According to the think tank, Pew Research Center, 46% of smartphone owners said, “they couldn’t live without” it, according to the Pew Research Center. Not surprising since smartphones are the only way some people tap in to the internet, using it for everything from making reservations and applying to jobs to checking out social media to find out what’s happening with a former best friend.
Consumer electronics include a variety of items, including electrical and household appliances. An average household spends $1,600 per years on consumer electronics, which included about $555 dollars on new electronic devices, such as smartphones, mp3 players, and tablets, according to a 2014 survey.
Statista, an online portal of statistical resources, show that consumer electronics is expected to rake in more than $271 million revenues in 2017. By 2022, revenue is expected to grow annually by 9.6%, resulting in a volume spike of more than $427.7 million.
Numbers don’t lie. The electronics business sector is a lucrative industry that is growing. Budding and established entrepreneurs are getting their pieces of the action by opening online electronic businesses. The problem is that businesses find them too risky to approve them for merchant accounts due to the history and background of the industry and their reputation for having excessive chargebacks. Chargebacks are when act credit card provider demands a retailer refund the loss on a disputed or fraudulent transaction.
A legitimate e-commerce company that wants to process credit card payments efficiently and effectively must turn to SecureGlobalPay, a credit card processor, for an online electronics business merchant account.
SecureGlobalPay can approve merchant accounts for online electronics businesses within 24 and 48 hours. Additionally, merchants can count on SecureGlobalPay for chargeback management tools, PCI-compliant payment gateways, and fraud filters. Merchants that want to help their businesses succeed need to be able to accept credit card transactions. Begin the process now by filling out SecureGlobalPay’s quick and easy online application today.
Types of Online Electronics Business Merchant Accounts
New and used electronics, such as smartphones, tablets, and laptops, are part of an industry that is hot and expected to pick up steam. To keep up with the popular demand of products, online electronics businesses need to keep a constant inventory and secure payment processing solutions via merchant accounts.
Get a merchant account from SecureGlobalPay for businesses that offer the following products and services related to:
- 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
Online businesses that don’t see the services or products listed here and need help processing credit card payments should begin the application process today. High-risk merchants are SecureGlobalPay’s specialty and the firm’s experts will work hard to help bricks-and-mortar and online businesses of all sizes to succeed. Start the process by applying for a collection agency merchant account now.
Documents needed to get an online electronics business merchant account
To obtain an online electronics business merchant account, businesses must begin by filling out SecureGlobalPay’s simple online application. After submitting the application, merchants will need to provide the following items to underwriters:
- A valid, government-issued ID, such as a state-issued driver’s license
- A bank letter or a pre-printed voided check
- 3 months of the most recent bank statements
- 3 months of the most recent processing statements, if applicable
- A SSN (Social Security Number) or EIN (Employer Identification Number)
- A secure, fully-operational website with trusted privacy and refund policies
- Chargeback ratios must be under 2%
SecureGlobalPay cannot guarantee an approval, but it does promise applicants a fair, secure process. SecureGlobalPay and its team of experts is dedicated to helping customers operate and succeed in their online endeavors. Apply today and get approved as little as 24 hours and begin processing credit card payments.
Underwriters’ application review – where and how risk is assessed
When underwriters begin reviewing applications, they want to find online electronics businesses that are law-abiding, reputable businesses. During their thorough reviews, underwriters look for any questionable practices that could financially hurt credit card processors. Ultimately, they want to know that merchants have a good business model, which won’t result in a high volume of credit card transaction disputes.
To determine risk, underwriters look at merchants’ credit scores, credit card processing history, bank statements, and their websites. If a business was shut down by another processor in the past, that will also increase a merchant’s risk. Merchants that carry bank accounts with negative balances, excessive chargeback ratios, and have a history of missing payments or not paying bills will be considered negative strikes to underwriters. The more negative strikes against an online business, the greater risk to a processor and the less likely they will be approved for merchant accounts.
E-commerce businesses that want to increase their chances of approval should:
- Accrue a substantial sum of money in the bank
- Satisfy outstanding bills and debts
- Encourage a principal in the business with a stellar credit history to apply for the merchant account
Most importantly, businesses should handle anything that looks suspicious before allowing an application to go before an underwriter. In the end, smart merchants will want the best possible application before an underwriter, so they can get approved for an online electronics business merchant account without limits, like caps on higher processing volumes and lower rolling reserve.
High-price tags lead to excessive chargebacks
A new Apple iPhone costs about $1,000. That’s just one example. Innovation often comes with a high price. In general, smartwatches, smartphones, smart TVs, and electronics are expensive. This is one of the major reason why these types of purchases lead to excessive chargebacks.
