What Does Stripe Consider a High-Risk Business?
Stripe, the payment processing company that enables your customers to pay for your products, has some criteria for what it considers a high-risk business.
What Does Stripe Consider a High-Risk Business?
High-risk businesses are those that pose the highest risk of chargebacks, fraud, and other bad behavior.
Stripe considers these businesses high-risk:
* Adult content (including sex dolls and sex toys)
* Cannabis/marijuana-related products and services (this includes hemp-based products) and CBD
* Drug paraphernalia (including pipes and bongs)
* Gambling, including online gambling sites (including sports betting, casinos, and lotteries)
Are you a high-risk business?
Stripe has a set of criteria for determining if you’re a high-risk business. If you think that your business could be considered high-risk, you may want to consider the following:
- Is there fraudulent activity in your industry?
- Are your customers likely to be repeat customers or new ones?
- What is their typical spending amount on average?
Why Are Some Businesses Considered High-Risk?
- The nature of the product or service
- The nature of the merchant
- The nature of the transaction
- The nature of the customer
- The nature of the industry
What Are the Most Common High-Risk Payment Processing Industries?
The most common high-risk industries are gambling and adult. Pretty straightforward, right? If you’re processing payments for either of these industries, you should be wary of the risks involved. But Stripe has also identified some other high-risk business types that may surprise you:
- Discount/Free Coupons
- Foreign Currency Conversion (FCC) Brokers
- Marketplaces/Marketplace Product Vendors
These businesses are considered high risk even if they aren’t explicitly adult or gambling. The reason for this is that many people who deal with these types of companies have been scammed before, and so they’re warier than they would be with a typical eCommerce site.
Stripe is a payment processor that helps you accept payments through your website. They have a lot of rules about what kind of businesses they will work with, and it’s important to know what those are before you sign up for their service.
Here’s the list:
Stripe doesn’t work with businesses that sell alcohol or tobacco products, adult entertainment, guns or ammunition, political campaigns or certain political advocacy organizations, financial services or other regulated industries (like healthcare), or any business that sells knives or weapons (excluding paintball markers).
Your business has to be located in the U.S., Canada, the EU or Australia.
You have to have a physical address in one of those places too— so no PO boxes.
What Can I Do to Reduce My Risk of Fraud and Chargebacks?
In the meantime, there are some things you can do to reduce your risk of fraud and chargebacks:
- Use a payment gateway like Stripe. This service adds an extra layer of security by validating your customer’s credit card information and blocking payments from potentially fraudulent accounts. It also automatically handles chargebacks, so we’ll take care of all that pesky paperwork for you!
- Use a payment processor like PayPal or Square. These services give you more control over how many processing fees you pay, who your clients are (and what types of businesses they’re running), and how long it takes for funds to get deposited into your bank account. The downside is that these companies will hold onto customers’ money until the transaction clears—which means longer wait times between when someone buys something from you and when they actually receive their product or service.
- Use an anti-fraud service (like Riskified). These services protect both buyers and sellers by reviewing every transaction individually before approving it (or declining it). They’ll tell customers whether their purchases were fraudulent based on data collected from past buyers’ behaviors; this way neither party has any surprises! Plus if anything goes wrong during delivery then Riskified will refund any losses incurred due to poor packaging practices etc…
Taking Steps to Reduce Your Risk as a Merchant
If you’re a high-risk merchant, there are some steps you can take to reduce your risk and increase the likelihood of getting approved.
- Use a fraud prevention platform
- Use a payment processor that supports Stripe Connect
- Use a payment processor that supports Stripe Radar
- Use a payment processor that supports Stripe Atlas
- Use a payment processor that supports Stripe Checkout
Stripe has Criteria for What It Considers a High-Risk Business. You Can Reduce Your Risk as a Merchant.
Stripe has criteria for what it considers a high-risk business. You can reduce your risk as a merchant.
In order to create a payment account on Stripe, you have to provide information about your business and financial history.
Stripe has decided that some businesses are at higher risk than others and requires more information from those merchants before they can accept payments through Stripe.