Banks view the price structure of this company model as a risk. They may shut your account once the chargeback rate hits two percent or more since they believe there will always be an excessive risk of chargebacks for the transactions they execute. Chargebacks happen when the customer is required to receive a refund from the bank for their purchase. Every firm should anticipate at least a few chargebacks, but when they start to accumulate, banks will review your account more carefully. Customers may want their money back for a variety of reasons, and dissatisfaction with a good or service is just one of them. Some people decide to create claims because they are unsure or wish to conceal what they purchased (for example, when they get a charge from an adult entertainment company). Or just because they know they can get away with it and they want something for free. Banks always take the side of the client, never that of the continuity subscription merchant. Chargebacks take time and money for merchants since hey frequently have to return the full amount of the payment and pay a fee to the credit card company. Due to the fact that they will be the ones returning your customer’s money in the event of a chargeback, banks are also at risk. When there are too many chargebacks, the bank eventually loses money dealing with you. Bank employees had been informed for years that customers who complained about ongoing subscriptions could only be cancelled by the business receiving the money. But more recently, banking regulators have declared that banks must, almost without exception, cancel them when asked. The credit card companies will always take the customer’s side in these situations and refund their money. Despite the fact that it was not your fault, this leads to a chargeback for your business. When banks notice chargebacks, they become anxious because they think your company is at fault and will face significant dangers.

Many continuity subscription merchants use this charging scenario frequently. Banks have capped the permitted chargeback ratio due to these factors, but the likelihood of chargebacks increases as you sell more (and as your marketing and subscriptions become more successful). Since there is a bigger chance of fraud as a result of higher sales volumes, credit card processors may be wary of your direct marketing continuous subscription business model. Fortunately, by finding a merchant account provider who is familiar with this kind of business structure, problems involving subscription merchant accounts can be reduced and even avoided. In order to sell more subscriptions without worrying that your payment processing account will be suspended or cancelled, High Risk Pay services can set up the necessary frameworks for continued subscription billing and give you a smooth payment gateway.