Why some industries are flagged as high risk, and how CPoI® changes everything

There are a range of industry sectors such as online gaming, gambling, adult entertainment, cryptocurrency, travel and ticketing that are deemed high-risk by schemes, financial institutions and payments processors. 

But “high-risk” doesn’t necessarily refer to the nature of the business itself. It often has more to do with the financial and regulatory exposure associated with the industry. These sectors are more prone to fraud, chargebacks, or sudden regulatory shifts, making them tougher propositions for traditional payments infrastructure.  

What gets a business flagged as high risk?

Here are some common factors that can put a business into the high-risk category: 

• Historical trends: If your business model or industry has historically seen a high level of chargebacks. 

• Fraud potential: Selling goods that are easy to resell and therefore pose a higher risk of fraud, such as electronics. 

• Industry volatility: If fraud and chargebacks are trending up across a sector, businesses in that industry may all inherit that high-risk label. 

• Regulatory grey areas: Highly regulated or legally ambiguous sectors are more vulnerable to sudden rule changes. 

• New or unproven businesses: If your business is new or in an emerging category, you may be viewed as untested. 

• High transaction value: Bigger-ticket items carry greater exposure for chargebacks. 

• Subscription models: Recurring billing, especially following free trials, can lead to spikes in chargebacks. 

  
  

Businesses in high-risk sectors also pay much higher Merchant Services Fees (MSF) – in some cases up to 9%. 

And it’s not just industries—some countries are also considered high-risk due to elevated levels of online payment fraud, prompting many global retailers to avoid selling into those markets altogether. 

A flawed online payments process

If you’ve been following my other articles, you’ll know that the root cause of many of these issues is the very foundation of online payments: card-not-present (CNP) transactions. They inherently leave too much room for fraud and chargebacks. 

Two decades ago, the introduction of Chip and PIN revolutionised in-store payments. Thanks to encrypted chips and secure PIN entry, fraud rates for physical retailers plummeted, and remain extremely low today. But fraud didn’t disappear–it simply shifted into online channels.   

When ecommerce started to ramp up, instead of replicating the in-store (card-present) process online, fraud-mitigating workarounds such as tokenisation were put into place to protect the Primary Account Number (PAN). Ironically, Chip and PIN doesn’t even require tokenisation–the data is encrypted and never stored. 

Had we adopted the same, secure approach for online payments from the beginning, many of the issues around high-risk businesses and fraud exposure wouldn’t exist today. 

CPoI® will fix this

This brings me to Card Present over Internet–CPoI®. The world’s first technology that enables card-present payments in online channels. 

In short, it’s the way online payments should have been right from the start. 

• With CPoI, high-risk online payments will be a thing of the past. 

• There will be no need to protect the PAN because the transaction is secure by design. 

• Tokenisation will become obsolete, like fax machines.  

• And “high-risk” businesses can choose to only accept card-present transactions, thus moving them out of high-risk and away from exorbitantly high MSFs.  

  
  

And while CPoI® is ground-breaking, it’s actually not new. It is tried and testing technology that we’ve been using for decades. Just in a new channel.  

Simple. Secure. Scalable.

That’s CPoI®. And it’s exactly what online payments have been missing. 

Reach out to the team today about CPoI®.