What Startup Tech Support Businesses Should Know About Credit Card Processing?

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startup credit-card-processing

Since last few years, the importance of credit cards and payment gateways are widely gaining popularity across the globe. Startup and businesses can’t afford to avoid it. They must facilitate their customers for online payment options. Here, the credit card processing comes into the picture which is the most important thing to consider. The following is an interview with Jacob Motley, the Vice President of Sales with Soar Payments. Which is a high risk credit card processor that supports US and India. He has talked about tech support companies on credit card processing presenting facts and logical views. 

Interviewer: What is the difference between a merchant account and a payment gateway?

Mr. Motley: Remote tech support businesses typically accept payments over the phone or via their website’s checkout page. The software that is used to securely transmit the customer’s credit card information to the payment processor is called a payment gateway. But the actual processing of the transaction is done via a merchant account. So, to be able to accept customer’s credit and debit card payments either over the phone or via a shopping cart you need BOTH.  A payment gateway and a merchant account.

Interviewer: Why are remote tech support businesses considered high risk?

startup credit card processing

Mr. Motley: “High risk” is a term applied to a number of industries by the acquiring banks in the credit card processing world. There are a number of reasons why an industry might be categorized as high risk, but for remote tech support, the reason is that tech support businesses typically have a significant number of customer chargebacks.

Jacob Motley - what startup tech support should know about credit card processing?

Jacob Motley, VP, SoarPay. Photo Credit: soarpay.com

Interviewer: Why is managing chargebacks so important for remote tech support businesses?

Mr. Motley: Chargebacks, for those unfamiliar with the term, are situations in which a customer of a business calls their issuing bank and disputes a charge. They might say, for example, that they didn’t authorize the charge, that the service quality wasn’t up to the level promised, that they were billed the wrong amount, or any host of other reasons.

When chargeback is initiated the tech support business’ credit card processor is notified. And if the rate of chargebacks exceeds approved threshold, the credit card processor will either freeze or terminate the merchant account.

Consequently, not only are chargebacks incredibly expensive for the tech support company, they can also lead to the company’s merchant account being terminated.

startup credit card processing

 

Interviewer: What makes Soar Payments uniquely qualified to support remote PC tech support businesses?

Mr. Motley: Soar Payments works with a number of remote tech support businesses, and thus not only are we able to provide merchant accounts for these businesses, but we also provide Chargeback Armor to our tech support merchants, which helps them avoid and fight illegitimate chargebacks effectively, thus preserving the tech support merchant account.

Interviewer: What is the difference between a domestic and an offshore merchant account?

Mr. Motley: A domestic merchant account refers to a merchant account registered to a company that is:

  • Registered in the US
  • Owned by a US citizen or legal resident
  • With a US bank account.

startup credit card processing

Domestic merchant accounts offer lower fees and better payment terms than an offshore one. By contrast an offshore merchant account is available to businesses registered outside the US (such as in India). And those owned by Indian or other non-US residents and which use a business bank account outside of the US.

Interviewer: What advice would you give to a startup tech support business?

Mr. Motley: A startup business in the tech support industry must remember one thing. A few bad actors have given his industry a poor reputation with credit card processors. As a result of this preconceived reputation, the startup owner must be incredibly diligent in avoiding and fighting illegitimate chargebacks. So as to prove the legitimacy of the business to the credit card processor over the long term. I would encourage every startup business to take measures such as using eSigned contracts with their customers. Provide excellent customer service and offer a liberal refund policy for dissatisfied customers would be good as well. This is to minimize chances of the merchant account will be terminated for excessive chargebacks.

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Rich McIver

Founder at SoarPay
Soar Payments is an industry leading high-risk merchant services provider offering a simple online application, integrated chargeback prevention and multiple sponsor banks, Soar Payments provides an easy reliable solution for high-risk businesses seeking ACH and credit card processing.
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