Opening A Tech Support Merchant Account In India
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Setting up a tech support company in India (or anywhere) comes with a host of challenges, some obvious, others less so. One obstacle you may not have accounted for is the difficulty finding a merchant account provider for the business. Instead of trying to find the lowest rates possible, you probably found yourself stuck searching for any provider willing to set up the account and pair it with an acceptable payment gateway. Let’s take a look at why setting up a tech support merchant account or a merchant account in India can be difficult, what you can expect when taking on this task, and what you can do to find the best solution for your business.
Table of Contents
Tech Support Merchant Accounts in India are High-Risk
When merchant account providers and payment processors hear the words tech support or India, they immediate think two words: High Risk. Payment processing providers decide whether or not to approve an account mostly based on the perceived risk of fraud or default your business carries. When fraud occurs, the merchant account provider risks losing money. No one like to lose money. So instead of taking the risk, they choose to pass on your business. For some good information about what it means to be high-risk, check out this article.
For tech support services in India, the risk factor is two-fold. Indian merchant accounts are usually deemed high-risk, and tech support merchant accounts are usually deemed high-risk. Put the two together, and you get a perfect storm of risk factors prone to scare away the vast majority of merchant account providers. This leaves you in the Wild West of the high-risk merchant account world, dealing with seedy and unreliable providers potentially looking to take advantage of your desperation.
Tech Support Scams
These accounts are considered to have such a high level of risk because so much fraud occurs in this industry. One of the major issues is the prevalence of technical support scams. Fraudsters will set up a tech support call center, often in India, and either make cold calls or advertise their services. They use this guise to gain remote access to personal computers, at which point they convince the user that a major problem needs to be fixed, and will then proceed to fix the non-existent (or newly created) problem. These fraud issues are compounded by the fact that most if not all of the transactions processed by a tech support business in India are overseas transactions, usually from customers in the US. Card-not-present transactions between American buyers and Indian sellers are high-risk in general because of the statistical probability of fraud.
While your Indian tech support business may be completely legitimate, the banks have already dealt with so many fraudulent companies similar to yours that they are too afraid of losing money and don’t want to deal with the hassle of setting up the risky account.
What to Expect When Setting Up a Tech Support Merchant Account
I have good news and bad news for you at this point. The good news? There is hope for finding a merchant account provider for your business. The bad news? You’re probably going to have to pay a little bit extra, and may have to jump through some hoops to get your account set up.
Here are some things to consider:
- Rates: For your account to be worth the expense and risk for a provider, they will want to be compensated. This means that your rates will be higher than average, and you may not be able to qualify for interchange-plus pricing. You will have less negotiating room than other businesses do.
- Fees: Be prepared to pay substantial application fees and annual fees, as well as a monthly minimum. In most cases I encourage merchants to avoid these fees. But high-risk businesses like Indian tech support firms will often not have a choice in the matter. You will also most likely have to agree to an early termination fee, which is meant to protect the provider’s initial investment in setting up your merchant account.
- Rolling reserve account: One thing that your provider is likely to insist on is a reserve account. This means that a certain percentage of the payments you collect will be withheld from you for 30 to 90 days (or longer in some cases). The percentage will vary, but expect upwards of 25%, perhaps much more in the beginning. As you develop a relationship with the provider and prove that you are not fraud-prone, the provider may be willing to relax on the reserve account.
- Processing volume: Unless you are processing a fairly large amount of money each month, providers may not be willing to set up your account because of the extra time and work they’ll have to put in to get your account up and running.
- Legal paperwork: Perhaps most importantly, you need to be prepared to enter this process as you would a job application. You want to be able to prove to the best of your ability that your tech support company in India is legitimate and legal.
A couple of other things that, while not necessary, could make your life easier:
- Processing history: If you already have a processing history to show providers, you’ll have an easier time setting up the account. This information helps to lower your overall risk profile.
- US-based offices: If you have a US-based office and the company is owned by a US citizen, then this will also improve your ability to set up the account and help to lower the overall cost.
The Bottom Line on Indian Tech Support Payment Processing:
While it’s not always easy to get a tech support merchant account for an India-based business, it is generally possible. You should be prepared to pay a little bit extra, but at the same time you don’t need to let yourself get ripped off. If you’re having trouble finding a provider to set up your merchant account, or if you are worried about getting scammed in the process, you might want to try SMB Global. They are the only processor I know of that will accept tech support businesses, so they’re definitely worth a try.
Good luck!
Based in New York’s Hudson Valley, Tom has written for Merchant Maverick since 2013. His work is cited by publications including TechCrunch, Washington Business Journal, and Bank Advisor. He currently serves as Partner Marketing Manager, where he works to connect exceptional brands with the readers they serve best.
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Hello Guys,
I have a experience in Payment Gateway Support. Please could you recommend with some options.
