Last updated on March 22nd, 2025 at 01:09 pm
Magazine Subscription Merchant Accounts: Insider’s Guide
A magazine subscription merchant account is a specialized credit card processing account that allows publishers to accept one time and recurring payments for magazine sales. Magazine companies can accept payments via various methods such as credit cards, debit cards, and other payment instruments. Magazine subscription merchant accounts are considered high risk by many sponsor banks and payment processors because of the risk of chargebacks and cancellations.
Low-risk processors generally avoid working with magazine businesses. The best options are from high-risk merchant processors. QuadraPay has been assisting magazine subscription companies with high-risk payment gateways since 2016. Our team understands that merchants may find it hard to get approval of such accounts. We have created this industry guide about magazine subscriptions and merchant accounts to make the application and onboarding process easy for you. Let’s begin.
Why Magazine Subscription Merchant Accounts Are High-Risk?
Many people may believe that selling magazine subscriptions over the internet and collecting payments through credit and debit cards should not be tough; however, the reality is very different. Sponsor banks and payment processors consider the subscription model as high risk. Apart from the subscription model, there are various other factors that make magazine sales a high-risk affair for banks. Let us discuss a few of these factors.
Recurring Billing Issues
When a customer buys a magazine subscription, then the payments are charged on the customer’s credit card on regular, set intervals; this can be monthly, quarterly, or annually. Many customers forget that they ever signed up for such a subscription, and this may result in chargebacks and disputes. Some dishonest customers may claim chargebacks even if the magazines are delivered on time. A high chargeback ratio can result in the termination of the account.
Long-Term Commitments
Many magazine companies collect payments for subscriptions at the beginning of the contract. Generally, these commitments are for long-term, such as yearly or multi-year subscriptions. For the magazine company, it’s good, but for processors, this can be extremely risky. When a customer gives a long-term commitment to purchase magazines, then it becomes important for the publisher to ensure the quality and on-time delivery. If any of these fail, then the customers may raise a dispute by contacting their card issuers.
Fraud Risks
All subscription-based services are generally targeted by fraudsters. These fraudsters use stolen credit cards to make fake purchases. Most magazines are delivered digitally via email, and because of that, it becomes extremely difficult to verify the identity of the buyer. Along with that, it is quite common to notice in the magazine subscription industry that fraudsters sign up for free trials using fake information. Such fraudulent transactions lead to revenue loss and an increased fraud ratio.
Industry Reputation
The reputation of the magazine subscription sales model is not very good. Many people believe that magazine subscription companies use aggressive sales tactics. Some people even believe that magazine subscription companies force users to renew their subscription without any notification. Because of this reputation of the industry, most payment processors avoid working with magazine publishers.
Types of Merchant Accounts for Magazine Subscriptions
The type of payment solution that will work best for a magazine subscription company depends a lot on how that company operates. In the magazine subscription industry, generally there are three types of payment solutions that are used.
An e-commerce payment option is used by magazine companies that sell subscriptions over the internet through their website. For brick-and-mortar stores and magazine stands, the best options are retail credit card terminals. For large magazine companies that receive orders over the phone, they may use IVR or virtual terminal solutions. Let’s explore these payment solutions in detail.
Online Magazine Sales Payment Solution
If you sell magazines online via an e-commerce website or a mobile application, then you can use an online credit card processing solution. With an online e-commerce payment solution, you will get ready-to-use plugins for various content management systems, including WordPress, Magento, and WooCommerce. For your mobile app payments you will get a mobile API and SDK.
Mobile & Retail Credit Card Terminals for Magazine Stores & Newsstands
These solutions are essential if you want to accept face-to-face transactions at your magazine store. With brand-new terminals, you will be able to accept almost every type of credit and debit card as well as GPay, Apple Pay, and various other wallets. Newsagents can use compact credit card readers for on-the-go payment collection.
Virtual Terminal Payments for Magazine Sales
If your company wants to accept payments over the telephone or via mail order forms, then you should use a MOTO/virtual terminal solution.
Features of Magazine Subscription Merchant Accounts
When choosing a payment processor for your magazine sales business, make sure they offer you the following features with the merchant account.
