Payment Processing Solutions for Businesses Offering Subscriptions
When businesses need to accept subscription-based payments from customers for their services, they need a payment gateway that will seamlessly process monthly charges, transfer the money to the right account, and make the process simple for everyone. At the same time, companies may experience some difficulties when looking for one of these services as they can fall into the category of high-risk merchant services due to potential chargebacks.
Use the tips below to find a quality merchant account provider to handle your subscription-based payments.
How Do Companies Qualify for Credit Card Processing?
A merchant account provider wants to make sure that a new merchant they work with will not be too risky. Businesses are considered risky if they:
- Have poor credit
- Have low or negative bank balances
- Have unpaid bills or collections
- Do not have consistent business traffic
- Have a high chargeback ratio
Every business is a little bit different, but these traits are used to offer the right processing solutions and rates to the company. When a business does not have its finances in order, it can be extremely difficult for that business to begin processing credit card payments. Before signing up for one of these services, ensure that the company is stable.
Why Are Chargebacks Such A Big Problem?
Chargebacks are a major problem for all credit card processors. These processors spend money every time they process a card, and they transfer the money to their partner business. Every time a chargeback is processed, the processor will give the money back to the customer, and the merchant will need to prove that the customer was aware of the product and billing procedures. Due to recent changes with Visa and MasterCard, a new mandate has changed how all subscription businesses process continuity payments. Merchants must now get consent from the card holder to allow them to store the card info for rebilling prior to billing the customer, along with a few other rules.
How Can Businesses Solve Their Chargeback Problems?
Businesses that have chargeback problems need to take steps to fix the problem before signing up with a credit card processor. Use these tips to lower the chargeback ratio and start accepting credit cards:
- Improve customer service. The business should do a much better job of educating customers. Customers who know what they are buying are much less likely to ask for a refund. At the same time, the customer service staff must try to salvage sales instead of instantly offering refunds.
- Offer store credits or exchanges instead. If the customer is unhappy, offer a store credit or exchange as a make good. The customer can get something that they want, and the business does not need to process a chargeback. This is a simple thing, but it can save a business quite a lot of time, money, and stress.
- Reduce chargebacks. Use a chargeback mitigation platform to aide in stopping and reducing chargebacks.
- Train and retrain staff every year. A company that trains and retrains its staff will improve customer service every year.
A company that offers subscription-based services must be prepared to charge clients every month or on a quarterly or annuual basis. However, most companies do not have the time or the energy to manually process new payments. The merchant services account will set up an automatic charge for each customer, and the system will do most of the work. The business owner or manager will see the subscription payments come in, and there will be a report from the processor about those payments.
When customers want to cancel their subscriptions, it is easy to remove them from the system. The company can quickly access their account, remove a customer, and delete their payment information.
When customers want to sign up for the subscription service, they will fill out a form that is used by the merchant processing account provider. The company that processes the payments will accept the information, store it, and process each payment. This is the best way to get customers onboarded. A manager or owner can check and manage their client list at any time, and they do not need to process credit cards manually.
The subscription services that companies offer can be burdensome if the credit card payments are processed manually. Use a merchant account for subscription payment processing and ensure that the business has very few chargebacks, has cash in the bank, and constantly improves customer service.
Flow Payments has decades of experience working with merchants who utilize subscription-based billing. Contact us today for a free quote.