Introduction to Tech Support Merchant Accounts
A tech support merchant account is a credit card processing account specifically designed to meet the credit card payment processing needs of companies offering remote technical support services. These companies provide various services, including IT support, software troubleshooting, and hardware repair. Tech support merchant accounts are customized to suit the unique risk profile of IT services merchants. Payment processors use chargeback alerts, fraud prevention measures, and card velocity limitations to safely manage these high-risk accounts.
It is a reality that most sponsor banks and merchant processors don’t like to work with tech support merchants. In fact, tech support payment gateways are among the most difficult ones to get approved. This is mainly due to the industry’s negative reputation, tech support scams, and high chargebacks. However, a small set of high-risk processing companies are still willing to work with US based legitimate tech support merchants.
Tech Support: A High-Risk Industry for Merchant Processors
High Chargebacks: PC support or IT services merchants, in general, attract a high percentage of chargebacks. Every payment processor is responsible for ensuring that the chargebacks of individual merchants stay within limits. If it exceeds the limit, the merchant is placed under monitoring, and if there is still no improvement, the merchant may lose the account. The above-average chargeback ratio prevalent among merchants in this industry is the main reason why almost every processor avoids supporting these merchants.
Bad Reputation: Another reason that makes this industry high-risk is its overall bad reputation. Over the years, numerous scams have led many credit card processing companies to develop the impression that the industry as a whole is fraudulent. However, that is not the case; there are still many legitimate tech support companies operating in the USA that offer excellent services.
These two factors can be considered the main reasons why tech support merchant accounts are considered high-risk. Despite this, there are still credit card processing options available for tech support merchants. Ask us today for details.
Types of Tech Support Merchant Accounts
There are a variety of tech support merchant processing solutions. These can be chosen based on the company structure, payment method requirements, and regulatory environment. By understanding the differences in these solutions, merchants can choose the best tech support merchant account for their unique needs.
Domestic Credit Card Processing for Tech Support
For tech support companies based in the United States of America, a domestic credit card processing account is a perfect solution. A domestic tech support payment gateway is powered by local US processors and sponsor banks. To get approved for a domestic merchant account, businesses must have a good credit score as well as an excellent reputation. It will also help if the merchant produces any previous processing history that displays a low chargeback ratio.
The merchant must have a registered company in the US with a physical presence, and the business owners must be US national residents with a Social Security number. A US bank account is also mandatory for a domestic solution. It is important to know that the business address should not be a P.O. Box or virtual office. The payment processor may require an onsite inspection, which means a representative will visit the company for physical verification. With a domestic account, merchants pay smaller transaction fees and are paid faster.
Offshore Credit Card Processing for Tech Support
When a domestic US bank declines the application of a tech support merchant, the merchant can approach an offshore provider. Offshore credit card processing solutions have become a viable option for tech support merchants. Most of these providers are flexible in their approval criteria; however, they may cost more and have complex settlement options.
Offshore tech support merchant accounts work pretty much like a domestic solution in terms of processing transactions. The main difference lies in the registration location of the merchant and the acquiring company. In an offshore arrangement, these entities are not registered in the same country, which provides advantages and disadvantages.
A primary benefit of working with an offshore processor is the potential for easier approval, especially for merchants in high-risk industries like tech support. Many offshore processors are more comfortable working with companies that offer remote services or have a global customer base.
However, it is important to know that offshore merchant accounts generally come at a higher processing fee, which is a few times what a merchant would pay to a domestic processor. The settlement period can also be longer and is generally 7 to 14 days, depending on the risk profile of the merchant and the policy of the processor. Sometimes the processor may also require the merchant to register a company in the country where the processor is located.
It is important for merchants to look at the advantages and disadvantages of the offshore solution before making a decision. Along with that, it is also advisable to calculate tax implications of such a solution.
eCheck Payment Gateway for Tech Support
As we all know, getting credit card processing solutions for tech support has become extremely difficult in the US, and also offshore alternative payment methods are becoming popular. One such payment method is eCheck or electronic check.
