The technical industry is considered as one of the fastest growing industries. But despite that fact, many banks aren’t eager to approve merchant accounts for businesses in this sector. They need the merchant accounts to allow them to process payments, including credit card purchases.Tech support merchant accounts provide credit card processing solutions to tech support businesses. Tech support industry is considered ‘high risk’ by traditional merchant processors and getting a tech support merchant account can be very difficult.
Example of tech business are businesses that offer the following services including those offering remote services.
- Mac or PC security services
- Hardware and router configuration
- Browser and email support
- PC optimization
Why It is so hard to find a reliable credit card processing services as a tech support merchant
It is really hard to find a reliable credit card processing services as a tech support merchant. It is because when banks hear the words “tech support” they can’t help but associate it with the rampant “tech support scams”. Scammers have consistently use the guise of “tech support” to conned people of their personal information and their money. One of the most common thing that these scammers do are to send pop-up messages that warn users about computer problems. The supposedly “techs” will call and pretend to help users claiming to try to that they have detected viruses or malware on the person’s personal computer and will persuade the person to enroll in a subscription plan that is a made-up solution to a non-existent problem and protect it from other problems in the future. Scammers do this over and over, being able to steal many people’s personal information and money, it was reported by the Federal Trade Commission that the estimated consumers lost from tech-support scams are about $24.6 million in 2015 and 2016. On average, a consumer loses about $280 on each scam.
The rampant fraud in the tech support industry associated with high chargeback makes it hard for legitimate tech support businesses that want to accept credit card transactions to turn to high-risk merchant account provider because banks are don’t want to make business with them. Most of the merchant account provider offers compliant tech support payment gateways for authorizing credit card transactions along with tech support merchant processing services. Their services may also include remote tech support businesses, chargeback management tools, and fraud filter for online payments.
Generally, a tech support online or retail business can open a tech support merchant account by finding the right payment processor and by reading the documents required by the payment processor like one valid government-issued identification card, bank letter, processing statements, recent bank statements if applicable, Social Security Number or Employer Identification Number whichever is applicable and chargeback ratios that must be under 2%.
One factor that should also be considered in choosing the right payment processor to open up a tech support merchant account is the credit card processing volume cap. This means that merchants are limited by a certain determined dollar figure that they can accept credit cards. Once the limit is reached for the month, it is as if the merchant’s business is closed because it could not accommodate card payments anymore.
Processors and underwriters review and validate that the tech support business applying for a merchant account is a running legitimate business with good reputation by going thru its submitted requirements. They also get a total view of business risk, merchant’s credit scores, and credit card processing history, bank statements, and its website. Privacy and refund policies must be clearly stated in the website, otherwise, it will have a negative impact against the merchant. These things must be avoided to avoid increasing the risk to a processor – negative bank account balance, unpaid bills and late payments, and a history of high chargeback rates.
Merchants must make sure that outstanding bills and debts are taken care of, a substantial amount of money in the bank is one of the things that must be prepared for the application review. The merchant must be able to convince and shoe to the processor that they are not taking any undue risk if they will approve a tech support merchant account.
Remote tech support faces high chargebacks because unfortunately, these tech support businesses are poorly operated businesses who don’t have excellent customer service leading them to have many dissatisfied customers. It must be noted that unhappy customers lead to a high volume of refunds and chargebacks. These tech support businesses offer services that are not tangible in nature and the lack of a tangible item can make some customers feel like the purchase they made is invaluable. It is a must that a complimentary follow-up service must be given to make the customer feel appreciated.
Also, many chargebacks are results of customers not being able to remember or recognize the said transaction reflected in their credit card statements. To prevent this from happening there must be a clear billing descriptor that includes the merchant’s name and contact number.
Processors care much about chargebacks and chargebacks even of a small amount still contribute to the chargeback ratios. Excessive chargebacks are a sign that the business model of the merchant is flawed since chargebacks are caused by the dissatisfaction of customers, problems in customer service and a not sufficient fraud and chargeback mitigation plans.
Credit card processors get penalized for a large volume of chargebacks exceeding the 2% limit from credit brands like Visa or MasterCard. The fines can sum up to thousands of dollars thus making merchants with high chargebacks a financial burden for them. That is why they can terminate those with 3% chargeback ratio. And if the business lost its merchant account, it became very difficult for them to get approved for a new one.
For merchants seeking a Tech Support Merchant Account, iPayTotal can offer stellar solutions and fast approvals. Regardless, we are always up for a discussion with like-minded merchants about payment processing possibilities. Speak one-on-one with a live merchant account manager at +(44) 800 776 5988