By 2026, being labelled a “high-risk merchant” places a business in an awkward space: profitable, but problematic. Sectors like gambling, crypto exchanges, nutraceutical supplements, online coaching, adult content, travel, and FX brokers generate strong payment volumes, yet remain politically sensitive and compliance-heavy.
Both banks and fintech companies have tightened risk controls. So who will still onboard high-risk merchants—and on what terms?
Regulators have continued to escalate expectations. European guidelines on de-risking now require banks to avoid blanket refusals but impose a duty to apply detailed, defensible risk assessments. In parallel, the UK and EU have tightened supervision of EMIs and PSPs, adding new safeguarding, governance, and daily reconciliation obligations from 2025 to 2026.
The result: traditional banks are more selective than ever, while fintechs are still onboarding high-risk clients—but only after intense scrutiny and often at a far higher compliance and pricing cost.
Why have risk appetites shifted across the board?
Traditional banks: risk before revenue
Banks spent the last decade navigating billions in AML fines, correspondent banking withdrawals, and reputational crises. By 2026, risk committees across Europe may have made peace with one reality: onboarding high-risk merchants rarely harms the balance sheet but can severely harm the brand.
Banks know that slow, inefficient onboarding is also a liability. Industry surveys show that roughly 70% of financial institutions lost clients in the previous year due to KYC friction. Yet that hasn’t made banks more welcoming to high-risk sectors—it has merely pushed them to streamline the onboarding of low-risk clients while quietly tightening controls elsewhere.
For many high-risk merchants, this translates to a predictable pattern: prolonged onboarding, multiple rounds of enhanced due diligence, then a “regretful decline” due to internal policy, or worse, an account closure months later during a periodic review.
Fintech: faster onboarding, heavier supervision
Fintech PSPs and EMIs built their reputations on speed. Consumer data shows that more than half of users refuse to spend over 10 minutes opening a digital account, pushing fintechs to optimise onboarding flows.
But regulators have caught up. The UK’s national risk assessments now categorise EMIs as inherently high-risk for money laundering. European regulators have identified PSPs as critical nodes for illicit flows. New safeguarding rules coming into force in 2026 will tighten daily reconciliation and introduce stricter audit cycles.
Fintechs still say yes more often than banks, but their risk tolerance is shrinking. Many now outsource transaction-monitoring audits, restructure high-risk portfolios, or terminate merchants that generate disproportionate alerts—sometimes without prior warning.
Who will actually onboard high-risk merchants in 2026?
Traditional banks: cautious, limited, highly selective
Only a narrow category of high-risk merchants gets accepted by mainstream banks:
- Licensed gambling operators
- Regulated investment/FX firms
- High-volume marketplaces with strong compliance programmes
- Mature e-commerce or subscription models with low dispute ratios
Banks typically require:
- Detailed ownership and source-of-wealth files
- Evidence of strong customer support and refund processes
- Independent legal opinions or compliance reports
- In-person verification of directors or key shareholders
- Conservative limits on volume, geographies, and MCC risk
Banks will onboard—but mostly the top tier of each high-risk vertical.
Fintech PSPs and acquirers: the remaining gateway
Fintech providers remain the practical entry point for most high-risk merchants. These include:
- Specialist acquirers in gaming, adult, travel, and nutraceuticals
- Cross-border PSPs serving emerging markets
- EMIs providing virtual IBANs and alternative payment methods
- NBFIs with risk modelling tailored to non-standard sectors
Onboarding tends to be:
- Faster (days or weeks rather than months)
- More transparent on fees and reserves
- Highly segmented: some MCCs approved, others blocked completely
- Conditional: test volume → review → scale-up only if metrics are clean
But fintechs face pressures of their own. A provider’s risk appetite is now constrained by:
- The bank or correspondent behind them
- Their safeguarding structure
- Their regulatory classification
- Their portfolio’s aggregate chargeback and fraud ratios
As soon as one part of the chain tightens, the merchant feels it—often through volume caps, sudden reserve increases, or unexpected exits.
Fintech vs banks: what the 2026 onboarding experience looks like
Here is a realistic comparison of what a high-risk merchant experiences in 2026:
| Category | Traditional Banks | Fintech PSPs / EMIs / Acquirers |
| Appetite | Very low except for regulated, premium clients | Moderate but narrowing; sector-specific |
| Speed | 30–90+ days | Days to weeks if file is complete |
| KYC/KYB | Extremely deep, often in-person | Automated but intrusive for high-risk |
| Reserves | Rare, but volume caps are common | High reserves (5–15% typical; 20%+ for extreme risk) |
| Stability | High—if you get in | Medium—subject to ongoing reviews |
| Cross-border tolerance | Limited | Higher, but dependent on partners |
| Merchant support | Less flexible | More specialised but stricter |
The bottom line: banks offer stability, fintechs offer access—but neither is fully comfortable with risk in 2026.
The creeping risk of becoming “unbankable.”
An uncomfortable trend has surfaced across Europe: certain business models are becoming commercially and politically toxic—and no provider wants them.
Patterns that increasingly lead to automatic declines:
- Vague or exaggerated marketing claims
- Poor refund or delivery processes
- Coaching or advisory products that border on financial activity
- Travel, ticketing, and event models with a history of sudden cancellations
- Crypto-affiliated merchants without high-standard compliance
- Any model with sustained high chargeback ratios
Card schemes add pressure: Visa and Mastercard continue strengthening rules on disputes, excessive fraud, and high-risk MCCs. Providers do not want merchants who put their scheme IDs at risk.
How can high-risk merchants still get onboarded in 2026?
Despite the difficult landscape, many high-risk merchants do get approved—when they present themselves like risk-managed institutions. The merchants who succeed tend to invest in:
1. Radical ownership transparency
Clear UBO documentation, clean tax records, and traceable source-of-wealth history.
2. Operational substance
Real offices or service-office arrangements, proper staffing, documented workflows, and visible business infrastructure.
3. Dispute-reduction frameworks
Modern fraud tools, real-time customer communication, properly structured billing descriptors, and clear refund policies.
Chargeback reduction is now a survival skill.
4. Multi-provider resilience
Diversifying across:
- one traditional bank (if achievable),
- two PSPs in different jurisdictions, and
- one EMI or NBFI for collection or alternative payment rails.
Virtual IBANs are good for routing—not long-term storage.
5. Compliance as a selling point
Providers increasingly prioritise merchants who arrive with:
- transaction-flow charts
- compliance playbooks
- documented risk controls
- evidence of low historical dispute ratios
High-risk merchants must now behave more like regulated entities.
The 2026 reality: access exists—but at a price
Traditional banks will onboard only the most credible, well-documented, and regulated high-risk merchants. Fintechs are still onboarding the majority, but under tighter conditions, higher reserves, and near-constant monitoring.
The high-risk market isn’t disappearing—it is polarising.
Those who invest in compliance, transparency, customer flow quality, and operational substance still get access. Those who rely on outdated tactics, minimal documentation, or opaque structures increasingly find that no provider wants to take the risk—not even fintechs.
In 2026, high-risk merchants don’t get approved by chance — they get approved by preparation.
We help you create a KYC profile that works with both fintech and banks, before risk teams start saying no.
Feel free to book a complimentary meeting with our experts.
For more industry insights, explore our article: “Why European banks are tightening KYC in 2026?”
Disclaimer
Widelia and its affiliates do not provide tax, investment, legal, or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, investment, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Please consult https://widelia.com/disclaimer/ for more information.
