Posted by NationalACH on Mar 16, 2022
echeck payment processing

Special echeck processing gateway designed to accommodate higher chargebacks and returns than any other payment method.  High risk echeck processing accounts for companies unable to obtain ACH accounts due to chargebacks, returns, or business type.

Reason Merchants are Classified as High Risk

High risk is a term banks use to identify the risk associated with an account.  The most common reason for a high-risk classification is a statistically higher likelihood of chargebacks compared with standard risk accounts. 

While ACH is the lowest cost method of processing echecks, it is difficult for high-risk merchants to maintain the 0.5% ratio for chargebacks or the 15% returns required by, the governing body of the ACH network.

Moreover, banks that provide ACH processing often do not accept in high-risk industries.  As a result, many high-risk merchants are either prohibited or restricted by ACH processors.

Best Way of Processing Echecks for High-Risk Merchants

The echeck gateway is designed specifically for merchants that have higher chargebacks and returns than allowed by the ACH or card networks.  Or industries that are prohibited or restricted by ACH or card processors.

The platform is built on X 9 file Check 21 technology.  Echecks from all banks and credit unions in the US can be processed through the gateway.

X-9 Check 21 files of echeck transactions are electronically submitted by the processor directly to the Federal Reserve for clearing.   Cleared funds settle back to the processor, who assumes liability for returns or chargebacks.  The processor settles cleared funds to your business bank account via an ACH credit, protecting your business operating account.

Benefits to high-risk merchants include:

  • Ten banks are connected to the echeck gateway. Eliminates dependency on a single bank.   Ensures continuity of processing while protecting your revenues. 
  • Unlimited processing capacity. Once approved, you can process as much volume as you need.  There are no caps on processing.  Grow your business with ease. 
  • Accept payments any way you want. Integrate to a website with an API or batch upload files.
  • Robust online reporting lets you view the status of all transactions in real time. Enhances customer service.  Manage your account efficiently.  Obtain the information you need when you need it. 
  • Accept payments online, by phone, mail, or in person. The more ways people can pay you, the more sales you make.
  • Easily import/export processing data to your in-house accounting systems, increasing productivity.

All high-risk merchants with higher chargebacks or returns than permitted by the ACH or card networks are a good fit for Check 21 X9 echeck processing.  As are high risk merchants prohibited or restricted by ACH and card merchant account providers.

The customer experience with echecks is like card payments.  At checkout, buyers provide bank routing and account numbers rather than card data.  The rest of checkout is the same as paying with a card. 

What Types of High Risk Merchants Benefit?

High risk merchants with higher chargebacks and returns are delighted to find a processing solution that works long-term.   And merchants who cannot obtain ACH or card processing because their industry is on a the restricted or prohibited list discover echecks are a great way to accept payments electronically.

Here are just a few examples of high-risk merchants using the platform:

Adult entertainment, attorneys, auctions, bail bonds, business opportunities, cruise lines credit repair, collection agencies, debt relief, direct sales, discount medical plans  document preparation, file sharing services, gaming, ID theft protection, investments, kratom  lenders, loan modification, nootropics, nutraceuticals, online tobacco, online alcohol, peptides, prepaid cards, sexual enhancement, seminars, student loans, sweepstakes and raffles, tech support, ticket brokers, timeshares, title lenders, travel, tribal lenders, video on demand, warranty services, weight loss, and more.

If your business type is not specially mentioned, simply contact us.  Chances are excellent that we can help. 

Beware of What Some Companies Call Echecks

Companies which claim to be echeck processors for high-risk merchants can cause real damage to your business. The most common issue is the loss of the loss of your business bank operating account due to way the transactions are processed. 

These companies are not really processors.  Rather, they simply create “substitute checks” and scan or overnight the substitute checks to your business bank for clearing.  You assume all the liability for returns and chargebacks.

While this seems attractive at first because the transactions are in your bank account the same or next business day, the items can be returned or charged back.  This negatively affects your business operating account.

Returns and revoked transactions (chargebacks) inevitably occur, particularly for business to consumer transactions. When your bank sees returns and revokes running through a business bank account, your account is flagged.  And you risk the loss of your business operating account.

Many banks, including major US financial institutions, do not honor substitute checks.  The transactions are “returned to maker” and drive up the number of returns flowing through your business account. This creates an additional risk when clearing transactions through your bank account.

Substitute checks are a good option only if you have extremely low revokes or returns.  For example, business to business transactions rarely have returns or chargebacks.

Business to consumer transactions are a completely different story.  Consumers generate far greater numbers of returns and chargebacks than do businesses. 

Since chargebacks and returns are a big reason high risk merchants are classified as high risk in the first place, this method of processing rarely works out well in the long run for high-risk merchants.


If you are a high-risk merchant, you understand the importance of offering multiple payment options to your customers.  Accepting echecks with the specialized echeck gateway for high-risk merchants gives you a solid, long-term solution for electronically debiting payments from bank accounts.

Many high-risk merchants realize that echecks can be the first line of defense against chargebacks and returns.  For example, high risk merchants with recurring payments often “vet” the first few transactions with echecks.  Once the customer has been vetted to confirm that chargebacks or returns are unlikely, the customer can then be switched to ACH or cards.  This helps protect your card and ACH accounts against excessive returns or chargebacks.  And keeps your card and ACH accounts in good standing.

For high-risk merchants who are unable to obtain or maintain ACH or card accounts, echecks are an excellent alternative.  Giving your customers a secure method to pay you electronically and protecting your profits. 

Echecks are the most popular alternative payment method for American buyers.  US shoppers trust the familiar payment method.  Adding echecks to your checkout page is the fastest way to get more sales with no additional work.  

Contact us today to discover out how to get started.