TL;DR: In 2026, the “high risk index” continues to evolve as regulators, banks, and card networks reassess emerging threats and compliance obligations. Cannabis, firearms, nutraceuticals, travel, and adult entertainment remain under elevated scrutiny — though for different reasons than in years past. Stricter regulatory oversight, data privacy mandates, fraud prevention initiatives, and shifts in global banking policy are reshaping the payment landscape. For merchants operating in these sectors, proactive compliance and trusted processing partnerships are more critical than ever.
Why the High Risk Index Profiles Shift Every Year
The risk profile of an industry is never static. What was considered high risk in 2023 may have normalized by 2026 and vice versa. Each year, the Federal Deposit Insurance Corporation (FDIC), Financial Crimes Enforcement Network (FinCEN), and major card brands adjust their oversight strategies in response to evolving threats such as fraud, chargeback patterns, and reputational risk.
In the payment ecosystem, “risk” isn’t simply about the product being sold. It’s about the likelihood that transactions may involve regulatory violations, financial instability, or increased compliance burden for acquiring banks. When regulators tighten controls or card brands update their monitoring requirements, merchants in those categories can find themselves suddenly reclassified in the “high risk index.”
The Top 5 Industries Facing Heightened Scrutiny in 2026
While dozens of sectors are affected by risk reclassifications each year, five stand out in 2026 for sustained or increased scrutiny: cannabis, firearms, nutraceuticals, travel, and adult entertainment.
Cannabis: Compliance at a Crossroads
Despite historic progress toward legalization, cannabis payment processing remains the most tightly regulated industry in North America. Federal banking restrictions persist, and credit cards still cannot be accepted for plant-touching businesses.
2026 has seen renewed attention from both FinCEN and state regulators on anti-money laundering (AML) protocols and beneficial ownership transparency. Cannabis operators must navigate evolving state licensing, the SAFER Banking Act’s stalled status, and enhanced Know Your Customer (KYC) expectations from financial institutions.
Key risk factors:
- Federal prohibition creates ongoing banking uncertainty.
- Complex state-by-state compliance environments.
- High cash volumes elevate AML and security risks.
Trend insight: FinCEN’s December 2025 update reinforced that even non-plant-touching vendors must demonstrate “reasonable assurance” of end-use compliance. That means payment processors serving the ecosystem — from ancillary suppliers to CBD brands — are under renewed examination.
Firearms: Data Privacy and Transaction Monitoring Front and Center
Firearms merchants have always been under the microscope, but in 2026 the scrutiny has shifted toward data privacy and merchant category coding (MCC) practices. After several U.S. states challenged the introduction of the specific firearms MCC in 2024, the debate over financial tracking of gun sales continues.
Visa and Mastercard temporarily paused implementation in 2025 pending federal review, but acquiring banks are still expected to maintain heightened due diligence.
Key risk factors:
- Political polarization and legal battles over firearm transaction codes.
- Increased oversight on cross-border sales and online transfers.
- Reputation-sensitive banks tightening onboarding standards.
Trend insight: Processors are increasingly requiring transaction-level monitoring and enhanced KYC documentation to ensure merchants are fully compliant with both federal and state-level firearms laws.
Nutraceuticals: FDA Oversight and Chargeback Exposure
The nutraceutical and supplement sector faces mounting regulatory and reputational risk as the FDA expands its enforcement actions around unsubstantiated health claims.
In 2026, the focus is shifting toward AI-powered product marketing and influencer-driven claims, which the FTC now treats as formal advertising. Merchants must substantiate every wellness-related statement and ensure fulfillment and refund policies meet consumer protection standards.
Key risk factors:
- Regulatory ambiguity on “structure-function” claims.
- Chargeback-prone sales models (subscriptions, free trials).
- Advertising compliance under FTC’s updated influencer guidance.
Trend insight: Payment processors are flagging merchants using deceptive marketing funnels, resulting in account terminations. Risk mitigation now requires transparent labeling, compliant checkout flows, and reliable customer service frameworks.
Travel: Fraud, Cancellations, and Economic Volatility
After years of post-pandemic recovery, the travel and hospitality industry is once again facing headwinds. Inflation, geopolitical tension, and climate-driven disruptions are reshaping consumer confidence and refund risk.
Processors are seeing a resurgence in dispute frequency, particularly for airfare, cruises, and short-term rentals. Travel merchants that rely heavily on future-dated transactions — where services are fulfilled weeks or months after payment — remain under higher risk classifications.
