merchant accounts and payment gateways are necessary for merchants to process credit card payments. So what do you do when…you’ve been canceled.

Now, this is never something someone wants to hear. But being canceled by fans, friends, or family is one thing. Though, devastating, being canceled from your livelihood is a whole other story. So what should you do if your high-risk payment processing account is canceled by your payment gateway,

We will explore what this means, why it happens, and what to do when it does. Keep reading to find out more.

Is a Merchant Service Provider?

In short, no. is not a merchant service provider. But let us explain what we mean. If you want to start accepting payments for your small business, other than cash or check, you will need a merchant service provider to assist with the facilitation of accepting credit card transactions. But what is a merchant service provider versus a payment gateway, payment processor, merchant account, and reseller? Let’s dive right in.

Payment Gateways offers payment gateways and merchant accounts. A payment gateway is a connection or bridge between a merchant and a processor. But there is a difference between and other gateways, resellers, processors, and merchant service providers. Though it provides a service (payment gateway) to merchants, is not considered a “merchant service provider”.

Payment Processors

payment processor is the main entity that authorizes merchant transactions, processes them, and transfers the data and funds between all parties involved in the credit or debit-based payment process. Merchants typically do not have a direct relationship with payment processors.

In most cases, a merchant will need to acquire a merchant account and work with a connecting merchant service provider to obtain access to process payments with payment processors.

Merchant Accounts

A merchant account is a bank account for merchants that will acquire all the settled credit and debit card deposits from daily batches. If you have no merchant account, there is no way to be paid for your digital transactions. The bank that hosts your merchant account is also known as an acquiring bank or an acquirer.

Merchant accounts with are also offered. Therefore, merchants can set up their merchant accounts and gateways in a bundled package. Or separately. Meaning they can use gateway services through, and merchant account services through a different bank or financial institution.

Merchant Service Provider merchant service providers are also known as resellers. Merchants can purchase their gateway, such as the one provided by, from resellers who have a relationship with the gateway.

A merchant service provider (MSP) has a direct relationship with the payment processor which facilitates the communication between the card issuing and merchant acquiring banks. An MSP also sets a merchant up with any additional payment processing solutions, equipment, and integrations they need to run their business.

Additionally, an MSP is a merchant’s main contact for their financials. They are in charge of managing the deposit and settlement of funds into a merchant’s account and thus they decide a merchant’s credit card processing fees or discount rate. never stores merchant settlements and funds, it simply acts as the connection between the financial entities involved in the backend.

How Long Does Take to Deposit Money?

Once a merchant completes their side of a transaction, claims they will typically settle the transaction within 24 hours. However, it is then up to the merchant’s Merchant service provider to deposit the funds into the merchant’s acquiring bank. Then the acquiring bank must then post the settled funds on the merchant’s account.

Therefore, if you do not see your funds by the next business day, you can wait a few more business days or (because we know that’s usually not the most convenient strategy) contact your merchant service provider or bank to make sure those funds are being processed accordingly on their end.

Graphic showing different types of present and online payments

What Type of Payments Can you Take With is a payment gateway that allows merchants (small businesses or large) to accept all forms of digital transaction payment methods online, in-person, and over the phone. With’s virtual gateway services, your company can offer the following transaction types to their customers:

  • eCommerce: Customers can shop and pay online using their credit card, debit card, ACH, or even Buy Now, Pay Later programs.
  • Point-of-sale: Though is a virtual gateway, merchants can connect a physical terminal to their computer in-store and accept card payments in person. Including contactless payment, if you have an upgraded card reader.
  • Mobile payments: Customers can use their mobile devices to pay online or in person. Additionally, with integrated app software, merchants can be on the go and accept payments right from their smartphones.
  • Phone payments: With’s virtual terminal, merchants can manually key in cardholder information online and accept over-the-phone payments.
  • eCheck: Merchants can process ACH or electronic check payments right from their virtual terminal. Online or in person.
  • Billing: Additionally, offers user-friendly tools to manage daily business flow including billing and reporting needs. High-Risk Merchant Accounts

For low-risk merchant accounts, gateways integrations are a seamless experience. However high-risk businesses may have a more difficult time being approved for not only a merchant account but gateway services through

For high-risk merchant accounts, poses more challenging processes. does offer merchant account services with their gateway. But a high-risk merchant account is a customer account for more unique businesses. And these businesses must remain on their toes when it comes to paying attention to rules, regulations, and changes.

Why Did Drop My Merchant Account?

Without warning, payment processors and merchant account providers can freeze high-risk accounts. There may be numerous reasons this could happen. But one thing is for certain, it is never a pleasant surprise.

This could be done to protect the provider from any risky behaviors, fraudulent transactions, or legal concerns. So what are some of the reasons your merchant account can be frozen?

Violation of Terms of Service

The first reason your merchant account can be dropped is if your business does anything to violate’s terms of service. Such violations could include breaching copyright laws or selling unauthorized products or services, including illegal products.