Kind regards,
Sanket
Hi,
I have my own llc in PA i already applied lot of merchant Stripe,square,wepay,forte,bluepay they all suspend my account they state a reason that am having high risk business but i didn’t get any single charge back they put my money on hold please review my website and tell me now which merchant services should i have to apply.
which would be reliable for me and for my business for tech support
Thanks
Hello, I’m planning to open tech support in India. I have my uncle who is USA citizen. He even got business account in Wells Fargo bank but bank is afraid to provide Merhcant due to charge back. Can you help me what is alternative I can do in this. As my friend already ruining tech support from India. If he can why can’t me?
Legal paperwork: Perhaps most importantly, you need to be prepared to enter this process as you would a job application. You want to be able to prove to the best of your ability that your tech support company in India is legitimate and legal.
How do we make legal paperwork to make sure that the tech support which we are running is legal and legitimate ?
i need payment gateway for tech support for usa
high risk gateway
Hi Tom, i am Kunal this side from New zealand,i am a resident here and one of my friend from India who has opened a tech support company wants me to open a merchant account for his company in New Zealand as a payment gateway. i will be the merchant account holder and another company will be registered under my name and address.Can you please suggest me if its safe for me to do that. he has offered me some commission on that. please advice.
Hi i am looking for any other option then instabill or paypal for India based us tech support. is there any solutions
Hi Sourabh,
Unfortunately at this time, Instabill is going to be your best option.
Hi
Tom,
Can you suggest any tech support Merchant service provider,right now we are dealing with First data we have a 6 months statement ready to apply for new merchant .
Hi Mario,
I would recommend taking a look at Durango Merchant Services, Payline Data, and Instabill.
hii, we have a AUSTRALIAN based tech support firm, now looking at expanding to USA for online support. looking at merchant account options. we have just started and have done a handful of transactions in AU through eway and paypal – however both dont support USA payments
We have been using etransact worldwide for almost a year and we have never had any issues. They offer faster solutions for tech support businesses. Even their fee are very competitive. I personally rate them 5 stars.
Lorna.
Hi Guys,
I own a us registered company and currently processing trough e checks in my tech support business.
Is there any way so that we can accept Canadian checks ?
My Banks is ready to cash them, You suggestions would be highly appreciated
Thanks & Regards
Kevin Dason
Hello Tom,
I have a friend who has started a tech support business and he is planning to register a LLC in PA and set up an bank account. Is there any option for him to get his own merchant account from the bank instead of going through a payment gateway provider?
Thanks in advance.
Shiva,
Give Instabill a try. They may accept your account.
Tom ,
I want to start a genuine tech support business by providing good daily computer support to my customers for very less price with more value for their money. I really want to know can i use paypal when i know i am a genuine service provider however i might convince my customer by showing him the value of tech support that he might get from me other than those who want to sell such services for nearly half a grand. Please tell me will that be legal doing it through paypal from india, if there are challenges kindly explain.
Hi,
I think you are unlikely to get approved for a PayPal account for that type of business. If you are approved, you might experience funding holds or account termination later on. I’d suggest taking a look at Instabill. It will be more expensive than PayPal, but they can consistently get this kind of account set up without problems.
Hi Tom,
I have started a new business in Tech Support. I m looking for a Merchant account who can help me to run my business. I have register my company in India as pvt ltd. I m willingly to pay extra to the merchant account but don’t want to rely on 3rd party gateway. I don’t have any source in USA. I see a light of hope in your blog. Kindly help me with the information.
I would appreciate your help.
Dear Tom,
Myself Sumit Arora , I am a software developer by profession, lived in many countries including USA for 3 Years, I am not a us-resident or us citizen, but I have US’s SSN,Driving License . I have following situation and need your help on this case :
I have a distant friend who is running a tech support company in India through a call aggregator, every month his revenue is around $60K per annum. his current payment processor and gateway charging hefty amount from him.
He asked from me, whether I can help him ? he suggested following options :
– Open a company , Open a business checking account and enroll to some gateway in USA and provide him the way to do the things, and he will give me certain share on the transaction happened every month.
However I found various other ways e.g. 2Checkout to do the job,
May you please provide some of your comments on it, Need your help.
‘Sumit
Hi Sumit,
My advice would be to talk this over with Instabill. They specialize in this sort of account.
Good luck.
I have started with my own Tech Support business. I have register my company in India as PVT LTD. I don’t any source in US. Till now I was depended on 3rd Party Gateway but decided to pay extra to Merchant Provider rather using 3rd party Gateway.
I would really appreciate if you could help me to get the Gateway as possible in your blog. Looking forward to get your reply.
Hi Tushar,
Try out Instabill. They’re one of the best for this type of account.
I would like to hear about your opinion of the first option that Sumit asked about – starting a US business with a business account established with a payment processor through which the Indian company charges and the US business owner takes a cut of that. From the research I’ve done, it appears to be legal but seems a bit “sketchy” to me. The only potential issue arises if the support being charged for is fraudulent but if the support is real and the charge is just being made through a US companies payment processor, that seems like its ok. Any thoughts on this?
I also have questions similar to the ones asked by other readers. One of friends runs a call center in India and is asking me to set up a company here in US and get a payment gateway for his business.
Does anyone have any experience in setting up such company? Is this legal?
Thanks