The electronic industry has totally revolutionized the world around us. It has shortened distances and minimized barriers in our paths. It has pushed the world into a new dimension where things and trends are rapidly changing. Habits that were considered healthy or even compulsory in prior years have completely lost their meaning today. In the last century, it was considered necessary for almost every house to get the newspaper delivered to their doorstep every morning. The newspapers were not of many kinds, so almost every house was delivered with the same piece of paper. Things changed from that quite fast and since then, a variety of newspaper types have spawned into existence. The news is not limited to just daily happenings but technology, culture, history, and science have grown into such diverse fields that they are covered in separate magazines.
That was, however, not enough and the world moved on to e-magazines, which mean that the news agency does not even have to deliver the paper or magazine to a house in physical form but could be accessed online for a small fee. This concept gave birth to online magazine subscriptions and pushed customers to rely on online transactions for traditionally delivered as well as online magazines.
ECOMMERCE CARD NOT PRESENT MOTO
This online trend owes its thanks to electronic commerce and the rapid changes it has brought to the marketing world. In the past, things used to be traded in person and payments were considered a highly physical matter. eCommerce has completely changed the scenario and now, trading is done among people millions of miles away with electronic data interchange and electronic funds transfer. Bank accounts are just numbers and goods are airmailed or sent on cargo now. eCommerce has brought reforms in the trade market and made transactions and dealings easier and faster. This convenience has become the cause for the spike in the trading index as people do not see borders while making purchases.
MERCHANT ACCOUNT COMPANY SERVICES PROVIDER
To be able to project your business into the world of eCommerce, you need a merchant account. A merchant account is one through which a seller receives money earned in a sale. This account is managed by a credit dealer who maintains this account for the seller. The catch here is that eCommerce has some bindings to which every trader must abide by. Credit cards and debit cards are used in online transactions, and the credit dealers manage the transactions initiated by these accounts. A card holder may also issue the request for a charge-back, which is incurred when the customer asks the company to refund them fully for their purchase because they think they were either cheated or not fully satisfied with the product, so they are forfeiting the trade. The merchant account which was being credited money for the transaction must repay this amount and hence, lose their profit. So we know that a transaction made is never concrete, and it can be turned back.
This problem and others like it make having a merchant account difficult. The credit dealers classify business into three categories on the basis of the risk involved in their trade ranging, from high to medium and low. High-risk businesses are those that have the greater possibility and a greater variety of dangers involved with their trade. These dangers have a great chance to cause the company to lose a lot of money and cause a loss to the dealer, who has to process many transactions and still earn nothing.
HIGH-RISK MERCHANT ACCOUNT
It might be shocking to hear, but the magazine sales subscription business is also a high-risk business. Even though magazines are the oldest and simplest trade around, there are still some complications with eCommerce involved. You might have already been turned down or faced a frozen account from a credit dealer. This setback occurs due to the fact that popular credit dealers do not believe in taking the fall for losing business. Companies like Visa and PayPal might hesitantly allow you a merchant account, but sooner or later, they will freeze your account and withhold all your funds. This withholding is their legal right and included in all of their merchant contracts. Finally, the merchant account is dropped, and you have to go looking somewhere else.
If you are wondering what you did wrong, then look no further. Magazine sales subscription is considered high risk for many simple reasons. The most common of these reasons are fraud and high charge-back possibility. Fraud can be done on both ends of the deal. Magazine sales companies have a high tendency to conduct sales over telephones and the customer usually provides their detail over the same channel, so the sales officer cannot verify if the credit card number provided to them is valid or not. Merchant fraud can be caused when the magazine sales team shows the price of a certain subscription to be "X" dollars, but when it comes to billing, they charge the customer "Y" dollars, which is higher than the marketed price.
High charge-back rate in magazine sales is also due to the customer satisfaction issue. Sometimes, a customer might grow uninterested by the quality of your magazine and may want to end their subscription to your magazine. Instead of contacting the magazine agency, the customer directly issues a charge-back request to their credit card provider and files for a complete reimbursement. This kind of recovery causes a high amount of loss to both the business and the dealer handling the transactions.
However, you should not be disheartened to hear all this. Even though major credit dealers will reject you, there are many others who are ready to take you in happily. These dealers provide many benefits to startups and specialize in high-risk merchant accounts. They even waive off the application fees, but in many cases, the per-transaction fees for a high-risk merchant account is usually very high. Therefore, whenever striking up a contract, you should thoroughly read the terms of your contract before you are caught in its snare.