High Risk Merchant Account In Europe

High-Risk Merchant Account In Europe: Insider’s Guide.

Running a business that is labelled high-risk by mainstream payment processors in the europe can be challenging, especially when it comes to accepting credit and debit card payments. A majority of sponsor banks and payment processors in Europe prefer to only work with low and mid-risk merchants. This makes it hard for struggling high-risk businesses.

Certain industries like online gaming, adult streaming, adult dating, adult toys, CBD, hemp, and vape all face challenges from low-risk processors when it comes to credit card processing account approval. With a local high-risk merchant account in Europe, businesses from many of these industries can start accepting credit and debit card payments.

A High Risk Merchant Account In Europe is a comprehensive payment processing solution for struggling businesses. These accounts can help businesses easily accept credit card payments while efficiently managing chargebacks. The team at QuadraPay has extensive experience in assisting businesses from various locations, including Europe, with credible high-risk merchant accounts.

In this comprehensive guide, our team answers all potential questions that you may have regarding obtaining a high-risk merchant account in Europe. It also discusses various strategies that can help you easily get approved for such accounts. It is a must-have for any e-commerce business looking to get approval for a high-risk payment gateway in Europe. Let’s begin.

What Is a European High-Risk Merchant Account?

Comparison of Low-Risk vs High-Risk Merchant Accounts (Europe)

Disclaimer: The features and fees outlined above are general estimates based on industry averages in Europe and may vary depending on the payment processor, acquiring bank, business model, industry type, risk profile, and geographic location. Always consult with your payment service provider or acquiring bank for exact terms and conditions specific to your merchant account.

A European high-risk merchant account is a specialised credit card processing account offered by an EU-based acquirer. These accounts are best suited for businesses operating in certain industries or circumstances that are deemed high-risk by most mainstream payment processors, such as Stripe and PayPal.

The fundamental reason behind the high-risk classification of certain merchants is primarily the industry. However, other factors, including the potential for high chargebacks and regulatory scrutiny, as well as the requirement to accept payments from outside Europe, can also be contributing factors.

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Industries Commonly Deemed High-Risk by European Payment Processors

European payment processors apply strict scrutiny when they evaluate merchants for high-risk accounts. Certain industries are always flagged due to high chargeback ratios, regulatory complexity, or reputational challenges. Businesses in these sectors often face more strict onboarding requirements, higher processing fees, and additional conditions such as rolling reserves or compliance certifications. Below is a breakdown of key industries that are commonly categorised as high risk across the European payments landscape.

Games of chance and skill competition businesses are considered high risk in Europe. This is due to the potential for high chargebacks and fraud risk. Businesses operating in the gaming industry must have the relevant licenses. In most cases, merchants are unable to secure these accounts on favourable terms. They may have to pay slightly higher transaction fees and might also have to accept rolling or fixed reserves.

The adult industry is no longer limited to video sites; it has evolved into a substantial e-commerce sector. Unfortunately, anything associated with the adult industry is considered high-risk in Europe and, in fact, almost everywhere, including Australia, New Zealand, and even in high-risk-friendly nations like Cyprus. Getting a merchant account has become difficult for European companies that sell adult novelties, magazines, audiobooks, and wellness products.

Any business selling herbal, pharmaceuticals, nutraceuticals, or skincare products is considered high risk. These industries are subject to strict product evaluation and proactive monitoring. Businesses operating in these sectors must have lab certificates and the required licenses to sell RX items. In the case of online medicine sales, merchants dealing in peptides and research chemicals must have LegitScript certification.

Any business involved in direct selling is naturally considered high-risk in Europe. These businesses have historically shown higher risks of fraud and chargebacks. Pushy sales tactics in direct selling are a well-known concern.

Businesses associated with the financial services industry are also considered high risk. This includes Forex trading companies, cryptocurrency exchanges, money service businesses, and trading coaches. Such businesses are deemed high risk due to regulatory uncertainty and the potential risk of financial crimes.

