11 High-Risk Businesses In 2021

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Every business has its fair share of risks, and as the ubiquitous saying, without risks, there are no rewards. However, while it is advisable to take business risks, having a high-risk business is a different ball game entirely. Your company is considered high-risk if it operates in an industry that is regarded as too risky (red zone) or prone to financial transaction issues (grey zone). 

Today’s article will highlight the world’s major high-risk businesses, the factors that make them high-risk, and proffer a solution to the challenges faced by these businesses. 

What Types of Businesses Are Considered High-Risk? 

1. Adult Entertainment 

The adult entertainment industry is considered a high-risk business because of its controversial nature and strict rules and regulations. Also, the industry is susceptible to fraud and chargebacks arising from their customers’ credit or debit card payments. Many of the businesses also receive an extremely high volume of transactions daily. Merchants can also carry a great deal of liability in this line of work from all parties involved. 

2. Casino 

The casino business has a high financial turnover volume that banks and merchant account providers are wary of. There have also been records of money laundering and fraud in the business line. 

3. CBD Oil 

Since CBD oil is consumed for satisfaction and satisfaction is relative, the industry has a high level of chargebacks from customers who do not derive the desired pleasure from some of the manufacturers’ products. Also, it is a high-risk business because of the reputation risks, so banks and merchant account providers are skeptical about having CBD-related companies linked to them.  There is also tighter regulation for cannabidiol now when it comes to product health claims and advertising methods.

4. Cryptocurrency 

The crypto market is a volatile blockchain business with lots of uncertainties. It is high-risk because it is technology-based and prone to theft from cybercriminals. Similarly, because of its volatility, profits are not guaranteed, and losses are inevitable because external factors determine them. 

5. Dating 

Online dating is a huge business all over the world, raking in billions of dollars annually. However, it is high-risk because of factors like fraud, perception, and high chargeback rates. 

6. Nutraceutical 

The nutraceutical and supplement business has been gaining popularity rapidly in recent years, with numerous companies investing in the business line. But due to factors like the possibility of misleading claims, non-governmental control, and high chargeback rates. 

7. Pharmaceutical 

This is one of the most lucrative but sensitive businesses in the world. However, Product liability, counterfeit drugs, patent cliffs, and chargebacks are some of the factors that make the industry high-risk. 

8. MPOS / POS 

POS / MPOS are common payment mediums for merchants. However, MPOS data is not encrypted, making it prone to theft by other apps. They are also used for large volumes of transactions, making the channels high-risk. 

9. Retail / Electronics / Apparel 

A huge hike in the prices of clothing and electronics, bankruptcy, bulky transactions, data breaches, consistent chargebacks, and possible lawsuits from customers are significant business risks faced by the retail, electronics, and apparel industries. 

10. Travel 

Proned to fraud, high chargeback level, high threat of terrorism, legal claims, and reputation risks are some of the reasons merchant accounts are somewhat tricky to get in the travel and tourism industry. 

11. Skill-Based Gambling 

Skill gaming merchants often find it challenging to get a merchant account because they are usually mistaken for online gambling merchants. The belief by others that skilled gamers are gamblers is another reason it is considered a high-risk business. 

Final Thoughts On High-Risk Businesses

As a merchant, you cannot defend yourself regarding the risks attached to your high-risk business and your subsequent inability to get a merchant account. Therefore, you must have a solid strategy in place to avert such issues. The plan in place will help proffer timely solutions when payment-related problems arise. 

If you own any kind of high-risk business, you must get a merchant account to handle payment processing for high-risk business. PurePay offers a unique high-risk payment gateway that will help you accept both credit cards and local payment models seamlessly. We will also connect you to a bank that understands the risks associated with your business.  Whether you want a gateway for one-off or recurring transactions, we will provide you with secure, safe, and fast payment solutions.

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