Crowdfunding Merchant Account

Crowdfunding services have helped countless individuals and groups access funds for sundry necessities. From business capital to medical bills, crowdfunding provides easy access to large sums of money without the need to pass through banks and financial companies.

For crowdfunding merchants, the service’s popularity proves to be a worthy method of making a profit. Unfortunately, merchant account providers tend to avoid crowdfunding merchants because of the unique risk that comes with the business.

What is a High-Risk Merchant Account?

Merchant accounts give companies the capability to accept and process digital payments. In the case of crowdfunding merchants, that would have to be the only way to take payments, since cold hard cash can’t be an option for online transactions.

Businesses obtain these specialized business bank accounts through merchant-acquiring banks or providers who facilitate payments and hold and disburse funds. The only problem is that merchant acquirers are highly selective when it comes to accepting applications for merchant accounts.

The reason? Risk. As a business itself, banks are conservative by nature. They avoid any partnerships or transactions that would cost them any money. When a business is prone to chargebacks, banks typically back off and veer away.

That’s because chargebacks cost money for everyone involved in the transaction. When customers aren’t happy with their products and services, or if they were the victims of fraud, they can initiate a chargeback that reverses the transaction without contest.

This costs money for the merchant, the bank, and even the card issuer. So to avoid the risk of having to pay expensive fees so often, banks avoid providing high-risk merchant accounts to businesses that present a higher chance of financial failure.

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Why is Crowdfunding High Risk?

Merchant account providers didn’t just pick out crowdfunding businesses from a hat and then call them high-risk. There are certain elements of the crowdfunding style that inherently increases the risk of fraudulent transactions and chargebacks.


The entire purpose of using crowdfunding services would be to convince people to make donations based on your ideas or situation. For instance, a proposed business venture would have to showcase how the company would bridge a gap in the market so as to encourage individuals to donate.

In some cases, people use crowdfunding to solicit funds to pay for medical bills, in which case they would have to pull on people’s heartstrings. While many of the people who use crowdfunding have good, honest intentions, some just want the money.

So they’ll fabricate convincing backstories to encourage donations, which they’ll simply use for their own private intentions. And when people who made payments realize at the end of the project funding term that the whole story was a hoax, they’ll likely want their money back. And what easier way to do that than with a chargeback?

Information and Data Security Issues

Since the advent of crowdfunding, hackers have had a vested interest in retrieving data from these platforms. Holding card and identity information of millions of people, and breaching the repositories of these platforms prove a lucrative endeavor for the everyday hacker.

Even with sophisticated security measures in place, many crowdfunding platforms have been subject to aggressive online attacks that put sensitive customer information at risk.

And wherever there’s a risk, expect conventional banks and financial service providers to steer clear. If a merchant acquirer decides to partner up with a crowdfunding merchant without sufficient security protocol enacted, then they might have to answer for expensive information theft issues.

Card-Not-Present Transactions

A card-not-present transaction involves accepting payments from customers without them having to present a physical card. This mainly happens online, where it’s impossible for customers to swipe their piece of plastic through a terminal.

While card-not-present transactions aren’t risky in and of themselves, issues arise when you consider how easy it is for individuals to have their card information stolen. If anyone happens to get a good look at your credit card and the details on it, they can punch in the information and complete a card-not-present transaction.

Because crowdfunding services operate strictly with the card-not-present transaction, the risk of some payments being unauthorized by the actual cardholder increases tenfold.

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Can Crowdfunding Merchants Get a High-Risk Merchant Account?

Yes, you still can. But conventional banks and financial institutions might not be the ideal partner. These conservative merchant acquirers will have you jumping through dozens of hoops, performing tricks, and submitting mountains of documents only to have you wait for eons for rejection.

The whole process is frustrating, to say the least. And in case you do get approval at the end of the ordeal, there’s no guarantee that you’d be out of the woods. Traditional merchant acquirers will protect their best interest at the cost of your business.

So they’ll trap you in restrictive contract terms and they’ll impose steep fees and charges to offset the perceived risk — even if your business runs smoothly. Unfortunately, these contracts can sap your business of valuable profit and have you at breakeven or worse.

That’s why any high-risk merchant looking to set up a crowdfunding high-risk merchant account would do well to reach out to Shark Processing.

What is Shark Processing?

We’re a team of high-risk merchant account specialists with one goal — to level the playing field. We believe every merchant should have a chance at cashless convenience, and that’s why we partner up with hard-to-place merchants to find the perfect merchant acquirer to suit your needs.

Our services deliver guaranteed placement for high-risk merchants, but not just with any acquirer. We carefully and meticulously asses your company’s information to place you with a merchant service provider that can foster your growth and success.

We offer:

  • Easy, three-step applications
  • 24/7 customer support
  • Secure processing
  • Flexible terms and low fees
  • 24-hour turnaround time
  • Tailored solutions
  • Professional team of merchant service experts
  • Guaranteed and FREE placement

Contact Shark Processing Today

Say goodbye to long waits and frustrating rejection — at Shark Processing, you can get your high-risk crowdfunding merchant account all set up in at least 24 hours! Contact us today to learn more about our services or send in your pre-application form to get started on your high-risk merchant account.


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