For some businesses, the ability to accept credit cards is merely an added convenience for their customers, whereas for others it’s essential. Credit card processing for subscription services allows these types of businesses to protect their revenue stream while capturing more subscriptions annually.
Companies that sell subscription services rely on loyal subscribers for their core business. The collection of monthly payments through credit card processing for magazine renewals adds simplicity for publications. Recurring billing and subscription renewals can be generated automatically, eliminating this hassle for the customer.
If your website or publication is in need of a merchant account for subscription services, The Transaction Group (TTG) can help. At TTG, we set up merchant accounts for all types of businesses. We’re proud of our reputation for excellent customer service and will take the time to address all questions.
Some merchants fall into a category processing banks consider high risk because their business model carries higher than normal risk. Credit card processing for subscription services will require a high risk merchant account. Below are some of the reasons banks classify businesses as high risk.
What a chargeback means for a business:
A common factor immediately identifying a business as high risk is the potential for chargebacks. Visa and MasterCard impose strict penalties to processing companies when they exceed a certain chargeback ratio. In the case of a chargeback, the processing company bears the risk of the accompanying debt, and therefore charges higher rates to cover this risk.
Other factors that often label a business as risky include:
• the business owner’s personal credit score
• high priced transactions
• business location
• upfront payment collection for products or services
The importance of your processing history:
Established high risk businesses that hold a clean processing history may have the ability to negotiate better rates and fees with the merchant account provider.
Newly established businesses that fall into the high risk category will pay higher rates at first. Over time, developing a clean processing record will afford the opportunity for better rates.
Most credit card processors demand 3 months of prior processing records before they will quote a rate for your business. 3 months is usually suitable for reviewing the chargeback history.
If you are just starting your business and do not have a processing history, or are an established business with a poor transaction history, you can still be approved, but with higher rates than otherwise.
Provisions of subscription service businesses:
Mainly because of the elevated risk of fraudulent activities, credit card processing for magazine renewal and subscription businesses requires special provisions, specifically, greater fund transfer delays, security reserves, restraints on volume level coupled with high pricing, and certainly increased discount rates and charges.
How to get started:
TTG has been providing advice and high risk merchant account solutions since 2004. We understand the concerns business owners have when it comes to signing up for a merchant account and we take the time to let you know exactly what to expect.
If you are ready to set up customized credit card processing for subscription services and magazine renewals, or would like more information, apply now or call us at 888-383-8056.