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Sales Made Easy - Best Merchant Accounts for Large Digital Goods |
Do you run a website selling large digital goods?
If so and you are looking for a merchant account provider, we're here to provide all the information you require including who you should be considering working with.
You are clearly in a rising sector, and as your sales volume rises you will want to know that everything is in order so you may keep taking those payments.
Hint: You will most definitely want to read on if you now use a payment aggregator such as PayPal or Stripe.
Before you decide, let's go over our top choices for big digital goods merchant services providers as well as all else you'll need to know.
Easy Pay Direct stands out as a premier choice for large digital goods merchant accounts, thanks to its robust infrastructure and extensive experience in the high-risk payment processing sector.
The company offers an easy-to-use platform that integrates seamlessly with various e-commerce systems, making it a favorite among digital goods merchants who need reliable and efficient transaction handling.
The standout feature of Easy Pay Direct is its proprietary EPD Gateway, which provides robust security measures, including advanced fraud protection and chargeback management tools.
Additionally, their customer service is top-notch, offering personalized support to help businesses navigate complex payment challenges.
- Strong focus on security with advanced fraud protection.
- Seamless integration with multiple e-commerce platforms.
- Excellent customer support with personalized assistance.
- Slightly higher fees compared to some competitors.
- The approval process can be stringent for high-risk merchants.
eMerchantBroker (EMB) has built a solid reputation as a go-to provider for high-risk merchant accounts, including those dealing in large digital goods.
EMB is known for its ability to accept a wide range of businesses, even those that have been turned down by other processors.
They offer a comprehensive suite of services, from chargeback protection to high-volume processing capabilities, making them ideal for digital goods merchants.
One of EMB's key strengths is their tailored approach, providing customized solutions that fit the specific needs of each business, which helps in optimizing the transaction process and reducing potential risks.
- Wide acceptance of high-risk businesses.
- Customized solutions tailored to individual business needs.
- Strong chargeback protection services.
- Higher processing fees for high-risk accounts.
- The setup process can be more complex and time-consuming.
3. PaymentCloud
PaymentCloud is a well-regarded merchant service provider, especially for businesses dealing in large digital goods.
They specialize in high-risk accounts and offer a smooth onboarding process with quick approvals.
PaymentCloud’s platform is highly versatile, supporting a wide range of payment methods and integrating well with various shopping carts and e-commerce platforms.
The company places a strong emphasis on security, providing robust fraud prevention measures and chargeback mitigation tools.
Additionally, PaymentCloud offers excellent customer support, with dedicated account managers to assist businesses in navigating their payment processing needs.
- Quick and efficient onboarding process.
- Versatile platform with broad integration capabilities.
- Strong security measures including fraud prevention and chargeback mitigation.
- Fees can be higher for certain high-risk categories.
- Some advanced features may require additional costs.
A merchant account is a business account used to accept payments from customers.
For businesses selling digital (online) products, a specific account for those funds is necessary, known as a digital goods merchant account.
If your business involves high-volume sales, you will need a large digital goods merchant account.
Think of your merchant account as a holding tank for your money post-sale. Transaction fees and other charges are deducted before the funds are deposited into your business bank account.
Numerous businesses sell digital products, such as:
- Website design companies
- SEO experts
- Gaming websites
- Streaming websites
- Digital download sites
- Website hosting merchants
- VPN merchants
- Tech support companies
There are many more, but you get the idea.
Payment aggregators, or payment service providers, are user-friendly, making them a common initial choice for digital product merchants.
However, they may not be the best or correct choice, as they carry significant risks for these businesses.
Payment aggregators don't require a dedicated merchant account. They usually offer flat-rate pricing with no monthly fees and no long-term contracts.
This seems ideal, right?
The issue is that companies like PayPal, Square, and Stripe have strict policies against working with high-risk businesses. Some merchants might consider being less than honest about their business models, but this could backfire.
Moreover, if there's an issue with your account, like excessive chargebacks in a month, your funds could be frozen and/or your account closed.
This could leave you spending months trying to access your money, which is detrimental to your business and personal finances.
As a high-volume digital goods merchant, it's crucial to know the available payment processing options.
Some methods are better than others; choose the one that suits your needs best.
Most digital goods merchants use payment gateways to process payments. This option is convenient as the gateway can integrate with your shopping cart.
Integration is typically seamless, with many payment processors offering white-label services. This ensures your brand appears on the checkout page, avoiding customer confusion.
When customers are ready to check out, they will be taken to a payment form to enter their information and complete the payment.
Depending on your business, a virtual terminal might be more suitable.
This method requires internet access. To accept payments, you log into a website and enter your customers' payment information.
If your digital goods involve an app, it's possible to process payments within the app. Your payment processor needs to integrate with the app’s checkout process.
