High Risk Business

Some business models carry higher financial, fraud, or compliance risk due to their nature, transaction patterns, or regulatory exposure.

Chapa classifies these as High-Risk Businesses and applies additional monitoring, controls, and restrictions to protect customers, merchants, and the payment ecosystem.

Being classified as high risk does NOT mean your business is doing something wrong — it simply means extra safeguards apply.

What Is a High-Risk Business?

A business may be considered high risk based on:

• Industry type
• Transaction behavior and volume
• Chargeback or refund rates
• Regulatory or compliance exposure
• Geographic or currency risks

Risk classification is dynamic and may change over time.

Common High-Risk Categories

Examples include (but are not limited to):

Financial & Money Movement

• Wallets and stored-value systems
• Crypto, forex, or investment platforms
• Lending, credit, or BNPL services
• Crowdfunding and pooled funds

Digital & Intangible Goods

• Digital subscriptions
• Online courses and memberships
• Downloadable content
• SaaS with recurring billing

Marketplaces & Platforms

• Multi-vendor marketplaces
• Escrow-based platforms
• Peer-to-peer payment services

Sensitive or Regulated Goods

• Gambling or betting
• Adult content
• Pharmaceuticals and supplements
• Ticket reselling

Why Extra Controls Apply

High-risk businesses have a higher likelihood of:

• Disputes and chargebacks
• Refund abuse
• Fraud attempts
• AML / KYC concerns
• Regulatory scrutiny

Chapa introduces safeguards to:

• Protect customers
• Reduce ecosystem risk
• Ensure compliance with local and international regulations

Additional Controls You May Encounter

1. Transaction Monitoring

• Real-time risk scoring
• Pattern and velocity checks
• Detection of unusual amounts or frequency

2. Payment Restrictions

• Lower transaction limits
• Delayed settlements
• Limited payment methods
• Manual review for certain transactions

3. Payout Restrictions

• Payout delays or temporary holds
• Extra verification before large transfers
• Reduced payout frequency

4. Refund & Dispute Controls

• Tighter refund rules
• Increased dispute review
• Evidence requirements for dispute responses

Webhook & Status Implications

High-risk activity may trigger special statuses such as:

• payment.blocked
• payout.blocked
• auth_needed (for additional verification)

Example Webhook

{
  "event": "payment.blocked",
  "reason": "COMPLIANCE_REVIEW"
}

Your system should handle these states gracefully and notify users appropriately.

How to Reduce Risk Flags

You can lower your risk profile by:

• Providing clear and accurate business information during onboarding
• Having transparent pricing and refund policies
• Minimizing refund and chargeback rates
• Using clear and consistent merchant references
• Avoiding misleading product descriptions
• Communicating clearly with customers

Best Practices for High-Risk Businesses

• Always rely on webhooks for final transaction states
• Never assume immediate settlement
• Expect additional verification for large transactions
• Maintain clean internal audit logs
• Respond quickly to dispute and documentation requests

What Happens If a Business Is Blocked?

In rare cases, Chapa may:

• Temporarily pause transactions
• Block payouts
• Request additional documentation
• Terminate access if policy violations persist

You'll be notified through:

• Dashboard alerts
• Webhook events
• Direct communication from Chapa support

Key Takeaways

Next Steps

• Security Guide - Core security practices
• Webhooks - Handle webhook events
• Verify Payment - Verify transaction status