Merchant account suggestions for annual web hosting subscriptions
Does anyone here process annual hosting payments and bill the client in advance for a year?
I am in the midst of starting up a website hosting company and 2 merchant processors are refusing to allow me to charge the client anually. They consider this "Future Fulfillment" which is a big risk to them. I definately understand where they are coming from.
Does anyone here have suggestions that will allow me to offer my customers annual hosting services thats prepaid for the year?
A lot of merchant processors don't like annual subscriptions due to the extra risk that they pose. While these transactions do indeed pose a higher potential risk, there are definitely processors out there who can underwrite an account with annual fees.
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Another thing that you might consider, is what is the average ticket size for these annual fees? There is a big difference between $50 per year and $5,000 per year. This is a greater risk to both you and the merchant, so the merchant is covering their behinds.