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Your Guide to E-Commerce Credit Card Processing

E-commerce credit card processing is high-risk, meaning that you need to get a merchant account specifically designed for businesses that face high chargebacks, fraud risks, or card-not-present transactions. This comes with many downsides, like higher fees but also some advantages. We describe them further in this guide – read on if you’re about to start up your own e-store!

Credit Card Processing

Is E-Commerce Credit Card Processing High-Risk?

In the introduction, we mentioned that e-commerce credit card processing is high-risk, but is it always so? Unfortunately, yes.

The problem here is that whatever you do, no matter how hard you try, your e-commerce will handle card-non-present transactions. This means that financial institutions will have no choice, but to deem you high risk, even if you manage to combat other decisive factors.

The Pros and Cons of High-Risk E-Commerce Credit Card Processing

We’ve established that your business will be labeled high-risk, so now let’s make it clear: it’s not always a disadvantage. Whilst you will pay more for payment processing services, the high-risk ones also offer some benefits when compared with their low-risk alternatives. So, let’s look at it from both sides – what are the pros and what are the cons?


• Security measures – High-risk credit card processing services are designed to prevent fraud and chargebacks, so they involve the best security measures against these threats.

• Higher chargeback thresholds – Your business may be deemed high-risk because of high potential chargeback rates, which means one thing: your processor actually expects them to be significant. This means that if you do hit these high numbers, you will likely not face any consequences as the thresholds are adjusted accordingly.

• Reduced risk of account termination – Many processors are unreliable and can terminate your account with no reason in a matter of minutes, for instance, by banning certain industries. But, as a high-risk business, this is unlikely to happen. After all, you are deemed risky from the start, so they have no reason to ban your business or industry.

• Flexibility – An e-commerce credit card processing solution gives you more freedom when it comes to the products you sell. Since you are already deemed high-risk, you won’t have your provider putting every single one of your products under strict scrutiny.



• Higher fees – As we have mentioned in the introduction, e-commerce credit card processing is a bit more expensive than low-risk one.

• Processing time – You might need to wait longer for approval for each of the transactions as a high-risk business, so it means that the whole cash-whole process will take a bit more time.

• Reserves – As a high-risk business, you might be required to have higher fund reserves than a low-risk store.

The Takeaway

With all this knowledge about e-commerce credit card processing, you’re ready to start your own online business. Remember to pay attention to your potential processors – the offers can differ significantly, so you ought to do proper research.

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