Shopify Payments Alternatives for High-Risk Businesses

By starting an e-commerce website, you can increase your company’s sales and reach customers in diverse geographic areas. Many businesses start out using convenient e-commerce platforms like Shopify. However, Shopify restricts the types of industries it works with and doesn’t provide high-risk merchant accounts. 

Because of this, it’s essential to find alternative high-risk payment processors for Shopify accounts. With the right payment alternatives, you can easily bring in revenue and continue building your online business without the hassle of frequent account suspensions or holds.

Learn more about high-risk payment alternatives by reaching out to PayCompass today.

TL;DR

• While Shopify is a popular e-commerce platform, high-risk merchants may be prohibited from using Shopify Payments.
• Tobacco, cannabis, adult entertainment, and supplements are just a few of the industries that are banned from selling on Shopify.
• Accounts can also be placed on hold for policy violations, inconsistent account information, billing issues, and excessive chargebacks. 
• Often, chargeback rates that are over 1% trigger an automatic review.
• Because Shopify uses an aggregate method to pool accounts and different risk profiles together, it isn’t ideal for high-risk accounts.
• By being proactive about contacting Shopify and providing important information, you can reduce the length of your account suspension and reach a resolution.
• If you are in a high-risk industry, the best long-term option is to find a high-risk merchant account provider that understands your company’s unique needs.
• PayCompass provides global coverage in more than 170 countries to high-risk merchant accounts. At PayCompass, you can get help with chargeback prevention, fraud detection, and fast underwriting services.
• To ensure a consistent revenue stream and fewer regulatory issues, it helps to work with a high-risk merchant account provider.

Why Does Shopify Put Accounts on Hold?

In just the United States, there are 1,035,000 Shopify stores. Each month, an estimated 2.8 million global users download the Shopify app. 

As a global e-commerce platform, Shopify has to implement rules and restrictions on account operations. If you have a Shopify Payments suspended account, it is likely due to a violation of Shopify’s policies and restrictions.

• Information Requirements: If your account details are incomplete or inconsistent, it can trigger an automatic account suspension. The only way to remedy this issue is to provide the necessary information and documentation as soon as Shopify requests it.
• Incorrect Bank Details: Inaccurate bank details can lead to additional compliance checks and limitations. Until the banking issues are resolved, you won’t be able to use Shopify Payments.
• Chargebacks: Excessive chargebacks cost your business and the issuer money. Each claim has to be investigated. At the end of the investigation, the original funds may be returned to the client. Because of this expensive process, a high chargeback rate can lead to your account suspension or closure. In many cases, a chargeback rate over 1% will instantly trigger an account review.
• Policy Violations: Violating Shopify’s policies, such as the acceptable use policy, can result in your account suspension. For example, some products are restricted from being sold on the app or specific channels.
• Unfulfilled Orders: If you have a high percentage of unfulfilled orders, it may cause a temporary account suspension.
• Regulatory Changes in Your Industry: When laws and regulations are changed in your industry, Shopify adjusts its policies. In some cases, this can result in an account suspension.
• Sudden Changes in Transaction Volume: When your sales suddenly spike in volume, it can trigger an automatic fraud review.
• Payout Issues: Payout issues, such as multiple unsuccessful payouts, can get your Shopify Payments suspended. 

What Should You Do If Your Shopify Merchant Account Is Placed on Hold?

When it comes to finding a high-risk payment gateway, Shopify isn’t a good option. Shopify Payments restricts the type of accounts it uses, so there are many situations where you may need to work with a different payment processor. If your high-risk merchant account at Shopify is suspended for violating policies, having high chargeback rates, or similar activity, it is important to be proactive about resolving the issue and finding a different payment gateway to work with.

1. Pay Attention to Prompts and Emails

After you set up your account, you may receive an email or a prompt in your Shopify admin that says your account is on hold. When this happens, pay attention and follow any instructions given. The in-admin prompt will include information about the reason for the suspension and the steps you should take to have your account reinstated. If you aren’t sure about what to do next, you can always reach out to Shopify’s support team with your questions.

2. Provide Requested Information

If you have a high-risk merchant account on Shopify, you’ll likely be asked to provide additional information. Shopify may need identification, inventory documentation, or your business registration before your account can be set up. Whenever possible, give Shopify this information as quickly as possible. If you do not have the documentation available, call the support line and find out if there is alternative documentation that you can provide.