Key risk factors:
- Elevated chargebacks tied to cancellations or trip disruptions.
- Escalating insurance and refund obligations.
- Cross-border fraud and evolving AML requirements.
Trend insight: Banks are urging travel platforms to adopt tokenized payments and real-time risk scoring to detect fraudulent bookings and improve dispute resolution performance
Adult Entertainment: Content Verification and Regulatory Complexity
The adult sector remains a lightning rod for both compliance and reputational concerns. 2026 has brought new regulatory pressure surrounding age verification, consent documentation, and content moderation.
Card networks have tightened their adult content compliance frameworks following multiple public controversies. Merchants must now demonstrate granular verification processes and periodic audits to maintain processing privileges.
Key risk factors:
- Expanding legal obligations for content verification.
- Heightened scrutiny from card brands and payment gateways.
- Persistent reputational and chargeback concerns.
Trend insight: Merchants who invest in transparent verification technology and work with processors experienced in high-risk entertainment are finding greater stability and fewer interruptions.
What’s Driving the High Risk Index Shift in 2026
Regulatory Evolution
- FinCEN continues expanding its Beneficial Ownership Information Reporting Rule, heightening compliance expectations for all business types with complex structures.
- The FDIC has flagged “emerging reputational and AML risks” in its 2026 Supervision Priorities report, particularly across fintech and alternative payment providers.
- Visa and Mastercard are tightening fraud monitoring thresholds and updating their Dispute Monitoring Programs, directly impacting merchants with elevated chargeback ratios.
Banking and Policy Trends
- Consolidation among acquiring banks has led to fewer options for high-risk merchants, increasing dependence on specialized processors.
- Enhanced ESG (Environmental, Social, and Governance) screening means reputational concerns now weigh as heavily as financial metrics in underwriting decisions.
- The global pivot toward instant payments and alternative rails introduces both opportunity and new compliance complexities.
Technological and Fraud Dynamics
- Rapid deployment of generative AI in e-commerce marketing has accelerated fraudulent activity and misinformation, forcing acquirers to adopt stricter merchant vetting.
The rise of Buy Now, Pay Later (BNPL) products and cross-border digital wallets has introduced overlapping compliance frameworks across jurisdictions.
Data Points and Citations (2026 Snapshot)
- FDIC 2026 Supervision Priorities cite “increased focus on non-bank payment processors and fintech partnerships.”
- FinCEN February 2026 bulletin emphasizes SAR (Suspicious Activity Report) filings related to unregistered MSBs and cannabis-linked transactions.
- Visa Risk Management Bulletin, Q1 2026 announced an enhanced “Merchant Watch Program” targeting industries with chargeback ratios above 0.75%.
These data points reinforce the broader narrative: risk management in 2026 is less about industry stigma and more about regulatory adaptability and operational transparency.
How Merchants Can Prepare and Improve Their Risk Profile
Strengthen Compliance Infrastructure
- Implement written AML, KYC, and OFAC screening programs.
- Maintain updated ownership documentation and licensing.
- Monitor evolving card brand compliance requirements.
Diversify Payment Acceptance
- Integrate ACH, debit, and crypto-to-cash conversion options where compliant.
- Use backup merchant accounts or load balancing to mitigate interruptions.
- Avoid over-reliance on a single acquirer, especially for cross-border operations.
Invest in Data Security and Transparency
- Adopt PCI DSS 4.0 compliance practices.
- Use real-time fraud prevention tools and transparent billing descriptors.
- Publish clear refund and dispute policies to minimize chargebacks.
Partner with a Reliable High Risk Index Processor
Working with an experienced processor who specializes in regulated industries can drastically reduce operational risk. The right partner can help navigate:
- Complex underwriting requirements.
- Chargeback monitoring and mitigation.
- Evolving card brand and FinCEN compliance standards.
BIG: A Steady High Risk Index Partner Amid Volatility
For over two decades, Bankcard International Group (BIG) has provided stable, compliant payment solutions for high-risk and regulated industries. From cannabis and firearms to travel and nutraceuticals, BIG helps merchants stay operational and compliant even as the regulatory environment shifts.
In 2026, the risk landscape is more dynamic than ever — but with the right processing partner, merchants can thrive amid uncertainty.
Ready to work with a payment partner who understands the High Risk Index your business?
Contact Bankcard International Group today at 1-800-895-1580 or info@bighqs.com, or visit bankcardinternationalgroup.com to get started.
