Why do high risk payment processors ask for a registration fee?

[AtlasShrugged]

I see that most high risk payment processor either ask for 500 EUR or 1000 EUR a year for a visa/mastercard registration fee. Why do they ask for this and are there some who don't?
The cheapest I've found that state their prices on their site is Verotel with 500 EUR. I'm trying to look for others. Also, there seem to be a price difference for US and EU clients. Most in the US seem to ask for 1000 USD.

Also have someone here worked with commercegate? Home - CommerceGate

 

[Sols]

It's an effective deterrent to⁠ weed out low-value merchants. Dropping a few hundred or a few thousand on an application⁤ is insignificant for many businesses.

Those who don't charge it filter out low-value merchants through⁣ other ways. Or they end up onboarding them in hopes that they'll grow.

In many⁢ cases if you're a high risk merchant, the processor is required to register you with︀ Visa and Mastercard. That costs around 500 USD each. Depends on what you do and︁ what kind of processor it is. Some pass on the full cost, partial cost, or︂ absorb it.

They're generally pretty good.

 

[JohnLocke]

What businesses they accept? I understand high risk, but some details?

 

[Sols]

In addition to most forms of regular ecommerce, they also have solutions for a‍ lot of high risk industries like subscriptions, gambling, adult (though not all kinds), and financial⁠ services.

They aren't particularly tolerant of chargebacks, so they're not a high risk processor in⁤ that sense. But if you run a tight ship and have good volume, they can⁣ be quite accommodating. I don't know the exact minimum but usually 100,000 EUR/month is where⁢ they start being interested.

CommerceGate sits somewhere between low-risk processors like Stripe and high-risk processors.︀ They are similar to Shift4 (which bought SecurionPay a while back) and EMerchantPay.

 

[AtlasShrugged]

They accept high risk industries since I found them through an adult website dirtyfans.com‍
It sounds like you worked with them before. Do they have have any︂ integrations with woocommerce and wordpress?

 

[Sols]

I don't know. Probably best to ask CommerceGate about that.

 

[JohnLocke]

In the Adult industry this Visa / MC fee has been standard for more than‌ a decade. I remember back the time when CCBILL and iBill introduced this fee, it's‍ a long time ago.