Chargeback Defense Tools
It is quite common for magazine sales businesses to experience chargebacks; however, the right tools can help merchants easily represent the documents to win chargeback cases. Advanced chargeback alert tools can be used to get alerts when disputes are raised with card issuers.
Global Coverage
You should be able to accept payments from international customers. The payment gateway should use a dynamic currency conversion feature to display the magazine price in the customer’s home currency. This will help you take your company global and make your magazine an international brand.
Easy Cancellation & Refund Management
For any subscription business, it is important to efficiently manage cancellation and refund requests. The payment solution that you choose must have features that allow your customer to easily cancel their subscription. You should get the ability to initiate partial or prorated refunds. The payment gateway should provide you a tool that allows you to track refunds, as it is important to prevent duplicate requests.
Customer Support & Reporting Tools
The payment processor should provide 24/7 support. This is extremely important because in the magazine sales industry, payment-related disputes can arise at any time. The merchant panel should allow you to extract reports for sales, refunds, and chargebacks. For the confirmation of orders, the gateway should send automated notifications to customers.
Integration of Magazine Subscription Merchant Account
Proper integration of the payment gateway on your business website is extremely important. With smooth integration, you will be able to offer error-free transaction processing. Hassle-free integration results in reduced chargebacks and better customer satisfaction. There are various ways to integrate a magazine subscription payment gateway on your website or mobile app.
Hosted Payment Gateway
One of the simplest ways of integration is by doing it via a hosted payment page. The merchant adds a simple HTML code to the magazine subscription website to create buy now buttons. When the customer clicks on the Buy Now button, a secure payment page opens where the customer can fill in the credit card information. This payment page is not hosted on the merchant’s website but is hosted on the PCI-compliant website of the payment gateway company. This is the simplest and safest integration option; however, it has some limitations.
API Integration (Direct Integration)
Another way of integration is doing it via API. The payment processor provides a document with a set of rules related to integration. By reading the integration document, your web development team can create custom code to use the full functionality of the payment gateway. With this kind of integration, the customer submits the credit card information on the merchant’s website.
Payment Plugins for CMS & eCommerce Platforms
The most common integration approach is using ready-made CMS plugins. Most magazine websites use content management systems such as WooCommerce, Magento, PrestaShop, and OpenCart. Many payment service providers offer easy integration plugins for these content management systems. This type of integration eliminates the cost of hiring a developer for integration.
KYC Requirements for a Magazine Subscription Merchant Account
To open a magazine sales merchant account, you will need to send some documents to the processors. The underwriting team will evaluate these documents. Based on the review of the KYC documents, the payment processor will either approve or reject your application. Let’s look at some of the most important KYC documents:
You will have to share the personal identification proof of company directors. This can be a national ID that includes the name, picture, and date of birth of the director. In most cases, banks accept driver’s licenses or passports.
The processing company will be interested in identifying your company, and for this, you need to share your company registration documents as well as tax information and any other licenses that may be required. The best document for the same can be a certificate of incorporation.
It is important for the underwriting team to know where the director resides and where the company is physically located. For this, they require utility bills. You can share that latest utility bill for gas, electricity, or municipal taxes.
For merchants selling magazines over e-commerce websites, they will need to submit a copy of domain ownership. This can be a domain purchase receipt.
The money collected for magazine sales must be deposited to your business bank account, and for this, the acquiring bank will require a bank letter or a voided check that confirms account information.
Depending on the jurisdiction of business registration, merchants may be required to submit tax registration information. This may include an EIN–IRS for the US, a business number for Canada, a unique taxpayer reference (UTR) for the UK, or a TIN for the EU.
Application Process for a Magazine Subscription Merchant Account
The application process for a magazine merchant account is easy. All you have to do is contact the payment service provider and send basic information. At first they will just need your name, email address, the website that you wish to get approved for, and a phone number. Later they will ask you to share the filled merchant account application form and copies of the KYC documents. The underwriting team will request clarification or other documents if needed. In most cases a magazine subscription merchant account is approved within a week’s time.