Tech support businesses can benefit from eChecks as they provide a simple way to accept payments from customers. Electronic check processing has gained popularity in the tech support industry due to its high security, transparency, and convenience. eChecks draw funds directly from the customer’s bank account, similar to a traditional paper check, but in the case of eChecks, it is processed electronically. This payment method is a preferred option among customers who prefer not to use credit cards for making online purchases. Electronic checks are suitable for accepting high-volume transactions.
It usually takes 24 to 48 hours to set up an eCheck payment gateway for tech support. The quick setup allows businesses to expand their payment processing capabilities without any challenges. With eChecks, accepting transactions is a lot cheaper in comparison to credit cards.
Advanced eCheck processing systems come with essential security features that verify transaction details before submitting them. eCheck payment gateways for tech support verify the account number, routing number, and funds available before processing the transactions. These security checks help reduce the risk of returns and chargebacks.
Fees for Tech Support Merchant Accounts
The cost of a payment processing solution is one of the most important factors to consider while choosing among available options. While the exact costs can vary widely based on various factors such as the volume of transactions, the merchant’s risk profile, and the specific services being chosen, here is a tentative fee structure for tech support merchant accounts:
- Setup fee: $0-$900
- Monthly fee: $25-$100
- Transaction fee: 2.5%-4% + $0.20-$0.30 per transaction
- Chargeback fee: $25-$100 per incident
- PCI compliance fee: $10-$30 per month
- Gateway fee: $10-$25 per month
- Reserve: 5-10% of monthly processing volume (held for 6-12 months)
- Early termination fee: $250-$500
- Monthly minimum fee: $25-$50
- Statement fee: $5-$15 per month
To get the most accurate pricing structure, the merchant should contact a service provider or a professional like Quadrapay. By sharing basic details about the company, the merchant can get a detailed quote.
Timeframe for Approval of Tech Support Payment Gateway
The total time required to get approval for a tech support payment gateway can vary depending on the type of account the merchant needs and the policies of the payment processor. Understanding these timeframes can help businesses plan their application strategy effectively.
For a US domestic tech support merchant account, the industry average approval timeline generally falls between 3 to 7 business days. This time frame is used by the underwriters to thoroughly review the application, verify the submitted documents, and perform the necessary background checks. Some factors that can influence the timeline include the completeness of the application, the responsiveness of the merchant regarding additional information requests, and the current workload of the underwriting department.
Offshore merchant accounts may require a little bit longer in comparison to a domestic provider. They generally take up to 10 business days. The timeline is longer because of additional complexity involved in setting up international banking relationships, and offshore processors may require additional time to perform due diligence for dealing with cross-border transactions.
Each payment gateway for tech support generally comes with the fastest approval; it usually takes only 3 to 4 days. Merchants from low-risk industries can get approval within one or two days as well.
To ensure that the timeline is not extended and the onboarding process is smooth and fast, tech support businesses should thoroughly prepare all the required KYC documents before submitting the application.
It is also important to work with a payment processor that has experience working in the tech support industry, as they will be able to handle the applications quickly.
Merchants should always be ready to provide additional information or clarification as needed by the processor. Not doing so unnecessarily delays the process.
It always helps to work with a payment processing consultant like QuadraPay that can guide the application process and help you proactively avoid any potential issues.
By understanding these timeframes and preparing accordingly, tech support businesses can reduce the time required to set up their payment processing account to a great extent.
KYC Requirements for Tech Support Merchant Services
Know Your Customer (KYC) requirements are an important component of the merchant account application process. This is mandatory for any kind of merchant as it helps in preventing fraud and ensures compliance with financial regulations. For tech support businesses, merchants must understand these requirements for smooth application approval.
Sponsor banks and payment processors require the full KYC set to approve the merchant account. These documents verify the identity of the business owners as well as confirm the genuineness of the business. They also verify whether the company is licensed to operate legally. Let us look at some of the key documents required in this process.
