Yes Authorize.net can work for some high-risk businesses, but there is an important distinction many merchants actually miss. Authorize.net is primarily a payment gateway, and it is not actually the acquiring bank. Whether a high-risk business gets approved totally depends on the underlying merchant account provider and the acquiring bank that is connected to the payment gateway that you are going to use with your website.
Many standard payment gateways that you see in the market are basically designed for low-risk businesses, such as such as e-commerce stores, SaaS companies, or local service providers. If any merchant is operating in industries such as adult content, nutraceuticals, vitamins, crypto, gaming, forex, IPTV, sports book, travel, debt collection, or subscription re-billing, then merchants should ideally approach a high-risk payment gateway provider, because such industries are not fit for traditional setup.
If you are using a low-risk payment service provider for your high-risk business, then the chances are that your application will be either declined or they will ask for a very high rolling reserve, or sometimes if they approve the account, they will place your account on hold or even terminate the account when the volume increases. This is the key reason why high-risk businesses, they usually prefer to go via the underwriting through a high-risk PSP.
The good news is that Authorize.net as a gateway can work very well with certain high-risk merchant account providers. Yes, many acquiring solutions that connect easily with Authorize.net gateway can be used in such situations. And as a matter of fact, many of well-known providers in the industry consider Authorize.net as a preferred payment gateway because it is not very expensive, plus it comes with phenomenal features, such as support for recurring billing, easy API integration, support for multiple e-commerce platforms, even they give you an access to a virtual terminal, they also give you the facility to utilize the invoicing feature, and the Authorize.net gateway definitely comes with a comprehensive fraud management toolset.
Businesses that are already using WooCommerce, Magento, or custom subscription systems, or even legacy billing software, they often prefer to work with Authorize.net and this is because it offers a broad compatibility and an extremely developer-friendly ecosystem.
But once again, we would like to highlight that the approval totally depends on the processing history, industry, chargeback ratio, geographical exposure, business model, traffic source, and compliance documentation. You must structure your merchant account setup in the right way, and you can do this by working with a payment gateway company that comes with enhanced chargeback prevention tools, does offer you clear billing descriptors, has got highly effective fraud filters, and the underwriting team performs strong KYC analysis.
Another factor that makes Authorize.net as a preferred gateway for many businesses is that they allow you to add multiple MIDs on the gateway. Yes, you can have multiple merchant accounts issued via different acquirers and then utilize the same Authorize.net gateway for processing payments. At QuadraPay, we help merchants find the right payment gateway solution which matches their risk profile and business structure.
In many cases, the gateway itself is not a problem. However, the real challenge is finding the right acquiring partner that truly understands the high-risk industry in which the merchant is operating. Remember, a properly structured setup can actually provide a very long-term stable solution, it can also offer better approval rates, and eventually provide smoother growth to the merchant as the transaction volume increases.
Now, for our merchant account forum members we have a question to you
Which high risk merchant account works well with Authorize.Net payment gateway? Drop your answers below.