‘Digital Goods’ is turning into a very popular term these days, especially in e-commerce field. It refers to any goods that are generally in form of software and can be downloaded from internet or transferred via emails. They range from digital media, e-books, online subscriptions, newsletters, e-coupons, webinars, videos and applications to different kinds of software. With the expansion of internet and extensive utilization of the online market, the production and delivery of digital goods have also increased a lot. Companies that deal in digital goods need the online business platform the most to sell their products. Thus, the requirement of an online merchant account is crucial for them. Here, twist in the tale is categorization of digital goods industry as a high risk industry, which makes it really difficult for merchants to get a high risk merchant account for digital goods company.
Why is digital goods a high risk industry?
The higher rate of chargeback in digital goods industry makes it difficult for acquiring banks to issue a high risk merchant account. Apart from this, the malign and fraud practices done by companies in this field have deteriorated the image of complete industry and as a result most of the processors refrain from providing high risk merchant account to digital goods industry. As the market has expanded, many small merchants and startup companies have also entered the domain. Because of the market competitiveness and to earn extra profit in short time, some of these merchants compromise with the quality of the digital goods delivered and that in turn increases the number of unsatisfied customers. The final outcome is high numbers of chargeback.
How to get a high risk merchant account for digital goods company?
Whether it is a domestic bank or an offshore account provider, a merchant must apply with all genuine documentation, a decent credit history, stable financial stronghold, a well-planned business model, estimated turnovers and specifications of goods and services they will provide to the clients. Once all these formalities are completed, it is the duty of an underwriter to closely investigate the risk factors and profit speculations of your project or company, and on basis of that you can avail a merchant account. Mostly the underwriting guidelines of domestic acquirers are very strict for high risk industries. In such a case, a merchant can search for the best offshore merchant account provider. The merchant should check and negotiate well before getting the online merchant account and additional services.
How to maintain the high risk merchant account for longer time?
The answer to this question is simple but practicing the same is a real challenge. One must avoid chargebacks to keep the merchant account for longer time. The prescribed limit for chargeback ratio is less than 2%. Thus, a merchant should maintain healthy relationship with their customers and provide best quality products and services to ensure that the chargeback are minimum. Again, this should also be kept in mind that the average ticket and declared volume of monthly transactions should never cross the maximum limit, because in such cases the accounts are ceased or terminated.
If you are facing trouble in getting a high risk merchant account for your digital goods business and a payment gateway for online payments, quadrapay.com can help you with its strong connections with best-in-class service providers worldwide. You can reach us anytime for the support.