According to a study conducted by the Pew Research Center, 46% of users confided that they “could not live” without their Smartphones. This is unsurprising, given our modern reliance on such tools for everything from business to entertainment to making personal connections. If your business model caters to this industry, getting approved with a merchant account to sell online electronics has never been more important. Let SecureGlobalPay guide you down the path towards approval.
According to a 2014 survey, the average household spends $1,600 per year on consumer electronics. This includes an average of $555 on new electronic devices. Sales revenue of consumer electronics such as Smartphones, MP3 players and tablets are expected to grow by almost 10% annually to exceed $427.7 million by 2022, according to Statista.
The emerging market in the electronics business sector is a lucrative one. But merchants seeking to open an online electronics business face unique hurdles. Traditional banks and financial institutions are reluctant to approve online merchant accounts for such businesses due to the industry’s reputation for excessive chargebacks.
Businesses seeking to obtain online merchant accounts in the electronics sector must partner with an online payment processing provider that understands these unique challenges. Companies seeking to efficiently process online credit card payments would do well to consider SecureGlobalPay.
Types of Online Electronics Business Merchant Accounts
The market for both new and used electronics is constantly expanding. Successful merchants must keep up with the popular demand for products. Online electronics businesses can best anticipate customer needs by keeping a broad inventory of products available for purchase by online customers.
SecureGlobalPay provides merchant accounts for businesses offering the following products and services:
- Audiovisual equipment
- Cameras and camcorders
- Computer hardware and software
- Desktop and laptop computers
- Media players and recorders
- Mp3 players
- Photographic equipment
- Surround-sound stereo systems
Whether yours is an online or brick-and-mortar style business, SecureGlobalPay provides the payment gateway products and services needed to help your company succeed.
Applying for an Electronics Business Merchant Account
Begin the process by filling out SecureGlobalPay’s simple online application. Be prepared to provide the following items to our underwriters as standard supporting docs needed when underwriting your account.
Although an application does not guarantee approval, SecureGlobalPay does guarantee potential clients a fair and secure application process. Apply today to become approved in as little as 24 hours.
The Underwriters’ Review
One portion of the application process is submitting to the Underwriter’s review.
The Underwriter’s goal is to establish that the applicant is running a reputable business that conforms to all relevant laws and industry policies. During their review, underwriters are on alert for any questionable practices that could negatively impact credit card processors. Underwriters seek to ensure that merchants operate according to a sound business model that is unlikely to result in a high volume of credit card transaction disputes.
When assessing risk, underwriters initially consider the following items as some of the main factors when underwriting merchant accounts. Merchants with a history of negative bank balances, high chargebacks and unpaid bills are seen as a risk. Such merchants are less likely to be approved for merchant accounts.
E-commerce businesses seeking to increase their chances of approval should:
- Accrue savings
- Satisfy all outstanding bills and debts
- Encourage the principal in their business with the best credit history to apply for the merchant account
Merchants who take these steps increase their likelihood of approval while avoiding merchant accounts with caps on higher processing volumes and lower rolling reserves.
High Price Tags Can Often Lead to Excessive Chargebacks
In general, electronics are expensive. For example, a new Apple iPhone costs about $1,000. Merchants that sell expensive items are more likely to experience excessive chargebacks.
High-price items present a temptation to shoppers. People want the latest, most cutting-edge technology but can get sticker shock when they see their credit card statements. Whether they can afford an item or not, customers are more likely to dispute high-dollar items. Such chargebacks are examples of ‘friendly fraud.’
Protect your business against fraud of all kinds with SecureGlobalPay’s Payment Card Industry Data Security Standard (PCI DSS) gateways and chargeback management tools.
What does PCI DSS-Compliant Mean?
The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards that ensures all companies that accept, process, store, or transmit credit card information do so in a secure environment.
PCI DSS, administered and managed by the PCI Security Standards Council (SSC), is a widely-accepted set of policies aimed at optimizing the security of credit and debit card transactions while protecting cardholders’ personal data.
