How to Apply for a Subscription Service High-Risk Merchant Account
Apply for A Merchant Account for Your Subscription-Based Business!
Subscription-based businesses are nothing new, but you need to apply for a subscription service merchant account, which might be easier said than done. For financial institutions, recurring payments can lead to chargebacks for subscriptions; billing a customer monthly or even annually poses a higher risk for chargebacks due to customers’ lack of awareness regarding their continuous payments. This usually results in disputes over charges that eventually result in chargebacks, one of the many challenges high-risk businesses face.
If you’ve not had any luck in applying for a high-risk merchant account for your subscription-based business, here are some tips from the experts at First Card Payments that could help you turn things around.
Find the Right Payment Processor for Subscription Services
For starters, you won’t have a lot of options to work with since most traditional payment processors don’t accept high-risk merchants. Search for a payment processing company in your area that caters to high-risk businesses within your industry. If you’re having a hard time looking for the right payment processor in your area, you can also work with brokerages that can connect you to the right partner or Independent Sales Organizations (ISOs) where you can apply for a subscription service merchant account through their company.
Reach Out to Potential Subscription Payment Processing Partners
Once you have a shortlist of potential payment processors, get in touch with these companies to know how they can help you. Keep in mind that your merchant account will play an important role in your revenue stream and your business, so you should find an account provider that you can work with for a long time.
Don’t be afraid to ask about fees, approval times, processes, and secure payment gateway integrations to ensure that you’re choosing the right partner.
Submit Your Application & Supporting Documentation
Since you’re tagged as a high-risk business for offering a subscription-based service, you need to make sure that your application proves your credibility. Most merchant account providers have downloadable application forms through their websites. These forms usually ask you for information about your business like your tenure, location, size, and sales volume. You will also be asked to provide additional documentation such as articles of incorporation, identification card, Social Security number, recent bank statements, and past payment processing records.
Wait for the Underwriting Process
Once you apply for a subscription service merchant account and submit the supporting documents, your payment processor’s underwriting team will then review your application. This process may take between 2 and 10 business days, and within that time, you could be asked for additional documentation.
Some underwriters could also ask you to make changes to your website and include other information before you could get approved for an account. Once your account is all set up, your merchant payment processor will inform you of the approval. You will also be given instructions on how to process payments and handle any issues moving forward.
Make sure to take notes and follow these best practices to keep your chargeback rates as low as possible and maintain your account. Don’t be afraid to ask your merchant provider any questions about how to apply for a subscription service merchant account and how you should manage it properly.
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