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Term Definition
High-Risk Merchant An identification by a Card Processor of a business that operates in a high-risk industry, sells products or services that experience a high level of chargebacks, is prone to fraudulent transactions, and/or receives stolen credit cards High-risk merchants pay high card processing fees and are often unable to open an onshore merchant account.
Holdback A fixed amount held in reserve by an account holder to cover possible expenses or losses Holdbacks are frequently applied on new high-risk merchant accounts. A holdback is usually the sum of a percentage of all transactions. Holdbacks cover potential chargebacks, expenses, and/or disputed charges. According to the contractually-agreed time period, processors return holdbacks to merchants in good standing.