The internet offers the ability for businesses to reach a wide audience and sell their downloadable content in the world marketplace. With over $15 billion spent online annually in the purchase of digital downloadable products it has become a huge segment of ecommerce. At The Transaction Group (TTG) we help our online merchants get set up with credit card processing for Ebooks and other digital downloads so that payment processing is as fast and easy as it should be.
TTG works with a variety of ecommerce businesses selling products such as computer software, software games, music and movie files, as well as Ebooks, and provides the best solutions for credit card processing for digital downloads. We have banking relationships in place to ensure our merchants receive the best rates available.
Based on risk factors, banks categorize a lot of internet merchants as high risk. Businesses offering downloadable content fall into this category, therefore credit card processing for software and digital download type products requires a high risk merchant account.
The Risk and Your Business Model
The risks associated with credit card processing for digital downloads are determined by a number of factors, the largest usually being the business model. Specifically what makes up your business model?
• your products or services
• your marketing and promotional tactics
• your product or service delivery method
• your customer support services available
• your product and service pricing
Depending upon the elements in your business model, processing banks will determine what category your business falls into: low risk or high risk. Banks will then evaluate other risks that may be associated with the business itself:
• Potential for chargebacks by customers
• Business owner’s personal credit score
• Deferred payment for goods and services (vs. collection of payment upfront)
• High priced goods and services
How Processing History Comes into Play
When it comes to credit card processing for Ebooks and other downloadable content, a decent track record is extremely important. Banks want to make sure that your business is operating in a sound manner and handling customer refunds or returns appropriately and that, more or less, your customers are satisfied.
For verification banks will ask for at least 3 months of processing history. These statements will provide detaisl regarding customer refunds and chargebacks. Over time, your good processing history will give you leverage to negotiate better rates, regardless of the high risk classification.
When a business has a poor processing history or no processing history, negotiating a better rate will be difficult. Although processing banks will still approve businesses in these situations, they can expect to pay higher rates. For these businesses it is important to work to establish a good record over time in order to save money in the future.
In addition to higher rates, many high risk processors have stipulations for high risk merchant accounts. Some such stipulations include extended funding waiting times, reserves, and limitations on sales volume.
TTG is well aware of the challenges companies deal with when securing a high risk merchant account. With our personalized banking relationships, we are we are able to find the most effective processing bank for your business. We’ll take the time to answer all your questions and let you know what you can expect with your high risk merchant account.
To start credit card processing for downloadable content,ebooks or other digital content, or for more information about a high risk merchant account, call us at 888-383-8056.