It’s not uncommon for folks to confuse the terms merchant account and payment gateway. While these phrases may sound alike, they’re actually vastly different. In our modern age, where e-commerce and digital payments have become the norm, it’s crucial to clearly understand the intricacies of these financial tools. So, let’s venture deeper into the intricate web of merchant accounts versus payment gateways. 

However, we will also delve deeper into high-risk businesses and their approach to credit card processing. Such businesses face special considerations and challenges in managing financial transactions that you will gain more insight into through this piece.

Understanding Merchant Accounts

A merchant account is essentially your business’s dedicated bank account. These accounts have been in use since the advent of credit card payments in physical stores, but they also play a significant role in the world of e-commerce and are closely linked to the previously mentioned payment gateways. Merchant accounts are the final stop in the journey of processing payments. Typically, payments are encrypted and authorized through an open banking payment gateway, after which the funds find their way into your business’s designated merchant account.

In the realm of merchant accounts, there are two distinct types: dedicated and aggregate. If you’re a high-risk business owner, it’s essential to opt for a dedicated merchant account. This is because your high-risk status would generally prevent you from using an aggregate merchant account. Dedicated merchant accounts are tailor-made for your specific business, ensuring that your high risk payment processing rates are customized to align with your business’s unique risk profile. This specialization is key in managing the intricacies of a high-risk enterprise, providing a reliable and secure financial backbone for your operations.

Understanding Payment Gateways

Payment gateways serve as the digital conduits that facilitate online transactions by authorizing and securely transferring a customer’s credit card payment details. These gateways play the crucial role of acting as the middleman between your business and an acquiring bank, ensuring that the funds are processed and then smoothly deposited into your business’s bank account. Some of the leading e-commerce platforms out there come equipped with integrated payment gateway solutions, making it effortless to accept credit card payments.

However, if your business falls within the high-risk category, choosing an ordinary payment gateway from the start could prove risky as this will almost surely lead to frozen accounts and interruptions of credit card sales after underwriting processes are conducted. Instead, opting for something with more stringent requirements might be preferable if that’s where your business sits. To navigate this challenge, businesses in high-risk sectors should take proactive steps by choosing high risk payment processing solutions like those offered by This way, the payment gateway has a stable and secure channel to direct your payments, ensuring a smoother and more dependable financial operation.

What Should your High Risk Business Choose?

Determining whether your business falls into the high-risk processing category is a crucial first step before delving into the decision between merchant accounts and payment gateways. This assessment becomes particularly important when you’re embarking on an e-commerce venture, as popular and easily accessible payment processing solutions decline to approve your payments once they deem your business to be high risk during their underwriting process.

To gauge whether your business could be classified as high risk, consider the following factors: 

  • Are chargeback rates for credit card transactions notably high within your industry? 
  • Does your business rely on a subscription-based or continuity billing model? 
  • Do your products or services come with a substantial price tag? 
  • Does your industry bear a certain degree of stigma, such as gentlemen’s clubs? 

If any of the answers to any of the following questions resemble yes or “maybe,” then your business is operating at risk. Luckily, provides custom payment processing solutions tailored specifically for high-risk companies such as yours. These services, with their credit card processing and iGaming solutions can assist you in navigating the challenges of your industry and ensuring smooth payment processing for your business.

Final Thoughts

If your business involves high risk activities, chances are high that a payment processing solution for high risk accounts will be necessary. Due to increased credit card chargeback risk and associated increased processing rates. When you opt for a such an, the acquiring bank responsible for its setup employs a strategy called a rolling reserve. This entails withholding a percentage of each transaction for a predetermined period, acting as a protective measure.

The good news is that companies like offer high risk businesses just what they need with solutions like high risk payment processing, credit card processing, open banking payment gateway and more.