So you are a software developer created your own peace of software masterwork and now would like to show it to the world and make some money online selling it! Thats great But the biggest hurdle you can face online today is that starting point how to start selling online and accept credit cards for your software products when you dont have any selling history, just starting out and nobody gives you payment processing services.
This problem is the same problem like starting your own business from scratch no capital, no gains, no possibility to start. In order to sell your software product online, you need to have a special online merchant account to accept direct credit card payments from your customers. However, applying for a merchant account on the bank is a real headache, because:
1)Youre just starting you have a great software product that you would like to sell online, however your business is new, so you have no business history. All banks will say sorry, the doors are closed for you.
2)Processing history: when you want to sell your software online, all banks ask you for a credit card processing history. You need to show the payment processing volumes that you make per month. But what can you show only 0s everywhere, because you havent even started? Sorry, bank will say no merchant account for you.
3)Refund and chargeback rates should be low: all acquiring banks need to evaluate your processing risks and they need to see your chargeback levels (that they dont exceed 0.5-1% of all sales) and evaluate your refund rates. Again, what would you show them when you are not processing payments at all. Again banks show you a big finger.
4)Digital business risks: you have a great product and you are sure that it will sell online greatly, however all banks view your software selling business as a very high risks. You are exposed to many customers returning the product and asking for a refund. They dont know how you manage your customers complaints and if you really return the funds for unsatisfied ones. Selling software products is viewed as a high risk online business by most banks. This doesnt help you start processing online.
5)Show your business license: some banks might even ask you to show your business licenses and software registration documents, patents or etc. They usually require your financial documents of the company profit and loss documents, shareholder information and business activity records. This doesnt help you when you are a single developer or a small company looking to start selling online your newly developed software program.
6)Time consuming process: you might have heard of merchant accounts getting approved within 24 hours! However, this is a total non-sense. Yes, you might get your softwares website checked within this time period, however, the problem is that after this you will be required to provide a ton of company documents, licenses, registration certificates, your personal details. Once the bank receives such documents they go over everything thoroughly, check your credit rating, query all credit agencies for your companys financials. This approval process usually takes from 2-3 weeks up to 6 months. Usually it takes around 2 months to have everything signed and merchant account working Some products (especially software) has time sensitive offers. You cant let yourself wait so much time
7)Integration headache: even if you manage to go all this bureaucracy nightmare and you get a merchant account, then you need to hire developers to integrate your website directly to the banks raw payment gateways to accept your orders.
Getting a merchant account to accept credit cards online for your software product is a real time consuming and daunting task However, the good news is that there is a simple solution for this problem. Instead of trying to get a merchant account, just signup on a 3rd party payment processor. Such company will accept credit card and Paypal payments for you and then will pay out all your funds directly to your bank account. They sell your software online. You wont need to open a merchant account, nor hire developers to integrate your website into the banks payment gateways.
Sometimes when you face a hurdle, you think that its over Not! Never give up, because there is always a solution waiting for you to sell software online and accept credit cards you just need to find it.