Obtaining Software and E-Book Merchant Account
The Internet revolution has made it easier than ever to sell products and services on the world wide web. Obtaining software and e-Book merchant accounts has never been more convenient. When you are dealing with the experts at SecureGlobalPay who specialize in online merchant accounts, you can rest assured that your application will get processed asap, and you will be up and running in no time.
Some of these products, such as apps and e-books, are the result of the internet itself and so are uniquely suited to marketing on that platform and obtaining online merchant accounts is a necessity. More than 30,000 new apps are submitted on average to the iTunes App store every month. According to Statista, nearly 200 billion apps have been downloaded from the Apple App store and Google Play worldwide.
Although a good many apps are offered for free, upgraded or improved versions of the same come with a price-tag. As apps and Virtual Reality devices continue to proliferate and evolve, the ability to accept payments online will only become more important for software and e-book developers.
Unfortunately, banks and traditional financial institutions are often reluctant to partner with app and e-book merchants. Due to the nature of the business, a high volume of chargebacks (or, credit card disputes) is common. This leads to the business being characterized as high-risk.
SecureGlobalPay specializes in Online Merchants Accounts and providing high-risk software and e-book merchant accounts for businesses of all sizes. SecureGlobalPay offers chargeback management tools, payment gateways, and fraud filters, as well as support, tools, and the expertise needed to process credit card payments successfully for software and e-book merchants.
Benefits of a Software and E Book Merchant Account
A wide-variety of e-publishing platforms are available for e-book authors and app developers. These platforms market themselves as the most convenient options for listing and selling such content.
Unfortunately, these platforms often have “niche” or limited audiences. In order to reach the broadest possible readership, a payment gateway capable of serving multiple customer types across various platforms is necessary.
SecureGlobalPay provides every necessary merchant-account related service, including a secure payment gateway and shopping cart system that provides the price and details of each order.
Obtaining a Software and E-Book Merchant Account
SecureGlobalPay prides itself on making the software and e-book merchant account process simple and easy. Fill out SecureGlobalPay’s quick online application to be considered as a client.
Along with an application, be prepared to submit the following information located here.
NOTE: Your chargeback ratio must be below 2%.
Although no approval is guaranteed, SecureGlobalPay can approve eligible merchants in as little as 24 hours.
The Underwriting Process
Underwriters are tasked with assessing potential businesses for risk. When reviewing an application, Underwriters are concerned with assuring a merchant complies with all industry regulations and follows a business model that reduces the likelihood of chargebacks.
Chargebacks are common in the app and e-book publishing market. Chargebacks occur when credit-card brands, such as Visa or MasterCard, demand a retailer refund any losses due to disputed or fraudulent transactions.
A merchant’s risk is assessed according to several factors, including:
- Credit scores
- Credit card processing history
- Bank statements
- Websites
While conducting their review, underwriters seek to confirm that merchants have no negative bank account balances, outstanding bills, or previously terminated merchant accounts. A history of high chargebacks is also considered as it increases the likelihood that a processor and its sponsor bank will be left responsible for a merchant’s unpaid debts.
Having a secure website that includes prominent privacy and refund policies will also increase a merchant’s chances of approval. Be sure to nominate the business stakeholder with the best credit history to submit the application.
High Volume Software and E-Book Merchant Accounts
To decrease risk, underwriters will sometimes approve accounts with limitations, such as monthly caps on credit card processing volumes. This means merchants are limited as to the number of credit card transactions they can accept each month. Once a merchant reaches that cap that month, it can no longer take credit cards as a form of payment. This essentially shuts down commerce until the next calendar month.
Software and e-book merchants that operate with low chargeback ratios and no unpaid bills can appeal the cap and have it lifted in as little as three months.
Transactions, Fraud and Chargebacks
Online businesses are more vulnerable to chargebacks. The lack of a face-to-face interaction with the merchant makes it that much easier for a customer to change his mind about an order. Online merchants can also end up handling a high volume of transactions. This also increases the likelihood of chargebacks.