Any business offering travel and hospitality services with delayed delivery is considered high risk. This is because services are typically rendered at a later date, leaving room for customers to dispute transactions or request refunds. Businesses in the travel industry, such as airlines, cruise lines, travel agents, tour operators, and hotels, face challenges in obtaining stable merchant accounts.

Businesses selling alcohol and tobacco products are considered high risk in Europe due to potential health risks and stringent regulations surrounding their sale. Merchants selling such items must have the required licenses. For example, anyone selling cigars and tobacco must possess a tobacconist license. In some cases, a public health license may also be required.

Merchants in certain industries are required to pay a high-risk registration fee, which is a recurring annual fee. The merchant ID (MID) gets registered with the card scheme.

For sustainable growth in Europe, a local high-risk merchant account is the only viable path.

Some high-risk merchants operating in the European Union or the UK or the European Economic Area get frustrated and choose offshore payment solutions. While those options may be available, it is extremely important for merchants to understand the key differences between European Union-based acquirers and offshore processors. While offshore merchant accounts, such as those that are found in Asia, LatAm or Africa, may sometimes seem attractive due to the perceived laxity, they definitely come with significant drawbacks for Europe-based businesses.

One of the most challenging things that merchants in Europe experience with these offshore payment processors is high decline rate. Transactions that originate from Europe and go to an offshore bank most of the time immediately raise red flags with card issuers. That leads to more fraudulent decline flags and lost sales.

Many of these offshore payment processors are lazy in making the settlements. And there is another challenge, which is that moving money across continents and through correspondent banks can definitely add 3-5 more business days to the settlement process. This delay can put your business in a financial crunch and that is why it is not recommended.

Another challenge is the currency conversion cost. When you use an offshore merchant account, then they will charge expensive FX fees because they will be settling in a foreign currency. If your business model works on a tight margin, then this FX conversion fee can be very expensive for you.

Offshore jurisdictions can change their law or sometimes such banks even get their banking licences revoked abruptly, which leaves the merchant’s funds frozen. It may take months or even years for merchants to get their money back.

Now let us look at the QuadraPay advantage, which brings to you local European acquiring solutions. When you get a merchant account for your business through an established bank or payment service provider within the European Union, UK or European Economic Area, this simply means that you will be getting faster settlement. Our acquiring partners make SEPA transfers; that means you will get funds into your European business bank account within 1-2 business days from the time when the processor sends it to you.

You will have higher trust and better approval rates with the domestic European acquirers because the transactions are viewed in a more favourable way by the fraud system.

Beyond this, VAT and regulatory compliances can also be easily handled if you work with European payment service providers.

In simple terms, a European merchant account for low-risk as well as high-risk business can be extremely better when you compare it with the offshore solutions. You should search for offshore solutions only if you have exhausted all the European Union-based options.

EU High-Risk Business Categories: Where Does Your Industry Stand?

The payments industry including leading card brands categorises certain business verticals as high risk, especially due to legal complexity, regulatory scrutiny, or reputational sensitivity.

• Tier 1: Adult content, escort services, gambling, online pharmacies
• Tier 2: Crypto exchanges, cyberlockers, skill-based games
• Tier 3: Forex/CFD platforms, outbound telemarketing, negative option billing, tobacco

Merchants in these sectors must demonstrate robust compliance practices, strong fraud mitigation systems, and full transparency during onboarding. Approval is never guaranteed. The application review is thorough and often time-consuming. Patience, complete documentation, and a willingness to adapt to acquirer or PSP requirements are essential for long-term success.

“In the high-risk world, it’s not about shortcuts, it’s about showing you’re built to last.”

Key Features of Better High-Risk Merchant Accounts in Europe

Support for Multiple Local European Currencies: Although the euro is the primary currency in most European nations, businesses cannot ignore the importance of allowing customers to pay in local currencies. The euro is common in countries like Germany, France, and Spain; however, businesses in the United Kingdom must accommodate the British pound (GBP). Similarly, businesses operating in Switzerland need to process payments in Swiss francs (CHF), while those in Norway require the Norwegian krone (NOK) as their processing currency. A local European high-risk payment processor can offer a wide variety of European currencies for both processing and settlement.