Business Registration Documents: Proof of company registration is vital. Without a registered company, the merchant cannot apply for a merchant account. This proof can be the copy of the company’s articles of incorporation, certificate of formation, or similar document. The types of businesses that can apply for a merchant account include LLC, Corporation, Partnership, Sole Proprietorship, and DBA.
Bank Account Verification: The payment processor will hold the transaction funds for some time but is required to transfer those funds to the merchant’s business bank account. For this, the merchant must produce a confirmation letter that displays the bank account information. If a letter is not available, the merchant can also produce a voided check. Funds can only be transferred to the business bank account.
Address Verification: To confirm the physical address and the address of the directors, a utility bill or a lease agreement is generally required. This document should be recent, usually within the last three months, and must clearly show the name and address of the business or individual.
Personal Identification: The directors and the company owners must provide government-issued photo identification such as a driver’s license or passport. This verifies the identity of the people behind the company.
Online Presence Verification: Tech support companies that wish to accept online payments must produce proof of domain registration. This can be in the form of a receipt received when purchasing the domain or a document from the domain registrar that shows the ownership.
Processing History: For companies that are already accepting credit card payments or ACH payments, they can submit previous processing statements. This document can help merchants get better rates and favorable payout terms.
Website Requirements for Tech Support Credit Card Processing
For merchants in the remote tech support industry, it is important to have a fully compliant website. There are certain requirements which the merchant must implement on the website to have a better chance of account approval. These simple additions to the website also offer transparency to customers.
Mandatory Disclaimers: Regarding No Brand Association and Availability of Warranty from Manufacturer. The support services offered by the merchant may be for a device that may already be covered by the original equipment manufacturer’s warranty. It is important for the merchant to clearly declare this information on the website, which educates the customer to know that warranty or support may be available from the manufacturer.
No Brand Infringement: While a third-party tech support company may be providing assistance for a variety of products from different brands, it is important to have a clear disclaimer on the website which indicates that the merchant does not have any association with the brands listed on the website. It is also important to clearly define that the brands are owned by their respective owners.
Comprehensive Service Listings: The website must have clear descriptions of all the services available. It should include the pricing information, the scope of service, and any limitations or conditions associated with it. By giving this information, merchants reduce the risk of misunderstandings and potential disputes with customers.
Functional Shopping Cart: For the approval of an e-commerce merchant account for a tech support company, it is important for the merchant to have a fully functional shopping cart on the website. With the shopping cart, the customer can select the service, review their choices, and then proceed to checkout. The shopping cart also clearly displays the selected quantity and the cost breakdown.
Payment Brand Logos: For the approval of a merchant account, the website must have the logos of the card brands. These logos clearly indicate that the merchant is readily accepting credit and debit cards of the specific brands. Credit card brand logos should be listed in the footer section of the website.
Contact Information: For PC tech support companies, it is important to implement ways to reduce returns and chargebacks. By clearly displaying the contact information, which includes the company name, address, and 24/7 support number, merchants can effectively reduce disputes.
Policy Pages: Certain policy pages including refund policy, privacy policy, terms and conditions, cookie policy, and GDPR policy should be clearly written and must be easily accessible. These policy pages help set the right expectations in the minds of the customers.
SSL Certificate: For the approval of any type of merchant account, it is important to have all traffic securely transferred between all parties. For this, the merchant must have an active SSL certificate attached to the URL. With SSL, also known as Secure Sockets Layer certificate, the credit card data is encrypted and securely sent to the receiver.
Clear Pricing: All products and services should have clear pricing and it should be displayed in the appropriate currency. It is important to clearly display any other costs, which include taxes and surcharges, before the customer reaches the checkout process.