Merchants that process a high volume of transactions are less likely to pay attention to individual purchases since they handle so many on a regular basis. Online Merchant Accounts come with online fraudsters that prey on such merchants. Knowing that due to the sheer volume of daily business, it sometimes takes a while before merchants and customers catch on to the fraud. The end result is a higher rate of credit card transactions disputes, which can become potential chargebacks.
Customers who end up receiving a software product or an electronic book, deciding they ‘don’t like it’ and requesting a refund are engaged in what is called ‘friendly fraud.’ These patrons basically want to use a product or service without paying.
Finally, due to the unsupervised nature of the internet, e-book and app merchants can be used as fronts for running scams. Banks can never be sure of online merchant accounts or if a software or e-book merchant will follow through and deliver electronic books or a software program once customers have paid. This increases the risk to the processor and lending bank.
Cracking the Code on Chargebacks
One key to fighting chargebacks is to have an effective customer service plan. Having knowledgeable, trained staff available on 24-hour notice to explain irregularities in shipping and delivery, to field customer complaints and provide refunds reduces the chances of transaction disputes and chargebacks.
Having an automated delivery process can also help merchants avoid trouble with customers The best option is to have an electronic item delivered automatically to a customer after a payment has been received.
Providing customers with itemized receipts that include relevant business information is an excellent customer service strategy. Receipts should include the number and amount of each purchase, the name of the business exactly as it will appear on the credit card bill, and a phone number for customer support.
Since many chargebacks occur within four days of purchases, merchants should stay connected with customers for at least one week after the transaction has been completed. This is especially helpful with software and subscription businesses that bill customers monthly for recurring services. These charges can be for the continued use of an upgraded app or program. Good ways to stay in touch include:
- Sending an email thanking a customer for a purchase
- Sending a final copy of an itemized receipt
- Asking customers to complete customer satisfaction surveys
- Sending a reminder of the recurring charge about a week before it occurs
Taking these small yet important steps can remind customers that they are appreciated. Happy customers become long-term customers.
Chargeback Ratios
A merchant’s chargeback ratio is calculated by the number of chargebacks divided by the number of monthly transactions. For example, a merchant with 300 transactions and 12 chargebacks in a month would have a 4% chargeback.
Industry Categories
Standard Industrial Classification (SIC) codes are four-digit numerical codes given to business establishments by the United States and other countries. The codes aim to identify businesses’ primary purposes.
Typically, the following SIC codes are used for software and e-book merchant businesses:
- 2731: Books: Publishing, or Publishing and Printing
- 2741: Miscellaneous Publishing
- 5045: Computers and Computer Peripheral Equipment and Software
Visit the United States Department of Labor to view a complete SIC list.
Northern American Classification System (NAICS) are categories of six-digit codes used by federal statistical agencies to classify establishments. The information is used to collect, analyze, and publish statistical information about similar types of businesses and the way they impact the economy in the U.S.
The following NAICS codes often are used for software and electronic book businesses:
- 334614: Software and Other Prerecorded Compact Disc, Tape, and Record Reproducing
- 511130: Book Publishers
- 511210 Software Publishers
- 511190: All Other Publishers
- 519130: Internet Publishing and Broadcasting
- 519190: All Other Information Services
- 454111: Electronic Shopping, Internet Retail Sales
Visit the United States Census Bureau’s Northern American Classification System to view the complete NAICS code list.
Merchant Accounts for E-Books & Software
As we become a truly paperless society, software and e-books represent an important and ever-growing market. Businesses that provide software and e-books have enormous profit potential. But the industry’s high volume of transactions, coupled with the accompanying chargeback rates make this business model appear high risk, making approval by traditional banking institutions difficult.
The only way to compete with industry giants such as Amazon is to explore the full range of electronic payment solutions.
Merchant Account with SecureGlobalPay.
We support your electronic payment processing as long as you maintain a chargeback rate of 3% or less.
Apply now and be approved to begin processing credit card transactions in as little as 24 hours.