Localised Payment Methods: European consumers prefer region-specific payment methods. A good high-risk merchant account must enable customers to make payments using various local options, including SEPA Direct Debit, which is widely used in the Eurozone. Payment methods like Sofort and Giropay are very popular in Germany and Austria, while iDEAL dominates in the Netherlands, and Bancontact is essential in Belgium. By offering local payment methods, businesses can significantly increase conversion rates and enhance customer satisfaction.

VAT-Compliant Reporting: A robust merchant account solution must adhere to mandatory tax compliance reporting. For example, a European high-risk merchant account must account for Value-Added Tax (VAT) regulations, which vary by country. Automated VAT calculation is essential for EU nations like Italy, Sweden, and Portugal. Comprehensive reporting features can help merchants prepare VAT filings and generate transparent invoices, ensuring compliance with local European tax authorities.

Fraud Prevention and Chargeback Mitigation: European high-risk payment gateway providers must have experience supporting businesses from industries such as gaming, CBD, and travel, which often experience higher-than-average chargeback rates. A good merchant account should include 3D Secure Authentication (3DS2), a requirement under the European Union’s PSD2 regulations. Payment processors should use fraud detection tools capable of identifying both local and international transaction patterns to efficiently prevent fraud. Additionally, integration with chargeback dispute resolution services is crucial for reducing overall chargeback percentages.

International Payments: European businesses often accept orders from customers worldwide, making it vital for payment processors to support transactions from regions such as North America, Latin America, and Asia. However, merchants should maintain the majority of their traffic from within the European Union. A good payment processor should also offer dynamic currency conversion, displaying prices in customers’ local currencies to increase conversions and boost customer trust.

Competitive Transaction Fees: Credit card processing rates for high-risk businesses are not uniform across Europe. If a merchant obtains an account directly from an acquirer, they can expect lower fees. However, solutions involving multiple intermediaries may incur additional markups. Generally, high-risk credit card processing fees in the EU range between 2.5% and 5.9%.

It is worth noting that transaction fees for payments within the European Union are typically lower than those for transactions outside the EU. For example, an e-commerce grocery store in Finland with 100% domestic traffic or a food delivery app in Sweden with only Swedish customers may qualify for more economical pricing.

Robust Payout Options: Merchant accounts can only hold funds temporarily, so payment processors must facilitate timely transfers to the merchant’s business bank account. European payment processors offer various payout options, including SEPA transfers in the Eurozone and local payouts in GBP for UK customers.

Customer Support with Local Expertise: High-risk businesses in the European Union should partner with payment processors that understand local markets. Multilingual support in languages like English, German, French, and Spanish is essential. Providers should also be familiar with country-specific regulations, such as the French tax system or the UK’s FCA compliance standards, to offer tailored solutions.

More Than Processing: Strategic Tools for Your Growth

When you work with QuadraPay, then getting a merchant account is just the beginning. We will provide you with a suite of advanced tools that are designed to protect your business revenue and make your operations smooth. Our solutions will also help you to expand your business across Europe and beyond. Some of the tools that we can offer to you are listed below.

Advanced Chargeback Prevention Suite:

With this addition to your merchant account, you will go beyond basic monitoring. This will include intelligent alerts; that means you will get notification of a potential dispute before it actually becomes a chargeback. It will allow you to use the refund capability and resolve the issue directly with your customer.

With the same tool, you will be able to provide evidence if you want to fight the chargeback case. This includes information such as IP address, delivery confirmation, and customer communication. All of these details you can submit into the chargeback management suite and it will help you to fight fraudulent chargebacks.

Multi- MID Processing In Europe:

For large-volume merchants, we can offer you multi-acquirer solutions. As you are well aware, you should not put all your eggs in one basket. We can set up a multi-MID payment gateway where you can add the MIDs from multiple acquiring banks and payment processors. This will help you to improve your approval rate. If one bank declines the transaction, then you can automatically route the transaction to another one. This also helps you to mitigate the risk. By diversifying your processing volume, you will protect your entire business from being shut down due to a volume spike at one particular payment processor’s MID. Our solutions are powered by A-rated processing companies and when you use multiple merchant accounts, then it automatically offers you a failover option.