Unusual Activity

One situation that may be out of your control is a new order volume. If a merchant were to have a customer order a large quantity with a high purchase amount, a payment processor and merchant account provider may view this as suspicious activity and freeze your merchant account. In some cases, their risk team may contact you to provide purchase proof and information on the transaction to approve it and unfreeze your account.

Excessive Chargebacks

The next reason your merchant account can be dropped is due to excessive chargebacks. What is the definition of excessive chargebacks? Answer: a 1% or more chargeback to transaction ratio is considered excessive. Now this 1% seems extreme, but it is easy for merchants to minimize their chargebacks with appropriate and transparent business practices.

Though one could assume that chargebacks only pertain to unethical businesses, it is not always the case. Even a reputable business can experience consumer chargebacks if they miss common best practices for businesses such as:

  • Easy to contact customer support
  • Transparent product and service descriptions
  • Accurate marketing
  • Propper payment
  • Quick shipping (if you are an eCommerce store)
  • Maintaining PCI compliance and anti-fraud measures

Implementing and maintaining the above business practices can easily reduce your chargeback ratios.


Lastly, if your business suffers from any of the above circumstances or if it has any other risk factors that views as too dicey for them, you may find yourself canceled because they have now labeled your business as high-risk and in some cases, and certain payment processors will not work with high-risk businesses.

So if you own a legitimate business and you’re not violating any terms of service, selling unauthorized products, or involved in any fraudulent activity, and you’re still labeled as a high-risk merchant and your account becomes a victim of closure, you will have some work to do. You will have to look for a particular type of merchant account provider. One that works with a high-risk payment processor.

So let’s take a deeper look into better understanding why this could happen and from there, what you can do about it should your high-risk business encounter it.

Young man searching for High risk payment processing on a search engine Dropped your High-Risk Merchant Account…Now What?

You may (or may not) be surprised to find out that merchant account companies freeze or drop merchant accounts quite often. When a merchant’s account is frozen or shut down, their payment gateway is additionally unavailable to use. Without either of these services, a high-risk merchant, or any merchant for that matter, is unable to accept any credit or debit card transactions which means they can no longer efficiently run their business.

This is bad news for not only the merchant but also all the customers that the inconvenience will affect. Not many paying customers carry cash or checks with them. Which means they will take their business elsewhere. Now, of course, we don’t want this to happen. So what do you do if drops or freezes your high-risk merchant account?

Act Fast

First things first, you need to act fast. Acting fast will reduce the amount of time your digital payment processing solutions are down and decrease customer frustration–keeping lost loyalty and decreased revenue at bay. is what’s known as an aggregate merchant account. If you have an account tied to an aggregate service, you are not on your own merchant ID. Aggregated merchant accounts essentially use one merchant ID to pool millions of businesses together. So the regulations are a little different.

Find a Non-aggregate Merchant Account Provider

If your account is dropped by, you will want to send an application to a non-aggregate merchant account provider. You will need to find a merchant account payment provider that will assign you your own individual merchant ID. And one that works with a payment processor that is familiar with or specializes in processing for high-risk merchants. Or, better yet, maybe you will find one that would not consider your account high-risk.

It’s recommended to find a high-risk merchant account provider that has strong relationships with multiple banks. Better yet, find a merchant service provider that maintains an underwriting staff in-house. This can guarantee your application is fully scrubbed and adjusted to the best suitable outcome before they submit your merchant account application to their supporting bank.

Reduce Your Risk Level

All banks and processors have their own underwriting processes where they determine the risk status of a merchant account application. So if you are able to convince the processor for your merchant account application that your business poses little to no risk, you may receive quicker approval and even better pricing.

How do you reduce your risk level? Well, that depends on the reason dropped your merchant account in the first place. Did you have excessive chargebacks? Were you adding unauthorized products to your inventory? Are you falsely advertising your business and what your products do? The list goes on. But if you can reduce your chargebacks and become a transparent company, payment processors are more likely to approve your merchant account.

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Wrap Up

It can be an extremely frustrating experience if your merchant account is dropped or frozen by your account provider or payment gateway. You need your merchant account up and running smoothly to continue a positive customer experience to create lasting impressions and positive growth for your business.

The best practice you can do is to make sure you are not trying to pull the wool over your merchant account provider’s eyes. If you begin to sell unauthorized merchandise or services and receive excessive chargebacks due to faulty advertising or fraudulent transactions, you will be at risk of losing your merchant account.

But sometimes chargebacks are out of your hands, and other times you need to expand your inventory selection if you’re looking to grow. So if your hands are tied, you need to find alternative avenues for your credit card processing. The ultimate key is to find a payment processor that specializes in partnerships with high-risk merchant accounts.

If you’re interested in what to do in the meantime when you’re looking for a new merchant account provider check out this article.

To contact sales, click HERE. And to learn more about ECS High-Risk Merchant Accounts visit High-Risk.