Integration process of IT services merchant accounts
After the account approval, the merchant initiates the integration process. A pro tip is that the merchant must ask the provider in the beginning about integration options. This is because some website platforms are limited to integration with very few processors. So it’s always best to confirm if the merchant account is compatible with the merchant’s website.
There are various methods that can be used to integrate the gateway to the merchant’s website. Each has its own advantages and disadvantages; let us explore these options in detail.
Ready-Made Plugins: For merchants that use popular content management systems including WordPress, Magento, WooCommerce, OpenCart, PrestaShop, Shopify, and BigCommerce, most processors offer ready-to-use integration options and plugins. These plugins are extremely easy to add to the website and handle the entire payment process. That includes displaying the transaction amount and transferring card details to the processor for processing. Additional customization options may also be available to match the look and feel of the brand.
HTML “Buy Now” Buttons: This is the simplest integration option, and it can be done without the need for any shopping cart. By adding a simple HTML snippet, integration can be done. The problem with such an integration option is that for every product, the merchant has to do individual integration. The customers are redirected to a hosted payment page where they can submit card details. After the transaction completion, the customer is redirected to the merchant’s website.
API Integration: This is the most popular integration method used by tech support merchants in the USA. It offers feature-rich integrations. The entire details of the API are provided by the processor in API documentation. The merchant must have a developer who can understand the code and make custom codes for integration.
FAQ for Tech Support Payment Gateway
How can tech support companies reduce chargebacks?
We understand that technical support merchants face the risk of high chargebacks. There are many steps that tech support merchants can take to reduce chargebacks.
Merchants must prominently display a clear refund policy on their website. With a clear refund policy, merchants can easily manage customer expectations and reduce disputes.
When customers sign up for a service, the merchant should ensure that they also sign a detailed service agreement. This agreement should outline the service scope, terms of use, refund policies, turnaround time, and other service level benchmarks.
Maintaining open lines of communication with customers through email, phone, and chat support can help in resolving issues immediately, thereby reducing the potential for chargebacks.
Merchants should retain transaction details, service logs, customer communication, and proof of service delivery for potential use in disputes and chargeback cases.
Chargeback alerts and notification services can alert the merchant whenever a customer dispute arises, allowing them to either resolve the dispute or get ready to fight the chargeback case. While this may lead to an increase in refunds, it can significantly reduce the overall number of chargebacks.
What is the MCC code for a tech support merchant account?
The Merchant Classification Code, or MCC, is a unique code that card schemes designate to classify merchants operating in different industries correctly. The MCC helps ensure accurate reporting and appropriate risk assessment by payment processors and acquiring banks.
It’s important to note that there may be instances where the merchant has multiple related businesses, including computer repair and computer sales. There is a different designated merchant classification code for computer sales, which is MCC 5045. This classification code includes merchants in business-to-business or wholesale distribution of computer hardware, software, and equipment.
MCC 7379 is the perfect fit for companies that provide various computer-related services, including computer consultants, technical support, PC support, and Wi-Fi network installation.
Additionally, MCC 5734 is for sales of computer software programs for business and personal use, while MCC 5817 is used to classify companies that sell applications for mobile devices. MCC 7372 is for services related to website technical resolutions, including system design, website design, data processing, and data entry services. MCC 7375 is used for information retrieval services and data recovery, and MCC 7629 is for merchants that offer repair services for household and commercial electrical equipment.
While MCC 7379 is specifically for technical support merchants, other MCCs may also apply depending on how the business is operated and what strategic business units the company operates.
Are Chinese gateways for tech support exempt from chargebacks?
No, Chinese gateways for tech support are not exempt from chargebacks. Regardless of where the payment service provider is located, they are bound to follow industry standards and regulations, and they must honor chargeback requests coming from customers.
It is the merchant’s responsibility to take measures to reduce the possibility of chargebacks. Merchants using Chinese payment gateways for tech support may still encounter chargebacks, similar to any other gateway. It is important for merchants to comply with the requests made by the payment gateway and provide the necessary documents to resolve chargeback disputes.
