In the past, high-risk merchants had one big problem: getting a reliable financial partner. Traditional banks have often turned them away, concerned about fraud, chargebacks, or regulatory pressure. For many years, this meant delays, rejections, or even being cut off from payment services entirely.
But things are changing. In 2025, Non-Banking Financial Institutions – NBFIs- are stepping up and offering new solutions to businesses that struggle to get traditional banking support. From payment processing to digital wallets and cross-border transfers, NBFIs are becoming a serious option for merchants in high-risk sectors like crypto, adult content, dating, coaching, supplements, and gaming.
This article looks at how NBFIs work, what makes them attractive, and what high-risk merchants should know before switching to this model.
What are Non-Banking Financial Institutions (NBFIs)?
NBFIs are companies that provide financial services without holding a banking license. They are not traditional banks, but they often offer services that look and feel similar to banking. These include:
- Business accounts
- Payment processing
- Foreign exchange
- Digital wallets
- Lending and credit facilities
- Risk and compliance tools
Some of the well-known examples of NBFIs include Payoneer, Stripe Atlas, Revolut Business, Nium, Adyen, and Wise. While not all of these focus on high-risk merchants, many operate with more flexible onboarding criteria than traditional banks.
In some regions, NBFIs are also known as Electronic Money Institutions (EMIs) or Payment Institutions (PIs). They are licensed and regulated, but the rules are often less strict than for full-scale banks.
Why High-Risk Merchants Turn to NBFIs
For businesses operating in sectors seen as high risk, access to reliable banking is a constant concern. Traditional banks often avoid these businesses due to concerns about fraud, chargebacks, AML exposure, or public image. This can create serious problems even for merchants with clean operations.
Let’s look at some possible challenges high-risk merchants face with traditional banks:
- Lengthy onboarding and due diligence
- Sudden account freezes with little warning
- Lack of support for cross-border transactions
- High fees or restrictions on payment types
- Reputational bias based on the industry, not actual performance
In contrast, many NBFIs have built their services around digital-first businesses and international clients. Some are open to working with high-risk sectors, as long as proper compliance and risk controls are in place.
What makes NBFIs appealing in 2025
There are several reasons why NBFIs are becoming the go-to option for merchants that struggle with traditional banking.
1. Faster onboarding
Most NBFIs offer online applications, and some approve accounts within days. While due diligence is still required, the process is often more streamlined and adapted to online businesses. For example, a dating app based in Cyprus might wait months for a traditional bank to open an account. An NBFI like Payset or ConnectPay might offer the same service in under two weeks, with real-time updates.
2. Support for cross-border payments
Many high-risk merchants work with international clients. NBFIs often specialize in multi-currency accounts and faster settlement times. They use networks like SEPA, SWIFT, or local payment rails to reduce costs and speed up transfers.
For instance, a coaching business selling digital courses in Europe and Asia can use an EMIs like Wise or Nium to receive payments in multiple currencies and convert them at better rates than most banks offer.
3. Better risk tools
NBFIs understand the pressure high-risk merchants face. Some provide dashboards that track chargebacks, fraud rates, and settlement delays. Others partner with fraud prevention tools or offer pre-integrated KYC and KYB services.
For example, a supplement brand using Checkout.com or Adyen can access real-time analytics and dispute resolution services built into the platform, helping to reduce fraud exposure.
4. More flexibility in accepted business models
While many banks operate with rigid lists of restricted industries, some NBFIs take a more practical approach. They may approve applications based on the merchant’s track record, real data, and transparency rather than judging only by industry label.
That said, not all NBFIs accept all high-risk businesses. Each one has its limits and policies, so doing research is still essential.
3 Examples of NBFIs working with high-risk merchants
Let’s look at a few real-life use cases where NBFIs provided solutions that traditional banks often refused.
Case 1: Crypto brokerage using an EMI in Lithuania
A small crypto exchange registered in Estonia was rejected by five banks. Eventually, it partnered with a Lithuanian EMI licensed under the EU’s PSD2 framework. The EMI provided a EUR IBAN, onboarding tools for KYC, and helped process customer deposits and withdrawals across the EU.
Case 2: Adult entertainment platform partnering with a payment institution in the UK
An adult subscription platform had its account closed by its bank in the US. It shifted operations to a UK-based NBFI that had experience dealing with adult content platforms. The NBFI provided USD and GBP accounts, integrated with card payment gateways, and allowed for weekly settlements. The platform was able to resume operations without major delays.
Case 3: Coaching business migrating to a digital wallet model
A coaching business selling high-ticket mentoring packages often had payments blocked or reversed due to chargeback concerns. Instead of relying on a traditional merchant account, the company used a digital wallet service from an NBFI that offered real-time payment tracking and chargeback mediation. The company also used escrow features for first-time buyers to build trust and reduce disputes.
What to watch out for when choosing an NBFI
While NBFIs can be a great solution, they are not perfect. Here are some points to keep in mind:
- They do not offer full banking protections – most NBFIs are not part of deposit guarantee schemes like the FDIC or FSCS. If the NBFI fails, your funds may be at risk.
- They may have stricter transaction monitoring, because they serve higher-risk clients, NBFIs often apply strict compliance rules. Be ready to provide invoices, customer records, and proof of service regularly.
- Some services can be expensive – fees may include monthly charges, transaction fees, FX spreads, or onboarding costs. Always check the full fee schedule before signing up.
- Not all NBFIs accept high-risk merchants – you still need to prepare good documentation and a clear business model. Transparency is key.
Questions to ask before working with an NBFI
- Do you support companies in my sector?
- What currencies and regions can I receive and send payments to?
- How do you handle chargebacks and fraud monitoring?
- Are you regulated, and under which license?
- What onboarding documents do you require?
- Are there limits on daily or monthly transactions?
- What happens if you close my account?
The answers will help you understand how the NBFI works and whether it is a fit for your risk profile and business needs.
The outlook for 2025 and beyond
As regulators and card schemes tighten rules for banks, high-risk merchants will continue to face pressure. At the same time, NBFIs are growing rapidly and filling the gap left by traditional institutions.
In 2025, many forward-thinking merchants are using NBFIs not just as a backup plan, but as their main financial partner. With the right setup, it is possible to operate legally, securely, and at scale, even if you are in a tough industry.
Some NBFIs are also applying for full banking licenses or partnering with licensed institutions to offer even more services. This means the line between banking and non-banking financial services may continue to blur in the years ahead.
Bottom Line
Non-Banking Financial Institutions are becoming a real option for high-risk merchants who need fast, flexible, and reliable financial services. While they do not replace banks entirely, they often offer better support for digital-first businesses that have been left behind by the traditional system.
If you are struggling with account closures, long onboarding times, or payment restrictions, it may be time to explore what NBFIs can offer. With proper due diligence and the right partner, you can reduce risk, improve your payment flow, and build a stable foundation for growth.
If you want to know more about this matter, don’t hesitate to schedule a free consultation with our team.
For more industry insights, check out our article “How Can Merchants Recover from Frozen Accounts? A Real Case”
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.
