Yes, in some cases, parental control applications may get a merchant account. However, it is important to understand that such applications face additional underwriting review compared to traditional software businesses. Most payment service providers reject these applications because the business model require extensive device permissions, monitoring capabilities, location tracking, screen activity monitoring, or remote management features.
Even when the software is designed for legitimate parental supervision and device safety, still, many payment service providers may view this business as high-risk because of the concerns about how the technology could potentially be used. The biggest challenge associated with this kind of business model is the privacy concerns. One of the most common reasons that parental control applications and softwares experience payment processing challenges is that most processors categorize such business models similarly to monitoring, tracking, or surveillance-related software and the result is simple such businesses can sometimes face account reviews, payout delays, or even account closure if the processor determines that the product falls outside the acceptable user policy. It will not be wrong to say that this kind of business model is one of the most difficult ones to get approved. Startups from this industry normally face account rejection, and those businesses that are already processing payments even for an extended period of time also face issues such as account review, payment hold, or even shutdown.
I would say that to improve the chances of account approval, the software providers should clearly explain the purpose of the application. They should tell who are the intended users and how the consent is obtained before the monitoring feature is even activated. Transparent disclosure, privacy policy, terms and conditions, data protection practices, all of these can play a significant role in the underwriting process. Payment service providers, they are looking forward to understand that what the software is being used for, whether it is legitimate parental control or not. Is the software being used for family safety or if the device management purpose is genuine or not. Basically, they want to ensure that no unauthorized monitoring happens through their application.
Businesses that offer subscription billing should also maintain clear cancellation policies on their mobile application and website. They should clearly disclose their billing descriptor, and they should have a strong customer support channel. Since many parental control applications, they operate on a recurring revenue model, payment processors generally pay a very close attention to chargeback risk, refund policies, and customer complaint history. Merchants should have transparent billing practices also. All of this can help reduce the possibility of disputes and also help strengthen the merchant’s risk profile.
The good news is that many parental control, employee monitoring, and device management, as well as family safety software providers, process credit and debit card payments successfully every day. The key here is to work with an acquiring partner that fully understands specialized software business and can properly evaluate the product’s intended use, compliance procedure, and long-term operational stability. When you work with the right payment partner and you are transparent about your business model, then parental control applications can most of the time find a reliable payment processing solution, despite of additional underwriting consideration.
For such business models, the most promising solution providers are those that work with merchants from various high-risk industries, such as softwares, VPNs, CRM, SaaS, and money service businesses. These high-risk merchant account providers have teams that are educated on the risk profiles of merchants from various industries, and they can offer much better results than mainstream payment processors.