Is your electronics business struggling to get a fair deal on a merchant account – or even to be accepted? NMA can help. Read on for our expert view on the challenges you face and then get in touch for more information about how we reduce your risks and costs.
It is a good time to be in the electronics industry: the demand for innovative consumer electronics and smart devices has never been higher: 42% of all American households now own smart speakers and 47% own smart televisions. These trends pushed the global consumer electronics market to a $1 trillion valuation in 2019 and a projected $1.5 trillion by 2026.
Yet despite this, the risk of fraud and chargebacks is higher than ever, thanks in part to the shift to e-commerce and card not present (CNP) transactions. CNP fraud is expected to cost retailers $130 billion by 2023, and the electronics industry is seen as high risk. Without proper management, this risk means electronics firms may not get approved for a merchant account or risk having their account frozen.
Why Are Electronics Companies Considered High-Risk By Banks and Credit Card Processors?
The electronics industry is a high risk for fraud because of a combination of expensive products and the high volume of sales done online. Additionally, the risk of chargebacks increases because customers are paying online for products they haven’t received yet: late delivery further increases this risk. Finally, the risk of damage to sensitive electronics products during the fulfillment process pushes the risk of chargebacks even further.
This combination of fraud and high levels of chargebacks means the electronics industry is perceived as high risk by service providers in the payments industry. Electronics companies face the prospect of either not getting approved for a merchant account or being forced to pay expensive fees to secure one.
To trade safely and at a fair price, electronics companies must do two things – put strategies in place to reduce the risk of chargeback and fraud, and work with a partner who understands their business and can help them get the high-risk merchant services they need at a fair price.
5 Things Electronics Companies Can Do To Reduce Risk
Once a chargeback has been issued, even an illegitimate one, your business could be taking a loss; of the 80% of merchants who file chargeback disputes, just 18% are successful. The best thing you can do is keep chargebacks from happening in the first place. In addition to this, you can utilize a comprehensive fraud prevention solution like Fraud Wrangler which can not only spot issues before they become chargebacks, but also protect your business with 3DS security features and more.
You can reduce chargebacks by:
- Providing excellent customer service
- Responding to communication from customers promptly
- Making returns and replacement quick and easy for wrong or damaged products
- Writing detailed product descriptions to ensure customers understand what they are purchasing and don’t purchase the wrong item
- Shipping items as quickly as possible: the longer shipping takes, the more likely the customer will initiate a chargeback
How NMA Can Help You Manage Your Risk
Unlike a typical bank, we can help seemingly high-risk companies to manage their risk effectively through a combination of careful underwriting, relationship building, and ongoing monitoring. By taking care of the small details, we turn ‘high risk’ accounts into ‘managed risk.’
Together, our payment processing solutions and global network of strategic partnerships enable your electronics company to save money, reduce risk, and help you get funds deposited safer and quicker than with other competing solutions.
Contact NMA today to learn more about our expertise in providing high-risk merchant services for electronics retailers. We Work For You®.