Choosing the right merchant account for your business can be a balancing act. For those needing to implement a subscription billing merchant account, there are multiple considerations to consider when establishing this relationship.

Anytime there is a continuity billing option, there are associated challenges. For businesses requiring subscription billing merchant accounts, they often are labeled high risk. This label previously made it more difficult to get a merchant account that helps ease the merchant-processor relationship.

To create a smooth process setting up a subscription billing merchant account, businesses must first establish what risks exist in their business, how they can still establish a merchant account partner that is willing to take on the relationship and determine what factors they should look for in a processor.

The Evolution of the Subscription Billing Merchant Account Industry

By 2017, the on-demand economy had grown into a $75 billion-dollar market — a 58% increase from 2016. By the end of 2018, it’s estimated that 58 million consumers will be part of this market — a figure that is anticipated to grow to 93 million by 2022. What’s triggered this growth is a combination of three factors: Technology advancements in the payments industry, the evolution of the smartphone market and heavy consumer appetite for more convenient methods to pay for goods and services.

The on-demand economy and the rise of subscription billing has also been impacted by what’s been commonly referred to as the “Uberization” of the consumer market. Instead of worrying about continually paying for the delivery of a good or service on a regular basis, technology has reduced the payment friction from the process. The advancement of payment processing technology has propelled the on-demand experience to virtually every industry.

Consumers can now hail rides, buy groceries, pay bills, and order goods to be delivered instantly without having to pull out a credit card or think about the payment process. From both a convenience and security standpoint, this has helped the demand for this type of technology fuel an entire industry itself. The development of better payment methods has paved way for the need for subscription billing merchant accounts to keep up with managing massive market growth.

High Risk Businesses Needing Subscription Billing Merchant Accounts

As consumers have bought into this new, convenient payment business model, businesses have increasingly relied on subscriptions as their primary revenue source. The continuity billing option market, however, has also been tied to negative multi-level marketing schemes that overbill consumers for goods and services they may no longer regularly need. This is where managing a subscription billing merchant account can be a balancing act.

The trick to overcoming this negative perspective some consumers have cast over the industry is having the right payment partner who can help establish a better, more transparent relationship between a merchant and their customer. The right processing partner helps merchants overcome the “high-risk” label and manage to get a merchant account without any unnecessary hassle. Establishing a positive payment process comes down to knowing what to look for in a payment processor.

The term “high risk” refers to services associated with the types of goods and services that have charges more likely to be disputed. An increase in disputes complicates the payment processor relationship. This includes industries like pharmaceuticals, travel, legal services, dating services, computer software, credit repair services, electronic, and financial investment services. There are many subscription and on-demand services that fit within these industries, which has made it easier for businesses to find a payment processor willing to work with them.

Choosing a Processor to Enable a Subscription Billing Merchant Account

Any service that has a higher probability to have a charge disputed with a credit card company is more likely to be labeled “high risk.” Businesses associated with these types of goods and services may think this impacts their ability to get a merchant account, but that’s no longer the case in today’s diverse payment industry. As the on-demand subscription market continues to evolve and gain more traction, there will consequently be more payment processing partners willing to take on these relationships.

Since “high risk” businesses are more likely to have charges that are disputed, merchants should also look for a payment processing partner that has an established model to manage the chargeback process. Excessive chargebacks can cause legitimate businesses to be considered high risk, and having chargeback prevention tools can help businesses alleviate a complicated and costly problem. Knowing how to proactively tackle this payment challenge can make the entire merchant-processor relationship smoother.

The rise in popularity of subscription billing models has also caused an increase in processing partners willing to work with “high risk” businesses. Establishing the right payment processing partner is about one that enables a frictionless experience for both you and your customers. The on-demand, subscription model today was fueled by the convince it provided consumers. The same type of experience should be mirrored in the merchant-processor relationship. A high risk merchant payment processor services as the gateway between the customer, the merchant and the bank/issuer. This is why merchants must find a solution provider that values trust, transparency, and speed.

Businesses needing a subscription billing merchant account must also find a processing partner that can tailor their tools and services to a diverse set of clients. Businesses also need a partner who can growth with them as the subscription economy and payment technology market evolves. Future-proofing payment processing means enabling payment experiences beyond just credit cards. Customers who value the convenience of the on-demand, subscription experience also value more innovative payment methods. This includes businesses who can enable ACH, mobile, digital and recurring payment methods. The right partnership can help keep transaction fees lower and payment processing faster.

Subscription billing merchant accounts may put a business in the “high risk” category, but this shouldn’t deter any merchant from finding a payment processor that enables a positive customer relationship. The right high-risk merchant processor can offer merchants a better more streamlined path for business owners to get their own services up and running smoother and faster so they can serve their customers better.

Get A High Risk Merchant Account


Anna Kragie is a content contributor for SMB Global. She previously wrote for, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.