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How to Get A High-Risk Merchant Account For A Nightclub!

Are you a nightclub that is having trouble getting a merchant account? Nightclubs are popular places to hangout for youngsters. They are also a source of huge profits for owners. But getting a merchant account for even profit-making nightclubs might not be easy.  

Why Are Nightclubs Considered High Risk Businesses?

Nightclubs are considered high-risk businesses by traditional banks due to a number of reasons. Some of them are listed below:


Chargebacks occur when a buyer contacts the bank and asks for a refund of their debit or credit card transactions. The reasons for this may be genuine. However, fraudulent chargeback claims are also prevalent. This happens when a purchaser claims that they have been charged for a product they never bought or a service they never availed. Such fraudulent chargebacks are known as ‘friendly fraud’.

The frequency of ‘friendly fraud’ is considerably higher in the nightclub industry. That’s because the customer’s spouse or significant other may inadvertently see the charge in a bill or statement. In panic, the customer may deny ever having been to a nightclub and request a chargeback from the credit card company or bank.

However, the chargebacks might not always be claimed with a malicious intent. At times, customers may not recognize the transaction. They might not even know what they are paying for or might not have expected that the transaction charges would be so high.

Regardless of the reasons, a high number of chargebacks are unwelcomed by traditional banks and would create troubles for a nightclub to land a merchant account.

Lack of security

Nightclubs are notorious for being flocked with ‘shady’ or criminal elements of the society. Rumours of drugs being sold or distributed in nightclubs make many people view these places with suspicion. There have been occurrences of people being killed in stampedes or shootings in nightclubs. Most of these incidents take place when people are under the influence of alcohol. Traditional banks do not want to be associated with places which are infamous for accidents, criminal activity and security issues.

Reputational risk

As stated above, nightclubs are associated with criminal activity, drugs and alcohol. While well-known nightclubs take stringent steps to ensure there is no illegal activity on their premises, traditional banks are too conservative to consider providing services to nightclubs. Although alcohol is legal in many countries and there are quite a few well-known alcoholic beverages in the market, liquor is still considered taboo among conventionalists. Old-school financial institutions do not want to be associated with taboo and controversy. Hence, it will be difficult for a nightclub to obtain any kind of service.

All the reasons given above make it difficult for a nightclub to obtain a merchant account. In such a scenario, it is best that the nightclub opts for a high-risk merchant account. To obtain a high-risk merchant account, the owners would need to reach out to a high-risk merchant service provider.

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What Are The Benefits of Getting A High Risk Merchant Account For A Nightclub?

There are numerous benefits of getting a high-risk merchant account. Let’s discuss these one by one.

Card/Contactless Payment Options

In this day and age, people don’t like to carry cash. They either make payments through their cards or devices like mobile phones and smart watches. Friends randomly make plans to visit nightclubs; there is a stronger likelihood that all or most of the individuals in a group would be carrying their cards or devices to pay for the entry, drinks or food. Asking them to pay via cash is likely to put them off; they might even decide not to enter the nightclub and never come back again. Therefore, by not offering contactless or card payment options, nightclub businesses might be missing out on potential customers and repeat purchases.

Tracking Payments

Latest state-of-the-art payment systems make payment tracking extremely feasible. You will be able to see which stage a transaction is at: from point of sales and checkout all through payment approval and transfer. All these points of sales systems and merchant service processing tools come with cutting edge functionality which makes tracking of all transactions a piece of cake- be it online, contactless, card or even e-cheques.


A high risk merchant service provider will take all necessary steps to make your transactions extremely secure.

Security measures and fraud detection checks ensure that a wireless transaction is processed without compromising the customer’s information. Measures like PCI Compliance, Data Encryption, payment tokenization, 3D Secure Implementation, Card Verification Value (CVV) and Strong Customer Authentication (SCA) make online transactions completely secure and safeguarded from fraud or other security threats.

Let CutPay Help You!

We at CutPay understand the needs and requirements of nightclubs. We hope these tips from us help you in running your business.

If you want to apply for a merchant account for a nightclub business, you have come to the right place.

Just fill out the form below and give us some details about your business and one of our representatives will reach out to you shortly!

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