Finding an online payment gateway for a tech support business can be tricky. There are a variety of providers in the marketplace, but not all are interested in working with a tech support company. Keep reading to learn more about why banks are hesitant to work with tech support companies and what you can do to secure a merchant account for your business.
Merchant Accounts for Tech Support Businesses
If you run an online tech support company, the ability to accept payment from your customers is critical. Some tech support businesses allow customers to pay on a per-usage basis, meaning the customer calls tech support when they have an issue and pays a flat fee for the one-time service. Other tech companies offer subscription-based services in which their customers pay a monthly, recurring charge for the services rendered.
Tech support companies need a payment processor who can support both types of payments. If your processor can handle single payments and subscription payments, you’re on the right path. However, many providers will charge significantly more in fees to cover their own risk in serving a tech support company.
If your business is involved in any of the following activities, you may struggle to find a payment process to serve you.
- Computer Repair
- Antivirus Software
- Email and Network Support
- Malware and Ransomware Removal
- Operating System Troubleshooting
- Etc.… (the list goes on)
All of these activities are services that you can offer to your customers in exchange for payment. Unfortunately, many banks refuse to work with tech support companies who offer such services. As indicated above, this is largely due to the risk of fraud involved.
Why is it Difficult to Get a Merchant Account for Tech Support?
Tech support businesses are an important part of commerce today, but banks are hesitant to provide services to them for fear of fraud. The industry has a stigma due to the number of scams that have occurred over time. As a result, many legitimate tech support companies have to use high-risk merchant accounts and pay higher fees.
History of Fraudulent Activity in Tech Support
For the last 10 years or more, the tech support industry has experienced an increase in scammers posing as legitimate companies. These cybercriminals convince customers that there is something wrong with their PC or other device and convince them to purchase tech support services to correct the issues. In most cases, there are no issues with the device and the consumer is simply being scammed into paying a one-time or monthly recurring fee for services that do not exist and are not necessary.
High Risk for Chargebacks
Businesses like tech support are considered high risk for many reasons. Tech support companies often suffer from a high volume of chargebacks because customers either don’t understand the services they purchased or have buyer’s remorse after the fact. They also may sign up for a monthly recurring service, forget about it for a while, and then stumble upon the charges several months later their credit card statement. This can also cause chargebacks because the customer wants their money back after forgetting or not realizing that they signed up for a monthly subscription service.
High Ticket Amounts
Another indicator of a high-risk business is the average ticket amount. Businesses who have high average ticket amounts are riskier for banks than those with smaller transactions. This is also due to a high instance of buyer’s remorse and/or chargeback fraud. Since tech support services are often priced at a premium, they have a higher risk of chargebacks.
Tech Support is a Service
Businesses that offer a service rather than tangible goods have a higher risk for chargebacks and unhappy customers. In many cases, consumers don’t understand the tech support that they have purchased and therefore have the wrong expectations. When technical issues arise, they may not understand what their tech support provider is or is not responsible for. As a result, the customer may file for chargebacks or request refunds.
High Risk Payment Processing
Being a high-risk merchant doesn’t mean you’re running a bad business. It just means that banks consider your business to be higher risk than others. As discussed previously, high-risk merchants are those who have some of the following characteristics:
- High Transaction Volume
- High Ticket Items/Services
- Subscription Billing
- High Number of Chargebacks
- Industry With a History of Scammers
A business that offers subscription billing is a higher risk to the bank. This is because customers will often set up the auto-billing and then forget about it. When they finally check their card statement and see the charges coming out each month, they call the bank and ask for a chargeback, rather than calling the merchant to cancel the subscription.
Don’t get discouraged. Just because your business might be classified as high-risk doesn’t mean you can’t get a merchant account. You just need to do some research, speak to some providers, and find the right fit for you.
How to Get a Merchant Account for Tech Support
Applying for a merchant account is simple in most cases. The important part is to do the research first and find the provider who can best serve your business needs. Finding the right processor for your tech support business will be a mix of personal preference and services available. Here, we break down some of the most important considerations for you as a merchant.
Security
This should be absolute top-of-mind for you as a merchant. You have the responsibility of protecting your customers’ data when they do business with you. When looking at payment processors, be sure to ask about PCI compliance.
Your processor should not only be PCI compliant, but also offer a variety of other security features. Some companies have an entire suite of security tools, while others get by with the basics. Consider the level of security you want to offer and find a processor who can do it.
Fee Structure
For obvious reasons, you’ll want to check out the fee structure of the various processors before making a decision. Fees can include monthly fees, setup fees, per-transaction fees, and more. This is like opening a checking account and looking for one that doesn’t charge a monthly service fee.
The fees for a tech support business are likely to be higher than those of other businesses. This is because of the high-risk classification. Be sure to compare the fee structure options that are available to you. They will likely be some or all of the following:
- Interchange Plus
- Tiered
- Flat-Rate
- Subscription
Ask your potential processor to break down each of the options for you so you can make an informed decision that will offer great service at the best price.
Customer Service
Another important aspect of your payment processor should be customer service. Look at reviews and ask for references regarding the service provider by the processor. If you’re an online business that operates 24 hours per day, you may want to consider a processor who offers 24/7 support. At minimum, they should offer support throughout the week, as well as training and implementation strategies for you and your team.
Final Thoughts
If your tech support business has been classified as high-risk, relax! It isn’t a devastating blow to your business as other businesses accept high risk payments, like online casinos echeck payments. It just means that you’ll need to be a little savvier about what companies you use for payment processing. Understanding the pricing options and the reasons for the high-risk classification can put you in a strong position to negotiate your fees.