The check processing industry has substantially grown over the past few years. This growth has been primarily due to the tightening by financial institutions of many industries deemed unacceptable for credit card processing. As these options have all but disappeared for some businesses, the use of high-risk check processing has increased to fill the void. Today, many types of high risk businesses use some form of check processing to accept customer payments. For most businesses, searching for a high risk payment processor can be tedious. Depending on the type of industry, merchants can face repeated declines with few options for payment processing.
High Risk eCheck Processing Services
An electronic check (an eCheck) is a digital replacement for conventional paper checks. Most of the time it is used for online transactions to pay for a service or product related to eCommerce. With fewer regulations than card associations, eChecks can be used for various products and services.
The most common types of payment processing alternatives include:
- eCheck
- Check 21
- ACH
To use an echeck, merchants complete an online form with customer bank account information from the paper check. Once the account and routing details have been sent to an eCheck processor, the funds will typically be released to the merchant within 24 – 72 hours. Most check processors offer echeck verification tools to help ensure a successful transaction, including account and real-time check verification services. These tools will help lower the chance of a bad check being accepted and deposited by the merchant.
Check 21 is an offshoot of the eCheck system, creating a check image that is used for deposit at banks. Check 21 is ideal for most high risk businesses since it allows for rebelling and has much higher thresholds for chargebacks since it does not adhere to Federal Reserve guidelines.
ACH is a fully electronic process that utilizes the Federal Reserve members to send and receive payments. While this is the most affordable solution for businesses, the thresholds for chargebacks and returns are low and not a good fit for high risk businesses.
Merchants can easily store the customer’s payment information for future billings. Unlike a credit card, customers attempting to dispute an echeck transaction will be required to provide more information file a claim. This ultimately means fewer chargebacks and lower overall operating costs for merchants.
Advantages of eCheck Processing
eCheck processing is relatively simple. Accepting checks provides more options while minimizing the risk and cost of accepting payments. Other functions, such as remote deposit services, provide improved check payment functionality for billing management. This has become one of the factors making checks faster once purchase once billing information is stored electronically.
As consumers prefer a wide range of payment options, businesses have also reported a boost in sales once they have begun accepting eChecks. Moreover, consumers also view checks as more trustworthy since they pose fewer risks and have less possibility for fraud. The improved security and verification programs have contributed to help reduce the instances and severity of fraud.
Check payments have other advantages such that transactions does not require a receipt or signature authorization. Payout times have also improved allowing merchants to be funded in less than a day. Accepting checks has also become much more affordable with many of the same features as other payment methods.
The next generation of eChecks to emerge is the Check21 program. Instead of using the federal government’s bank clearing network, Check21 is entirely digital and funds are cleared nearly instantaneously.
High-Risk Check 21 Processing
Check 21 is the next generation of electronic payment processing services. Instead of having to send a paper check, Check 21 creates a digital version of the paper check for clearing. Transactions are cleared via bank-to-bank file transfers rather than using the government Automated Clearing House (ACH) network. Similar to ACH, payments made through the Check 21 network can be used for online transactions, phone transactions, and recurring debits.
The user experience of Check 21 payment processing is similar to that of ACH. Instead of using any card info, your clients or customers will send their payments to you via eChecks by offering account details and bank routing.
At the beginning, Check 21 payment processing was used for remote deposit capture (RDC) where paper checks were scanned to electronic images. Several banks allow you to snap a photo of a check on a mobile device and deposit it electronically. Recently the way Check 21 is used has altered. Now the consumers can start processing transactions electronically instead of relying on paper checks.
Several Check 21 processors make a “substitute check” that gets forwarded to the merchant’s bank for approval. However, this option will not work for your company when you have too many returned and revoked transactions. Plus, if your company does not have many transactions that get returned or revoked, you do not have to use Check 21 in the first place as ACH is a more affordable solution for processing low-risk transactions. Another possible obstacle you can encounter when you use substitute checks is that several big banks in the United States will not welcome these types of checks and consequently will only return these.
Check 21 is a wonderful way to process payments if you are involved with any high risk e-commerce field for example; credit repair, pharmacies, etc. When your company goes over the minimal number of returns and revokes needed by the ACH network, Check 21 payment processing is a great answer as it provides more returns and higher revoke ratios. If so, you should go for the end-to-end electronic image exchange. With this option, there is no need to use substitute checks as the transactions are forwarded to the Federal Reserve by using an e-format.
Advantages of Check 21
Although credit card processing is quicker than Check 21 payment processing, there are a few benefits in-store when you opt for Check 21 payment processing. One of its biggest perks is the convenience it offers to merchants. When you opt for Check 21 processing, you do not have to sort out stacks of paper checks or spend time destroying copies which makes it much simpler. Plus, that also means you no longer have to fear that you will misplace a paper check because a digital substitute is created that is legally identical to the one which was first created.
It is significantly easier to deposit checks electronically than submitting a paper check. It can in many instances minimize processing delays caused by the time and money required to send these paper checks. Like ACH processing, it is significantly less vulnerable to fraudulent activity in many instances.
