An Introduction to the Automotive Warranty Business
The global auto warranty market size value is projected to reach $294.7 billion by 2030. Some of the factors impacting the growth of this market include a rise in awareness of extended warranties, high cost of repairs, and increased growth of the e-commerce industry.
The extended warranties business is essential to car owners as it protects them from costly repairs caused by the workmanship and mechanical flaws. Every new car has a standard factory warranty from the manufacturer. This factory warranty is meant to cover all mechanical repairs for a limited period of time. But what happens when the factory warranty time period expires? This is where auto warranty merchants come in. An extended auto warranty continues to protect your vehicle even after the standard factory car warranty period ends.
Although these merchants provide an essential service to car owners, they face a unique challenge when it comes to warranty merchant processing of credit and debit cards and other forms of electronic payments. Due to the high chargeback ratio that often characterizes this business model, most payment processing companies are reluctant to offer warranty merchant services to the players in this industry.
Know All About Automotive Warranty Merchant Services
Categorized as a ‘high risk,’ it’s nearly hard to find a trustable payment processing partner to get an auto warranty merchant account. Fortunately, eMerchant Authority is a merchant services provider specializing in providing e-commerce solutions to high-risk segments in the market.
With our established connections with numerous financial accomplices, we ought to be in the league of specialists that can easily set up your auto warranty merchant account and permit organizations to receive their remittance in advance.
Essentially, comprehend that finding a relevant merchant account for an online auto business isn’t as simple as conversing with the local bank and their credit card processor. It’s solely because the automotive warranty merchant services are regarded as high risk, which implies that these merchant service providers, similar to the one offered by your regional banker, cannot guarantee your endeavor.
Therefore, you should open up a merchant account underwritten by a sponsor bank or already drafted in a house. It will make it easier for you to receive credit card payments. To serve this purpose, a high-risk merchant account provider such as the eMerchant Authority exists! We ensure that no problem withstands during payment processing for high-risk businesses and smooth transactions can occur.
Use our fast application to get a custom tailored merchant account that fits your needs.
Auto Warranty Merchant Account FAQ’s
Should I Get An Auto Warranty Merchant Account?
Understand the fact that when you own a legal organization, it is not your business but the automotive warranty industry that is considered high-risk. It is so because the extended automotive warranty business has a higher risk of facing financial losses for your support bank and credit card processor.
In certain situations, when you decide to sell an auto warranty via a credit card, the client has an option to file a charge within a six weeks duration. Additionally, as a matter of fact, your extended auto warranty doesn’t cover everything. So, when a client learns about it after they have purchased, they will likely file a chargeback.
As an owner of the extended warranty company, it falls on you to respond to their chargeback appropriately in situations like these. If you cannot do so, i.e., if you do not have enough money in your bank account to compensate for those chargeback funds, the credit card processors and their sponsor bank should come to your rescue by making desired refunds.
Ultimately, when there are many chargebacks, it will impose a financial threat on your auto warranty company’s credit card processor. And that is why auto warranty businesses are considered to be high risk mainly.
Can eMerchant Authority Help Me With Automotive Warranty Merchant Services?
The prime difference between an auto warranty company that accepts credit card payments regularly and low-risk processors that are on the verge of losing their merchant account is how efficiently they can minimize and manage chargebacks.
Since the automotive warranty industry is mostly occupied with small companies, they do not look into this matter unless it gets out of hand, invalidating the credit card acceptance option.
While talking about auto warranty companies, be aware that these companies are the biggest high-risk businesses in terms of chargebacks because they are easily vulnerable to what’s commonly known as a friendly chargeback.
Do You Know What A Friendly Chargeback Is?
Commonly known as friendly fraud, it occurs when a customer is likely to dispute a charge instead of trying to obtain a refund from the merchant. Usually, customers misinterpret this concept as simply a different method of getting their cash back, similar to that of a regular return.
Customers ought to file a friendly chargeback about auto warranties because they are not satisfied with the service they are provided with or if any claims have to be covered that previously haven’t been.
This will substantially influence your automotive warranty merchant services because your business has a continuous risk of cascading friendly chargebacks.
Furthermore, due to the unknown occurrence of situations, your extended auto warranty business should be ready with a yearly plan according to the geographic territory. A cataclysmic event in that district can cause thousands of clients to file legitimate claims all at once at the same moment. This might cause many automotive warranty merchant service providers to freeze and will not respond to all other claims.
Eventually, it will create a cascading effect where millions of thousands of clients will come forward and register their chargebacks, leading the company to its downfall and credit card processor vulnerable to your losses.
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WHY USE eMERCHANT AUTHORITY?
eMerchant Authority prides itself in being a leader when it comes to the provision of merchant account solutions. We provide merchant account services for both low and high-risk businesses.
Our services are secure and reliable.
Besides, we understand just how financially difficult it is to become a business owner. This is why when you partner with us you also enjoy transparent pricing with no long-term contracts or hidden fees.
Whether you’re a startup or an established business, you can count on us to provide you with a perfect merchant service solution with the latest hardware and software tools such as Clover systems that are perfect for your retail payment needs.
And because customer satisfaction is what we aim for, we offer ongoing support to all our customers. Our 24/7 customer support team is always on call to answer your questions and attend to your needs.
Here are other additional benefits that you receive when you apply for an internet merchant account with eMerchant Authority.
Merchant Account Experts
20+ Proven Bank Relationships
Fast Merchant Account Approval
E-Commerce & Retail Options
B2B Vendors Supported
Multiple Payment Solutions
Multiple E-Commerce Gateways
ACH, E-Check, Credit Cards
B2B Level 2/3 Data Discounts
3D Secure Frictionless Checkout
Intuitive Technology & Support
Gateway Recurring Billing
E-Commerce Cart Plugins
International Merchant Accounts
Dedicated Account Managers