricing structure that we discuss with our merchants before they sign the contract.
Here’s a breakdown of our fee structure, which applies to high-risk merchants in the UK as well as anywhere else in the world:
MDR: Percentage fee per transaction that’s deduced immediately from the funds prior to being released to your main account, IC++ (interchange), which means that the card scheme and issuing bank take their cut from that
Authorization fee: Acquiring fee per transaction, to whether approve or decline a payment
Refund fee: Fee per refund that’s initiated from the merchant side to reimburse a purchase
Chargeback fee: Fee caused by a chargeback that has gone through since that is a preventable situation
Rolling reserve: “Involuntary” savings that are collected over time to cover unexpected costs in case of collateral damage like bankruptcy
Transaction fee: Fee per transaction on the high-risk gateways side, which gets deducted regardless if the payment goes through or not
3DS fee: Transaction fee to activate the use of 3DS
Set up fee: Start-up fee charged before the solution provider takes on a deal if it’s on the higher risk side OR a setup fee which will be charged after getting your merchant account approved by the acquiring bank
Monthly fee: Recurring fee for the high-risk gateway services, including activation, monitoring, and maintenance
Dormancy fee: Fee charged after 3 months of inactivity on the merchant’s side
One of the best approval tips we have for high-risk UK merchants? We always require businesses to have a cash flow forecast. If a company doesn't have that, it's a red flag that they might not be ready to proceed with the rest of the process. At the very least, you should understand your expenses as you prepare to set up payment processing solutions and fully launch your business.
The Best High-Risk Merchant Accounts for Instant Approval in the UK
The best high-risk merchant account provider for timely approval will have the needed experience, knowledge, and understanding of the issues caused by strict UK-specific regulations.
This calls for more than just surface-level knowledge; it requires someone who actually deeply understands the ins and outs of high-risk industries and can offer tailored solutions. Ultimately, it’s an individual process for each business, so a provider who can take a personal approach is the one who’ll be worth it.
We believe that’s FastoPayments, where we’ve built our services to cater specifically to the UK’s main high-risk industries.
We have years of experience under our belts, which has helped us design a suite of services for each of the businesses we work with. Despite our success (or perhaps because of it), we still put our best foot forward and tailor every experience specifically to the merchant we work with.
The services we offer to UK-based high-risk merchants include:
- High-risk gateway
- Merchant accounts
- Acquiring
- Load balancing
- Transaction monitoring
- Risk assessment and mitigation
- Real-time chargeback alerts
- Fraud prevention
- Tokenization
- Maintained compliance
- API integration
- Data encryption, along with other enhanced security measures
- 24/7 support
Get UK High-Risk Merchant Services with FastoPayments
For merchant account and payment gateway solutions from a provider who understands the needs of your high-risk business, get a free, no-obligation quote for a high-risk merchant account and payment gateway here.
We’ll review your business information and get back to you ASAP.
