Payment Expert Editor Rachael Kennedy says high-risk payments are being re-priced out of sight
Payments have always carried a price tag, but the maths is changing. While the industry spent the last decade obsessed with the front end – faster settlement and one-click checkouts – a much more significant shift has been occurring in the shadows. The economics of high-risk merchant services are being overhauled, not through transparent fee hikes, but through a steady, incremental tightening of the screws.
We’re seeing a fundamental expansion of what risk actually means. Risk once meant managing fraud or chargeback ratios, today, risk is a catch-all bucket for regulatory heat, reputational liability, and the ballooning cost of safeguarding obligations.
Payment providers have stopped pricing transactions and started pricing the sheer exhaustion of keeping them compliant. And the pressure is coming from every direction.
Card schemes have become more aggressive in their monitoring; regulators have lost their appetite for weak controls; compliance departments have transformed into massive, specialised cost centres; and because capital is no longer cheap, the old tools of the trade now carry a much heavier weight on the balance sheet.
This shift rarely makes it onto a standard fee sheet. Instead, the re-pricing manifests as structural friction:
- Settlement cycles that stretch out from days to weeks.
- Rolling reserves that swallow up a merchant’s working capital.
- Narrowing acceptance policies that quietly filter out entire business models.
- Opaque onboarding hurdles that act as a “soft no” before a contract is even drafted.
For the industry’s giants, these hurdles are a rounding error or a negotiation point. For the smaller operators, they are existential threats.
In sectors like iGaming and sports betting, the tension is at its peak. These industries are mature and heavily regulated, yet they sit at a volatile crossroads of finance, politics, and consumer protection. Payments teams are now being drafted as de facto enforcement officers for rules which have nothing to do with moving money – affordability checks, source-of-funds verification, and behavioural monitoring.
Every new mandate adds operational weight, and this weight is never carried by the people writing the rules.
From a provider’s perspective, this defensive crouch is logical. Scheme penalties are brutal, and investors crave the predictability that ‘high risk’ often lacks. Raising the barrier to entry via cost is simply a way to manage their appetite without having to announce a blanket exit from a sector.
The long-term fallout of this trend is a narrowing of the market. When legitimate sectors become too expensive or too noisy to serve, the pool of available providers shrinks. We are left with a dangerous concentration of risk and a market which is far less resilient than it was five years ago.
As we move into 2026, the real story in payments won’t concern the latest buy now, pay later (BNPL) clone or a new rail. Instead, it’ll focus on who is being priced out of the system entirely.
Payments infrastructure has always been a mirror of the values governing it. Right now, those values are pivoting hard toward containment and risk transfer. This shift might be rational from a corporate standpoint, but the collective result is a system fast becoming increasingly exclusive, expensive, and fragile.
This op-ed originally appeared in SBC Leaders March 2026 edition. You can access the full magazine here.