High-cost items, like electronics, often have double the chargebacks than other purchases. People want the latest, most cutting-edge technology but get sticker shock when they see their credit card statements. Whether a customer thought their budgets could handle it or not doesn’t matter. Customers often will still dispute the transaction. This is considered friendly fraud, which means a credit card wasn’t stolen to pay for it. Basically, the customer simply had a change of heart.
Any chargeback that is not a result of fraud is considered friendly fraud. Friendly fraud occurs when clients make online purchases with their own credit cards, and then, contacts the issuing bank and requests a chargeback after receiving their purchased products. Also, there is plenty of credit card fraud within this industry, again, due to these items being out of the price range of many customers.
One way to combat to protect against fraud is to use one of 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 aims to ensure that all companies that accept, process, store, or transmit credit card information due so in a secure environment. PCI DSS, which is administered and managed by the independent body, PCI Security Standards Council (SSC), is a wide-accepted set of policies aimed at optimizing the security of credit and debit card transactions while protecting cardholders from having their personal information misused. The standards apply to organizations of all sizes and regardless of the number of their transactions. Major credit cards, including Visa, MasterCard, American Express, Discover and JCB, formed the PCI SSC. The credit card brands enforce compliance of the standards, not the acquirers.
Why are PCI-compliant payment gateways important?
Software users are responsible for all updates needed to keep it PCI-compliant. If there is an update, there’s no installation to worry about if a business uses a gateway. Updates appear the next time a merchant logs into a system. Gateway users only need to do typical best practices update to their operating system and browser security.
Gateways also make it easier to expand in the future. Processors that offer gateways have other interfaces that allow merchants to expand to e-commerce or an automated processing system as their businesses grow.
Excessive chargebacks hurt credit card processors
When merchants have excessive chargeback rates, credit card processors can get hit with thousands of dollars in financial penalties per merchant. Whenever a business exceeds a 2% chargeback ratio, credit card companies, such as MasterCard and Visa, can fine processors.
When this occurs, the merchants are no longer profitable enough for credit card processors, leading them to shut down high-risk merchant accounts with chargeback ratios of more than 3%. If a merchant has 100 transactions and four chargebacks in a month, the business has a 4% chargeback. Since there are small margins for error, merchants must do whatever they can to avoid chargebacks.
Stop Chargebacks in Their Tracks
It may sound trite, but the best way to avoid chargebacks is to kill customers with kindness. The more trusted and transparent merchants seem to customers, the less likely they are dispute a credit card transaction. Though there is always going to be some displeased customers, when merchants offer quality products, good customer service, and a willingness to listen to and help clients, it makes an impression.
Electronic receipts and customer satisfaction surveys are good paths that lead to satisfied customers. Many chargebacks are a result of customers not remembering or recognizing transactions when they review their credit card statements. Sending an electronic receipt with the merchant’s contact information, such as an email and billing support phone number, will help jog a customer’s memory about a purchase.
Sending a customer satisfaction survey email immediately after a purchase or some time before customers receive their credit card statements also is helpful. Survey results could be helpful in creating better customer service in the future. It also gives a merchant another opportunity to remind customers about the high-ticket purchases they recently made.
Having 24-hour customer service support is another way that can keep credit card transaction disputes at bay. If a customer can live chat with a representative, the employee could offer a full refund or come up with another solution that prevents the person from disputing a charge.
Use these online electronics business categories
Federal statistical agencies classify establishments uses a list of six-digit numerical codes known as the Northern American Classification System (NAICS). The data is used to collect, analyze, and publish statistical information about similar types of businesses. Also, it is used to determine the way they impact the economy in the U.S.
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 Northern American Classification System to view the complete NAICS code list.
The four-digit numerical Standard Industrial Classification (SIC) codes used to identify the main purposes of businesses are assigned by the United States and other countries, such as the United Kingdom.
These are the SIC codes online electronic businesses most frequently use:
- 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 Prerecorded 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
Online electronic stores can get their high risk merchant account from SecureGlobalPay.
We can help your online electronic store get advanced fraud protection and innovative gateway features.
Most online electronic stores have a very high average ticket (average transaction size). The higher the average ticket, the higher the risk for the merchant account provider. Additionally, electronics businesses are often the target of fraudulent transactions and experience high chargeback rates. Chargebacks are a serious issue in the payment processing industry and credit card processing companies often base approvals on the risk of chargebacks.
Let us find your business the perfect, cost-effective merchant account to get your debt consolidation 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!