3. Internally Audit Your Store’s Shopify Compliance

While you wait for an answer, use the time to audit your store’s Shopify compliance. Read through the list of Shopify Payments prohibited businesses. Carefully review Shopify’s terms of service. You should remove any products that Shopify doesn’t allow on the platform. Because there are Shopify app-specific restrictions, you should pay attention to which channel your products are sold on as well.

Then, review your product descriptions. The description of the product should clearly match the product that will actually arrive. If there are any discrepancies, fix them.

4. Follow Any Instructions 

After Shopify finishes reviewing your documentation, it may have specific requests. For example, you may be asked to remove certain products or to rewrite your product descriptions. As soon as you receive any instructions from Shopify, you should be proactive about implementing them.

5. Be Patient

For high-risk payment processors on Shopify, it pays to be patient. While the resolution timeline can vary significantly, it often takes between one and four weeks to resolve a payment issue. Even appeals can take three to seven business days to complete. However, if your freeze is due to billing, you can typically get your account unfrozen as soon as the bill is paid. 

6. Find a Different Payment Gateway

If you’re struggling to operate a high-risk merchant account on Shopify, the best option may be to find Shopify Payments alternatives. Shopify isn’t designed to be a high-risk payment gateway. Persistent delays and ongoing issues eat into your bottom line, so you should start looking for a different payment provider to work with for your e-commerce site.

The Difference Between Aggregate Versus Dedicated High-Risk Merchant Accounts 

Shopify Payments offers aggregate merchant accounts. As the name suggests, this involves aggregating all of the accounts together into a shared risk pool. 

While this means that you can enjoy an easier setup process and Shopify spends less time on risk evaluations upfront, it limits the types of merchant accounts that can be offered. A handful of high-risk merchant accounts can quickly impact the entire pool of aggregate merchant accounts and escalate the risk level, which is why you can’t get a high-risk merchant account on Shopify.

In comparison, high-risk merchant account providers understand the risk profile of your industry. You get a specific merchant account ID that is linked to your unique risk profile. While these accounts typically involve stricter rules and higher fees, they also provide customized risk management and better stability.

What Are Shopify’s Prohibited Businesses? 

Before you search for a high-risk payment gateway on Shopify or other companies, it’s important to know which companies can and can’t use Shopify Payments. When it comes to Shopify Payments’ prohibited businesses, the following list includes the products that cannot be sold on Shopify if you want to continue using the platform.

• Alcohol, tobacco, and drugs
• Cannabis products
• Hazardous materials
• Medications and medical accessories
• Weapons and munitions
• Products that involve hateful, offensive, or violent content
• Human body parts and fluid
• Digital currencies and securities
• Mature or adult content
• Endangered animals

Top Alternatives to Shopify for High-Risk Merchant Accounts 

If you’re looking for Shopify Payments alternatives, there are multiple payment processors that can help you accept payments for your goods and services. Shopify allows you to use third-party payment providers to process payments if you decide not to use Shopify Payments. To get started, you can ask the following merchant account providers.

How PayCompass Can Help 

If you’re struggling with your high-risk Shopify Payments account, we can walk you through what to expect and your options. At PayCompass, we have years of experience working with clients from a variety of industries. We offer tailored solutions for non-standard merchant profiles.

Our flexible underwriters understand the needs of different industries. This means we can make a decision quickly, so you can start processing payments sooner.

Through our payment processing services, you can take advantage of advanced risk management and fraud prevention tools. Our state-of-the-art technology can help you manage and reduce chargebacks, so you can devote less of your revenue to payment processing. 

Final Thoughts

If you operate a high-risk business, it increases the likelihood of an account suspension or hold. Your business can’t afford unexpected cash flow freezes, which is why it’s so important to find a high-risk merchant account provider.

When it comes to high-risk payment processors at Shopify, account holds are incredibly common. Shopify also bans accounts that sell certain prohibited products and services. 

As a company with a high-risk merchant account, you need a payment processor that understands the regulatory hurdles involved. You also need the best fraud and chargeback prevention tools. At the right provider, you can ensure a consistent revenue stream, secure payment processing, and regulatory compliance. 

For more information about Shopify and high-risk merchant accounts, reach out to our payment processing experts today for more information.