Tech Support Payment Processing

• Card-not-present transactions: This is a transaction that occurs when a credit card isn’t physically present. These are commonplace in the tech support business. This is because many of the transactions occur over the phone or Internet. This increases the risk of fraud.
• Extended warranties: Many tech support businesses sell extended warranties. Extended warranty packages often lead to an increase in fraud.
• Offshore businesses: Offshore businesses may not have the same consumer protections as those within the United States. This means that a business is more likely to engage in fraudulent practices.
• Foreign currency: Many uses of a foreign currency or offshore accounts are perfectly legitimate, but many scammers use foreign currency or offshore accounts to cover their tracks.
• Subscription models: Subscription models tend to result in a high number of chargebacks. This is because people will often sign up for subscriptions and request a refund after they get charged. They may also set a subscription for a credit card that expires.
• Scammers: There are many scammers within the tech support industry. This means that there are people who pretend to be tech support. They then fraudulently charge a person or business for services they never provide. Tech support services are also often a ruse for ransomware services. This has a negative impact on the tech support industry as a whole. This reputational damage often results in a high-risk classification for the tech support industry.

• Higher payment processing fees. Most businesses will face a small per-transaction flat-fee with their credit card processing. They are also likely to incur a percentage fee for each transaction. This fee is normally low, usually around 0.3% per charge. For high-risk accounts, the fee could run as high as 1.5%.
• Higher chargeback fees. One of the main reasons that chargebacks are so expensive for vendors is because the payment processor will levy a fee against the vendor. For high-risk merchants, these fees may be higher than normal.
• Higher reserve requirements. Payment processors will often hold onto a certain amount of payments received. A process will do this to hedge against refunds, chargebacks, or other costs. Being classified as high-risk means that a merchant account processor considers a business to be less reliable. In order to protect against these issues, a vendor will hand it onto a higher reserve.
• Longer application processes. Companies that are high risk and apply for merchant account services can expect to incur a longer application process. They may have to turn over additional documents. This includes including bank statements, credit history, processing history, and more. This process is more labor-intensive and time-consuming.

• Work with your vendor: Merchant account services are usually willing to engage in a conversation about ways to reduce risk. They can often share insights and methods that can be acted upon to reduce risk.
• Purchase protective services: Some vendors will offer a variety of services, such as chargeback or fraud protection. By purchasing these services, you may reduce your risk and avoid a high-risk classification. 
• Increase transparency with customers: When customers are confused about the nature of charges, they are more likely to seek a refund. This may occur when a business is unclear about the nature of the purchases they are making. By being clear with customers about what they are being charged for—and when they are being charged—businesses can reduce chargebacks. They can also enhance their own reputations with customers. This will ultimately improve their bottom lines.

What Should My Tech Support Business Look For in a Merchant Account Provider?

Transparency & Customer Service