Digital download merchants enjoy the ease of running business without the hassle of physical products. As easy as it is to start a digital download business, this industry remains high risk and can cause high chargeback rates.

Digital download businesses have a challenging time finding banks and merchant services. Providers such as Revitpay work with high risk industries like this one so merchants can operate without worry.

What are Digital or Content Download Businesses?

Digital and content download businesses operate solely online. Businesses transfer or give access to digital products. These exchanges are instant and have the benefit of fast service. Additionally, digital businesses have a wider audience not limited geographically. 

Digital or content download businesses may sell:

  • Media (Movies and TV Shows)
  • Audiobooks and E-Books 
  • Software Programs
  • Online Courses and Education 
  • Virtual Private Networks (VPN) 
  • Web Hosting 
  • VOIP Payments 
  • Website Features
  • Membership Sites 
  • Web Design and SEO

What Does it Mean to be High Risk?

High risk businesses are those that have a higher chance of incurring chargebacks than others. Chargebacks result from customer disputes. These disputes revolve around some aspect of customer dissatisfaction. 

Fraud, misinformation, and technical problems are just a few causes of disputes. The nature of certain industries and businesses attract these issues. 

The digital download industry is just one of many that are more susceptible to disputes and chargebacks. 

Why are Digital Download Businesses High Risk?

Primarily Online

Any business that accepts card-not-present transactions are at risk for chargebacks. There is a higher chance of interception and fraud. This is true for over-the-phone payments, but even more so for eCommerce transactions. 

Digital download businesses rely on card-not-present capabilities to accept payments. This ease of transaction comes with the risk of stolen information.

Subscription Services

Many digital and content download businesses embrace subscription services to serve their clients without interruption. Recurring payments can be convenient for both the merchant and customer. However, monthly or annual payments can be missed by paying clients. 

Often, customers will find charges from a recurring service that they thought they had canceled or had forgotten about. If they hadn’t used the service or product, they may request a refund. Refund amounts can be hefty when recurring charges build up over time. This can back businesses into a dispute, then a chargeback. 

Technical Problems

Not every paying customer will have the accommodating software or device compatible with digital products. There are outdated or incompatible systems that cannot download or use certain downloads. 

Customers may pay for a service or product and find that they’re unable to use it to its full extent or at all. 

Additionally, merchants must ensure that transfers and downloads are smooth. Hiccups in giving access to digital products can frustrate customers and further cause chargebacks.

Managing Expectations

The trouble with digital products is that it’s easy to make claims that stretch the truth. Even if your product is successful, there will always be users that are not satisfied with what they were promised. 

Managing expectations well can include giving free trials so that users can try the product or service for themselves before purchasing.

High Risk Merchant Accounts for Digital Download Businesses

Digital download businesses do best with merchant services that cater to their unique needs. Revitpay is a high risk merchant services and accounts provider with a goal to lower chargeback rates. Contact us today to see how we can help your digital download business.