PCI DSS appliesies to organizations of all sizes, regardless of their transaction volume. Major credit cards, including Visa, MasterCard, American Express, Discover and JCB, formed the PCI SSC. Compliance is enforced by the credit card companies themselves.
Why are PCI-Compliant Payment Gateways Important?
Always remaining PCI-compliant requires constant software updates to ensure the latest version of standards is upheld. Businesses that utilize an online payment gateway such as SecureGlobalPay need not concern themselves with updates. These appear automatically the next time the merchant logs onto the system.
Gateways also enable businesses to expand by offering interfaces that allow merchants to grow e-commerce. Automated processing systems can help them keep track of expanding revenue.
Excessive Chargebacks Hurt Credit Card Processors
Merchants with excessive chargeback rates risk burdening their processors with thousands of dollars in financial penalties. When businesses exceed a 2% chargeback ratio, credit card companies such as Visa and MasterCard can fine processors.
Merchants that cost processors money get shut down. Merchants with chargeback ratios of more than 3% (or 3 in 100 transactions) will be deemed excessive and shut down by their gateway provider.
Stop Chargebacks in Their Tracks
Here we list some of the most popular ways of preventing and reducing chargebacks.
Good customer service is essential to avoiding chargebacks. Merchants that are trusted and transparent are less likely to encounter disputes from customers. While there will always be dissatisfied customers, quality products, good customer service, and a willingness to hear client concerns builds trust.
Building good customer relations can be done in many ways. Providing electronic receipts and sending customer satisfaction surveys following transactions are good ways to keep your business at the forefront of your customer’s mind. Sending an electronic receipt with your company’s contact information, such as an email and billing support phone number, will help jog a customer’s memory about a purchase. This will also lessen the chance of a customer failing to recognize a line item on his credit card bill.
Customer satisfaction surveys provide excellent opportunities to improve business practices by gathering data. They also provide merchants with another opportunity to remind customers about their high-ticket purchases.
Providing 24-hour customer service support can also help you avoid transaction disputes. Well-trained and available staff can offer full refunds to customers, or propose other solutions besides disputing a charge.
Use These Online Electronics Business Categories
Federal agencies classify businesses using a list of six-digit numerical codes known as the North American Classification System (NAICS). The data is used to collect, analyze, and publish statistical information about similar types of businesses and assess their impact on the U.S. economy.
Electronic businesses often use the following NAICS codes:
- 443142: Electronic Stores (smartphone, accessory, and tablet sales)
- 334310: Audio and Video Equipment Manufacturing
- 454111: Electronic Shopping
- 454112: Electronic Auctions (such as online discount electronic auctions)
Visit the United States Census Bureau’s North American Classification System to view the complete NAICS code list.
The four-digit numerical Standard Industrial Classification (SIC) codes are used to identify businesses by industry and type. SIC codes are assigned by the United States and other countries, like the United Kingdom.
The SIC codes most frequently used for online electronic businesses are:
- 5045: Computers and Computer Peripheral Equipment and Software
- 5064: Electrical Appliances, Television and Radio Sets
- 5065: Electronic Parts and Equipment, not elsewhere classified
- 5099: Durable Goods, not elsewhere classified
- 5731: Radio, Television, and Consumer Electronics Stores
- 5734: Computer and Computer Software Stores
- 5735: Record and Pre-recorded Tape Stores
- 5946: Camera and Photographic Supply Stores
- 5999: Miscellaneous Retail Stores, not elsewhere classified
- 7378: Computer Maintenance and Repair
- 7622: Radio and Television Repair Shops
Visit the United States Department of Labor to view a complete SIC list.
Merchant Accounts for Online Electronic Stores
SecureGlobalPay can help your online electronic business get advanced fraud protection and innovative gateway features.
Let us help you find the perfect, cost-effective merchant account to get your electronics business off the ground.
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Secure Payment Gateway
- FAST Approval Times.
- High volume? No problem, we can help!