Subscription Management Tools

Our team can also offer you recurring billing and subscription management services. These are extremely essential for businesses operating in industries like SaaS, adult, membership, and nutraceuticals. These systems can manage tiered pricing, proration, free trials, and dunning. All this helps you to maximise the lifetime value of your customer and reduces the involuntary churn.

Enhanced Data Analysis

Our advanced tools powered by our payment processing partners offer you the capability of data analysis and reporting. You will get deeper insight into your payments with a centralised dashboard. You can track performance based on country, currency, product, and even the acceptance rate. You can use this data to make informed business decisions that will help you to truly optimise the checkout flow.

Required KYC Documents for High-Risk Merchant Account in Europe

The Application Process: A Step-by-Step Guide for European Merchants

The application process to get a high-risk merchant account is not as simple as you’ll expect for a regular account. You must understand each step and you should prepare for a smooth, faster approval.

The first step is pre-qualification and initial consultation. In this stage, you start with the first communication with us. We will discuss your business model, your target market, historical processing volume if you’re already accepting card payments, and your average transaction value. This short communication will help us to immediately identify the most suitable European Union-based acquiring partner for your profile.

The next step is the formal application submission. You’ll complete a detailed application form and submit the required KYC documents as well as industry-specific documents. For your safety, you can submit all these details over a secure online application link, and you don’t have to send any paperwork to us.

Having all documents prepared in advance will help you to speed up the application process. Remember, if your documents are in a different language like French, German, or Polish, then you may have to get them translated into English if it is required by our payment partners.

The next step is underwriting and risk assessment. You can consider this as the core of the process. The underwriters at our acquiring partner’s office will review your business’s financial health. They will check the personal credit history of the directors.

The underwriters will also carefully evaluate your website for compliance and professionalism. Your website should be impressive and must have substantial traffic. It should align with the legal guidelines of your industry.

The payment processing company will also expect you to have a chargeback mitigation strategy. They will evaluate your previous chargeback ratio. The underwriting team will check the legitimacy of your industry licences. This is especially important for businesses that operate in industries like CBD, vape, cigars, tobacco, head shop, online gaming, adult, healthcare, telehealth, and research chemicals.

Next you reach the due diligence and compliance check process. The payment processing company will perform an enhanced due diligence, which will include checks such as AML, KYC, CTF, and so on. They will verify all the documents that you have provided. Remember, you must present clear and genuine documents. If you submit false documents, then your application will be immediately rejected.

Once everything goes well, then you reach the stage which is the terms proposal and agreement. If the underwriting team gets back to you and lets you know that your account is about to be approved, then they will send you a proposal which will outline the specific terms and conditions of the merchant account. This will include details about processing fees and the rolling reserve structure; it can be a fixed rolling reserve.

It will also mention the contract length and the termination clauses. You must carefully review the early termination fee, because in some cases this can be extremely high. We recommend you take 1-2 business days to review the merchant account agreement and then sign on the line.

After signing the agreement, you will get the logins to the payment gateway. The high-risk payment service provider will share the API document and the links to download ready-made plugins. Your team can start the integration process. If you need any assistance, our technical support team will guide you through this phase.

Once the integration is complete, the next step is to go live. Your payment service provider will give you some test card details to complete to perform test transactions. Once you have completed the test transactions, then your gateway will be switched to live mode, and your customers can make the payments to you.

A tip that we want to give you at this stage is that you should never use your own or anyone else’s credit cards to see if your live gateway is active, because this can result in account termination.

