Understanding the High-Risk Nature
Software selling is often deemed high risk by acquiring banks for several reasons, including the prevalence of card-not-present transactions, historically higher chargeback rates, restrictions based on merchant location, and limitations on processing payments worldwide.
Expert Guidance for Merchant Services
If you’ve faced declined merchant account applications or termination from existing providers, rest assured that navigating high-risk card processing, especially in software sales, is a common challenge. While one rejection doesn’t seal your fate, exploring alternative avenues beyond mainstream payment providers may be necessary.
Application Process for Payment Processors
Before submitting multiple applications, it’s crucial to assess if your software business aligns with the criteria set by payment processors. Understand the complex considerations based on business type, trading location, and currencies. Enlist the help of a non-biased broker if needed to streamline the application process.
Credit Card Processing and Terms
Upon application submission, the chosen bank’s underwriting team evaluates your business to determine whether they’ll handle card processing. Successful applications result in presented terms, including potentially higher rates and fees. Managing the risk involves considerations like rolling reserves, and periodic switching of banks is recommended for favourable processing costs.
Instant Approval Challenges
Due to the high-risk nature of software selling payment processing, instant approval merchant accounts are not readily available. Banks require adequate time for thorough underwriting, which can take up to ten working days. To mitigate risks of termination, consider having more than one merchant account as your business expands.
Selecting the Right Payment Gateway
Given that most card payments for software sales occur online, choosing the right payment gateway is crucial. Consider aspects such as security, chargeback and fraud management, integration capabilities, support for recurring payments, and coverage for international transactions
Security: Prioritise payment gateways with high PCI DSS compliance ratings for enhanced online transaction security.
Chargeback and Fraud Management: Choose gateways that assist with managing chargebacks, particularly crucial in high-risk industries.
Integration: Ensure seamless integration with your merchant account and website provider, and consider additional integrations for efficiency.
Recurring Payments: If your software business operates on a subscription model, opt for gateways that support recurring payments.
How Merchant Account Solutions (MAS) Can Help
Merchant Account Solutions (MAS) specialises in navigating the complexities of high-risk industries, providing tailored solutions for software selling businesses. Our experts guide you through the application process, ensuring compliance and optimal payment processing. Learn more on how MAS can help on our Merchant Services page.
When selling software, it’s important to choose the right payment processing company. This choice affects your transaction fees and how you handle credit card payments, including American Express and Apple Pay. Whether it’s for one-time purchases or recurring charges, the right processor makes real-time payments smooth and secure.
Look for a company offering competitive monthly fees and transparent pricing. Avoid high setup fees and focus on firms that support mobile payments and various products and services. It’s also wise to consider your business banking needs and how they align with the payment processor.
By following these steps, you can navigate the complex world of payment processing with confidence. For more tips and advice, don’t forget to check.