High Risk ACH Processing
ACH processing is used by many businesses to accept payments from their customers, and for good reason. It is less expensive and safer than card processing, in addition to the fact that approval and setup is much faster.
Over the past few years, more and more industries have become considered “High Risk” by NACHA (National Automated Clearinghouse Association). These tighter standards have led to the development of high risk ACH processing. One of the pioneers in this field was Allied Payments.
Allied Payments can give the green light for ACH processing for higher risk businesses that normally cannot get ACH processing approval for their field or merchandise. Our high risk merchant services can help your company get high volume ACH processing. We like to believe that we are one of the leaders in the industry, thanks to our years of experience. We can approve high risk ACH payments and processing, high volume ACH processing and high risk eChecks.
High risk merchants who already have a card processing merchant account can prosper by setting up a separate ACH account that will allow for higher volumes at lower rates. Nearly every legal business is accepted and merchants can begin processing payments in less than five days.
Benefits of ACH Check Processing
ACH transactions generally cost merchants less than other forms of payments. Payments can be made for minimal costs when compared to accepting credit cards. Some merchants have realized the benefits of these lower costs and built their businesses around this model.
With the help of ACH check processing services, you can send a debit directly to your clients’ checking account to be paid for services rendered and merchandise that was sold. Many payment processors are unable to allow certain types of ACH processing. This is generally when products or services sold are considered unacceptable. These types of merchants need to enlist the services of an ACH processor specializing in high risk.
Another online banking process similar to Check21 is ACH. With an ACH, the customer’s bank will initiate the transaction whereas with Check21 the merchant must initiate it.
Start Accepting eCheck payments
• Sign up now and start accepting eCheck payments in less than 3 days from nearly any checking account. Virtually every industry is accepted!
• Are you tired of chargebacks from buyer’s remorse? eCheck processing is harder for customers to dispute after debiting their account.
• Recurring billing and large ticket merchants will always benefit from using eCheck processing over card processing.
• Our customized payment solutions allow merchants to accept credit cards, debit cards and eCheck payments by just applying with one application. eCheck processing is usually approved before credit card processing is.
In addition to high-risk eCheck processing, Allied Payments also processes payments for low risk merchants. Complete the “Get Started Today” box to the right and an account representative will contact you back within 24 hours.
Frequently Asked Questions (FAQ)
What is high-risk check processing?
High-risk check processing is a payment solution designed for businesses considered high-risk by banks and traditional processors. These businesses often face higher chargeback rates, regulatory concerns, or operate in industries like CBD, adult entertainment, or online gaming. High-risk check processing helps them accept checks as a reliable payment method despite the elevated risk profile.
Why is my business considered high-risk for check processing?
Your business may be labeled high-risk due to factors like a high volume of chargebacks, recurring billing models, the nature of your industry, or past processing issues. Industries like credit repair, telemedicine, or firearms typically fall under the high-risk category. Allied Payments helps businesses in these sectors get approved and maintain compliant check processing accounts.
How does high-risk check processing work?
High-risk check processing works by allowing businesses to accept checks—both electronically (eChecks) and paper-based—and converting them into digital payments. The checks are verified, processed through secure gateways, and settled to your business account, usually within 24–72 hours. Allied Payments integrates advanced risk management tools to minimize fraud and ensure fast approvals.
What are the benefits of using high-risk check processing services?
Benefits include:
- Access to secure payment options when credit card processing isn’t available.
- Reduced transaction fees compared to card processing.
- Faster approvals for high-risk industries.
- Fewer chargebacks and disputes with eCheck payments.
- Expanded payment flexibility for your customers.
Can high-risk businesses accept eChecks online?
Yes. Allied Payments enables high-risk businesses to accept eChecks online through a secure payment gateway. Customers can authorize payments using their bank routing and account numbers, just like writing a traditional check—except the process is entirely digital and much faster.
Is high-risk check processing safe and compliant?
Absolutely. At Allied Payments, we prioritize security and compliance. We use encrypted gateways, real-time verification tools, and stay aligned with NACHA and banking regulations. This ensures your business and customer data stays protected while minimizing processing risks.
How long does it take to get approved for high-risk check processing?
Most businesses can get approved within 24 to 72 hours, depending on the industry, documentation provided, and risk profile. Our team at Allied Payments works closely with you to streamline the onboarding process and get your business processing checks quickly.
What industries do you support for high-risk check processing?
We support a wide range of high-risk industries including:
- CBD and hemp
- Online gambling and casinos
- Adult services
- Subscription services
- Credit repair and debt collection
- Firearms and ammunition
- Tech support and remote services
What documents are needed to apply for high-risk check processing?
Typically, you’ll need:
- A government-issued ID
- A valid business license or incorporation documents
- Recent bank statements
- A voided check
- A completed application form Our team will walk you through everything you need for a fast and successful application.
How can Allied Payments help my high-risk business succeed?
Allied Payments specializes in high-risk payment processing. We offer tailored check processing solutions with high approval rates, fraud protection tools, and flexible integration options. Our goal is to help your business operate securely, grow revenue, and stay compliant—regardless of industry type or history.
Thank you Charles