As more people use their phones for various activities, this method is logical. Many merchant account providers can offer this alongside other methods listed above.
Businesses selling digital products online are considered high-risk, and high-volume sales increase this risk.
This classification is due to several factors:
- High-volume sales increase the likelihood of excessive chargebacks.
- Customers can easily dispute charges or request refunds for digital sales.
- All digital sales are card-not-present transactions, categorizing them as higher risk.
Research reveals many high-risk merchant service providers that might seem like a good fit.
Before committing, consider the following factors:
High-risk merchants should anticipate higher transaction fees from any payment processor they choose.
Transaction fees can be as high as 6% per sale.
Other fees to consider include:
- Fees for using a virtual terminal or payment gateway
- PCI compliance or non-compliance fees
- Monthly fees
- Annual fees
- Statement fees
Understand the fees you will be paying before signing a contract. Comparing several options helps you gauge the industry standard and find the best deal.
Research the reputation of every company you're considering. This includes any we’ve listed here.
Read reviews on platforms like Google Reviews, Facebook, Yelp, and others.
Note what customers like and dislike about a company and factor in these reviews when making your decision.
Your business might need to accept or want to accept recurring payments.
For example, if you have a game like Clash of Clans, you might want to offer customers the option to receive 1000 gems monthly.
The right payment processor can facilitate recurring payments, which can significantly boost your sales volume.
Armed with this knowledge, it's time to choose the company that will supply your merchant account and handle your payment processing.
Here’s what you should consider.
It might seem that credit and debit cards are the only payment methods you need, but that's not the full picture. Offering additional options can be beneficial.
Consider adding ACH and electronic check payments. These types of payments are processed differently and are generally considered lower risk compared to card-not-present credit and debit card transactions.
Lower risk translates to lower processing fees.
Moreover, credit and debit cards have expiration dates, meaning your customers' cards may eventually get declined unless they update their information, potentially causing you to lose customers.
In contrast, ACH and e-checks are linked to bank accounts, which typically don't change.
Offering these methods can simplify things for both you and your customers, as there will be no need to update information unless they switch banks.
This ensures any recurring payments continue smoothly unless the customer cancels, and one-time transactions are processed seamlessly.
Digital goods merchants have seen a significant rise in credit card fraud in recent years. Consider these statistics:
- Over 1.3 million identity theft reports were made in 2020.
- Identity theft was most commonly reported by individuals aged 30 to 39.
- Credit card fraud increased by 44.7% from 2019 to now.
- In 2016, more than 2.5 billion people were impacted by data breaches.
Fraud is a serious issue, and it's something you definitely want to avoid.
It's wise to choose a merchant account provider that offers robust fraud protection to safeguard your customers' account information.
Leading merchant account providers for digital goods will have strategies in place for chargeback protection and prevention.
They may offer educational resources to help merchants take the necessary steps to avoid chargebacks.
Some providers can even detect potential chargebacks before they become official, giving merchants time to address the issue.
Excessive chargebacks can lead to your merchant account being closed. Don’t hesitate to ask any prospective payment processor how they can help you mitigate this risk.
Here are a few more considerations for handling large-volume digital product payments:
Load balancing means your merchant account provider offers multiple merchant accounts. This is crucial for high-risk merchants with significant business volume each month.
With multiple accounts, your funds are distributed among them as agreed upon with your provider.
If issues like excessive chargebacks arise in one account, your business can continue operating because funds can still flow into other accounts, minimizing disruptions while problems are resolved.
Contracts from merchant account providers can vary significantly.
Ensure you thoroughly read every contract before signing. Look for:
- The length of the contract term
- Terms regarding account cancellation
- Transaction fees for each purchase type
- Any hidden fees not disclosed during the sales process
A merchant account provider can make numerous promises about their products and services, but reliable support is crucial when things go wrong.
And they will—issues arise in every business.
The key is whether your provider’s customer service team will be available to help when problems occur.
Determine the best way to contact tech support if needed. Ideally, the company you choose will provide a designated customer service representative or contact person.
Given the nature of your business, finding a provider that offers 24/7 customer support is advisable. This ensures that any issues, even those arising in the middle of the night, will be promptly addressed.
Choosing the right merchant service provider for your large digital goods business is crucial for ensuring seamless transactions, robust security, and reliable customer support.
Easy Pay Direct, eMerchantBroker, and PaymentCloud each offer unique strengths tailored to meet the needs of digital goods merchants.
- Easy Pay Direct stands out for its high-risk management capabilities.
- eMerchantBroker excels in personalized support and competitive rates.
- PaymentCloud offers versatile solutions with exceptional integration options.
Evaluate your specific business requirements and consider these top providers to enhance your payment processing experience and drive your digital goods business forward.