Website Compliance for High-Risk Payment Gateway in Europe

For any business seeking approval for a high-risk payment gateway in Europe, it is crucial that the website complies with the merchant processor’s requirements. The underwriting team will carefully examine every section of your website, and if they realise that the website does not meet their expected standards, the application will be declined. To increase the chances of approval, ensure that your website fully complies with the payment processor’s requirements. Here are a few tips:

EU High-Risk Merchant Website Compliance Checklist

Ensure Your Website Is Complete and Functional. As an experienced provider of high-risk merchant accounts in Europe, we have observed many merchants applying for a credit card processing account while neglecting their website’s functionality. Applying for an e-commerce merchant account with an incomplete or non-functional website does not make sense. Ensure your website is fully operational, free of broken links, and features complete, up-to-date content. A fully functional website reflects professionalism and helps underwriters trust your business.

Install an SSL Certificate. Your website must have a valid SSL certificate. This technology secures the browser and encrypts transaction data. If you apply for a payment gateway with a website lacking an SSL certificate, your application is guaranteed to be declined.

Display Products with Accurate Information. All products and services should be clearly listed on the website with accurate specifications, dimensions, and descriptions. Websites that offer detailed product information are favoured by both search engines and underwriters. Conversely, websites lacking clear product information often appear fraudulent or incomplete.

Include a Clearly Defined Shipping Policy. Customers must be informed about the delivery timeline for products. Your website should feature a shipping policy that provides estimated delivery timeframes and detailed information about applicable shipping charges. If you handle international shipping, this information must also be clearly displayed, as international customers may incur higher costs than local European customers. The shipping policy should also outline procedures for delayed or lost shipments.

Avoid Using Copied Content and Images. Payment processors prefer working with genuine companies, and no legitimate business relies on copying content or images from others. Ensure that all content and images on your website are original. If you use images, ensure you have the rights to them. Original content and images reflect your business’s authenticity and professionalism.

Provide Detailed Contact Information. For proper communication with customers, your website should feature detailed contact information. This can be placed on the “Contact Us” page or in the footer section of every page. Include the company name, a valid phone number, a registered email address, and your business address. Payment service providers rely on this information to verify your business. Missing or incorrect details can significantly reduce your chances of approval.

Display the Descriptor Provided by Your Payment Provider. The payment service provider will assign you a billing descriptor, which is the name that appears on customers’ billing statements. Ideally, this descriptor should be displayed on all key pages, such as the footer, checkout, terms and conditions, or billing pages. Mention on your website that charges on customer billing statements will appear under this descriptor name. This transparency reduces the risk of disputes or chargebacks, as customers can easily recognise the transaction.

FAQs About High-Risk Merchant Accounts in Europe

Can Any Business Apply for a High-Risk Merchant Account?

Yes, any business can apply for a high-risk merchant account in Europe. However, it is important to know that the approval of the same depends on many factors, including business documentation, industry, and financial history. The payment processor will evaluate the merchant’s credit score, past chargebacks, business plan, and industry before deciding whether the account should be approved or not. In cases where the payment processor declines the application for credit card processing, the business can explore alternative payment options.

How Does Overestimating Sales Volume Affect Merchant Account Approval?

One of the most important pieces of information a merchant submits on the merchant account application form is the projected sales volume. Many merchants believe that showing a very high sales projection will improve the chances of account approval. In reality, it can work against the merchant, as the amount requested as monthly sales volume represents a credit risk for the bank. If the merchant does not have previous processing history or strong financial standing, this can lead to account rejection. It is recommended to be as realistic as possible when providing this information.

Can Merchants with Poor Credit Scores Get a High-Risk Merchant Account?

Credit history plays a very important role in the account approval process. However, many merchants struggle with less-than-excellent credit scores. Certain businesses may qualify for offshore-based bad credit merchant accounts, which cater specifically to such cases.

Can All Merchants Qualify for a Virtual Terminal?

A virtual terminal allows a merchant to submit credit card details of the customer on an online system and process the transaction. While this feature may be vital for many industries, it is also susceptible to fraud, which is why not every merchant is approved for a virtual terminal. That said, genuine merchants with strong credentials are more likely to qualify for a virtual terminal (VT).

For more information on how Quadrapay can assist with getting a high-risk payment gateway in Europe, contact us at [email protected].