With businesses in the tech industry experiencing massive growth in recent times, many individuals and companies are taking an interest in their services for potential partnerships. However, financial institutions, especially traditional banks, aren’t in a rush to create any form of relationship with most tech businesses.
As a result, finding merchant accounts that will help tech businesses grow takes more work than you might expect. These banks are well within their rights, considering the amount of “tech support” related frauds they have to deal with yearly. The reputation of these companies among customers isn’t any better since many of these individuals have been victims of tech support scams in one way or another.
To ease the pressure on tech support companies, PaymentUSA offers payment gateway services for tech support businesses. To make this possible, the merchant account provider has a high-risk merchant account available for tech support businesses.
A payment gateway is software that connects your business (the merchant) to your customers. To make this connection possible, the payment gateway reads the payment information provided by the customer and sends it to the acquiring bank.
For the payment gateway to function effectively, five parties must be involved –
Payment gateways operate using a general process as follows:
Tech support payment gateways are unique because they’re considered high-risk services to businesses in this industry. Most payment gateways choose to overlook these businesses by offering their services only to merchants in low-risk industries.
There are several reasons financial institutions turn away tech support businesses, and we’ll let you in on some of these reasons.
A high-risk business is one whose operations come with a high chance of financial failure. Several factors lead financial institutions to brand a company as high-risk, and these include –
Of the factors stated above, a tech support business is susceptible to two – fraud and chargebacks. This makes established financial institutions wary of their operations. However, high-risk merchant account providers are available to support these businesses.
Tech support businesses operate in an industry that exposes them to high chargeback rates and fraud. These two issues create trouble for both traditional banks and payment gateway providers, who choose to avoid these risky situations entirely.
So, how do fraud and high chargeback rates create a high-risk situation? The issues payment providers and banks have with tech support businesses stem from the activities of tech support scammers operating in the industry. These scammers are notorious for placing phone calls to unsuspecting customers and pretending to be representatives of a legitimate tech company.
To get customers to trust them, these scammers often find a way to get fake pop-up messages on computer screens, forcing them to reach out to fake support hotlines to get help. Once customers reach out to these hotlines, they’re convinced to subscribe to a service or make a one-time payment. Customers may then discover that they have fallen for a scam. Their first action is to reach out to their bank to process a reversal – or chargeback.
With these potential issues in view, traditional banks choose not to offer their services to tech support businesses, even if they’re legitimate. As a result, high-risk merchant account services are the only available options for these businesses.
As a business, you may be wondering why payment gateway providers and banks have issues with high chargebacks. In your view, your business has to refund the money, so why does it bother these financial institutions?
In reality, excessive chargebacks significantly impact payment gateway providers since they may need to pay a fine. In most cases, the fine is triggered when a merchant has a chargeback ratio of more than 2%. Now, imagine a tech support payment gateway provider with 50 merchants paying a fine on the operations of 25 of these merchants. The losses begin to add up, and the payment gateway operator begins to feel the financial burden.
Payment gateway providers pay attention to businesses with excessive chargebacks to minimize this risk. Excessive chargebacks indicate an issue with the business operations, many disgruntled customers, and potential exposure to fraud. Also, if your business shows a sudden increase in chargeback ratio, you risk losing access to a high-risk merchant account service. Getting a new account isn’t a walk in the park, so it’s vital to ensure your chargeback ratio doesn’t reach 3% with any operator.
When selecting a payment gateway for your business, you must ask some critical questions. Depending on your answers to these questions, you can narrow down the list of suitable options.
Picking a third-party service may seem like an unnecessary expense for a small business, but there are many benefits to selecting this option. These payment gateway providers can help your business improve the customer experience and provide additional security for your customers.
When submitting your application for a tech support payment gateway, there are specific requirements your business must meet. These requirements include the following:
To verify the legitimacy of your business, you must provide a business license. This license should be from the city or state where your company operates.
The voided check is used to verify your business account information. A bank letter is also acceptable if a check is unavailable.
Depending on your business history, you may need to provide a personal financial statement and a two-year financial statement for the business. These may include tax returns, banking statements, etc.
These documents give the payment gateway operator insight into how you run the business. Billing policies, business plans, and refund policies are some of the documents we may request.
Since your business is in a high-risk industry, we want to learn about your chargeback history and monthly processing volume. Too many chargebacks without a valid reason may be an issue.
High-risk merchant accounts have a processing volume limit during the initial months of operation to limit our risk exposure. Your business has to use the services of the payment gateway provider for a few months before it will consider increasing this limit.
This processing volume limit is an additional protection high-risk merchant account providers put in place to minimize their risk exposure when working with tech support companies. Generally, you can request a limit increase after working with the provider for three to six months.
There are different ways to set up a payment gateway for your business, and some merchants opt to build a custom gateway. Although this option sounds attractive, many steps are involved, and you must be sure your business can handle such a huge step.
If you want to consider building a custom gateway for your business, then you must perform the following actions:
As you can see, setting up a custom gateway takes time, effort, and money. For small businesses, this isn’t a viable option. That is why using a tech support payment gateway from a provider like PaymentUSA is your best option.
To use our payment gateway for tech support, the first step is to sign up for our high-risk merchant account. This merchant account service offers access to chargeback protection, high-level security, and premium customer support. Once the merchant account is set up, PaymentUSA connects you with the option to set up a payment gateway for your tech support business. This process requires you to provide relevant documents and specific structures within your business.
You can learn more about what we require once you formally begin the process with PaymentUSA.
Getting a tech support payment gateway is more complicated than any other financial service you may need for your business. However, businesses that follow through with this process can increase sales and help improve their customers’ security.
With the PaymentUSA payment gateway, you get worldwide coverage for your business, improved security features, and a guard against chargebacks. PaymentUSA plays a significant role in dealing with any chargeback issue you may experience, reducing the chances of you incurring losses due to excessive chargebacks.