California here we come, right back where we started from… That sweet refrain still echoes for many travelers trekking to the Golden State. (You may also hear them crooning about hearts left in San Francisco long ago.)

The name California derives from a mythical island paradise inhabited only by beautiful Amazon warriors and ruled by Queen Calafia, as told in a popular Spanish novel from 1510. Exploring for Spain in 1542, Portuguese-born João Rodrigues Cabrilho and his chief pilot Bartolomé Ferrelo were the first Europeans to set foot on what is now California.

Many today still consider California a paradise on earth — including ecommerce merchants in the Golden State. After all, contributing to California’s economy (the sixth largest in the world, surpassing France in 2015) is a noble ambition.

Contributors include high risk ecommerce merchants who often face difficulty landing a merchant account. Without the ability to arrange for high risk merchant processing (in California or elsewhere), achieving ecommerce success becomes more of a nightmare than a dream.

If you’re a merchant trying to land high risk merchant processing to achieve your dreams, keep reading for a few tips to help you do it.

Understanding the “High Risk” Label

Being labeled high risk can be confusing for new merchants, especially for those with stellar personal financial history and a solid credit score.

Yet many different types of perfectly legal businesses that don’t appear to have anything in common — like online dating sites, psychic and occult services, and online travel sites — are labeled high risk.

Keep in mind that the high risk tag represents a service provider’s point of view. Credit card brands, banks, and some payment processors rely on risk management capabilities to remain profitable.

Ecommerce signifies risk because of the inherent CNP (card not present) payment environment, which carries increased fraud risk. And certain CNP industries experience higher chargeback rates and more fraudulent activity than others.

Both represent higher costs and potential losses to the service providers. In some cases, industries are simply banned. For example, credit card brands and some banks prohibit adult-oriented and casino, gambling, or gaming sites due to both financial and reputational risk.

5 Tips to Streamlined California High Risk Merchant Processing

To operate a business, you need a banking relationship; yet to establish and retain one, banks expect to see records of a healthy business. Follow these tips — and important business practices — to obtain and manage your high risk merchant processing account:

Tip 1: A robust, complete, and up-to-date business plan.

A professional business plan helps establish credibility. Be sure to include key sections like:

  • Analysis of your industry and competition
  • Revenue model
  • Sales and marketing plan
  • Key business processes
  • Expected return on investment (ROI)

Update the plan annually, or when a major change occurs in your business environment.

Tip 2: A healthy processing history and strong financials.

When applying for a new, replacement, or additional merchant account, a track record of at least six months of operations is best. Ideally, processing results tie to your business plan. Keep good records, and retain digital sales and shipping records in a secure and convenient location.

Much like when applying for a personal loan or mortgage, expect your business life to be scrutinized. Banks and processors want to see that you have a solid business plan, standard financial and inventory management reports, and repeatable professional business processes.

Tip 3: Professional operating controls:

Strong businesses include key recurring processes and internal controls systems. These should address financials, inventory management (when relevant), security (think PCI compliance), and ongoing management reporting.

Provide evidence that the Key Business Processes outlined in the business plan are operating well.

Tip 4: Low Chargeback rate.

All merchants will incur some chargebacks, but to develop (and protect) your healthy processing history as required by a merchant bank, your chargeback rate must be low (under 3%).

Steps you take with your website, business processes, and the data generated during online transactions are your best defense against fraud-related chargebacks and deserve your time and attention.

There’s a clear link between maintaining a low chargeback rate and good business processes. Yours should include:

  • Excellent customer communication… to include email confirmation of orders and shipments.
  • Employ an easy-to-use payment process that includes appropriate security measures.
  • Make sure your billing descriptor is recognizable. Use your business name.
  • Have a robust, recurring process to screen your payment gateway for fraudulent transactions.

Tip 5: Ensure Your Ecommerce Website Employs Best Practices.

Ecommerce merchants can reduce or prevent CNP fraud by adopting appropriate website policies and best practices.

Because there’s really nothing friendly about fraud of any sort, check out this discussion of anti-fraud measures to implement on your ecommerce site. They’ll help protect your business.


California high risk merchants can get merchant accounts, and MerchACT would be delighted to help you land them. If you’re looking for California high risk merchant processing solutions, let us help.

We have relationships with banks and others in the industry, and will leverage them to ensure your e-commerce business can process payments seamlessly with high risk merchant processing. You have plans and dreams, and deserve a chance to achieve them.

MerchACT helps merchants all over California to obtain streamlined, reliable, and affordable high risk merchant processing solutions. Once we understand your unique objectives, growth plans, and processing needs, we’ll recommend solutions to help you too.

After decades of payment industry experience, and fifteen years of working with high risk ecommerce merchants across the gamut of high risk industries, we understand both the complexities of ecommerce and the unique challenges you face.

We’d delight in helping you grow — from start-up status to successful company — and beyond. We’ll take care of managing as much of the high risk merchant processing as you’d like, while you focus on marketing the business, and boosting your bottom line.