Payment Processing Challenges and Solutions for eBook Sellers - DirectPayNet

Payment Processing Challenges and Solutions for eBook Sellers


eBooks are one of the most popular solutions for reading material in 2021. From cookbooks and textbooks to epics and romance novels—you can find a digital book for nearly every printed copy. Even though eBooks are so popular, especially through accessible devices like Kindles (and even eBook apps for smartphones), sellers are still considered high-risk and run into several issues when opening their own store.

Below, we’re outlining the most common payment processing challenges and solutions to keep in mind for eBook merchants.

Digital goods are difficult for merchants and payment processors to track

In the US, 191 million electronic books were sold in 2020 alone. The industry is booming with a revenue of over $1 billion, according to Statistica. Reading material on digital devices is more accessible than ever and it’s only improving as e-ink, tablets, and phone displays improve.

With as industry as big as this and supported by the likes of commerce giants like Amazon, then why is there such a strong incentive for payment processors to charge high monthly fees and deny service? Digital goods are difficult to track. When customers initiate a chargeback, there is less difficulty for them to succeed in receiving a refund for their credit card transactions than it would be if the book were physical. Digital goods can’t be tracked, monitored, or inspected in the way that physical goods can.

Customers May Not “Receive” the eBook After Purchase

A popular complaint among recipients of eBooks is that they never received it. It’s more than likely that the link to their digital book ended up in the Spam folder of their inbox. Or maybe customers type in the wrong email address for confirmation. In either case, customers complain, demand a refund, and then you end up with a chargeback.

Making it easy for customers to create an account on your website and throughout the checkout process can help turn that chargeback ratio in your favor as well as prevent abandoning their shopping cart. Merchant services that offer fraud and chargeback protection, like DirectPayNet, are an equally viable solution.

eBooks Are as Reliable as the Platform They Live on, even Free eBooks

While you, as a merchant, may not provide the app on which your customers will read the material, those customers will still equate your book with the app they use.

For example, if they purchase your material and download to their Nook e-reader, they expect it to be right there always in the library. But what if Nook gets an update and third-party digital reading material gets deleted? The blame is now on you. The same can be said for any major e-reader and publishing platform.

Providing a personal account or library for your customers and keeping up to date with the latest updates on reading platforms can alleviate this issue. Sending e-mail updates to your previous customers notifying them of the change can help prevent chargebacks and complaints. This form of contact may even act as evidence regarding any chargeback or refund disputes you have with your current payment processor.

Customers Fear Not Owning Their Purchase

More and more people worldwide prefer digital goods. Between explosive app sales, digital streaming options for movies and music, and even books, our digital lives are flourishing. But now there is a growing fear that someone who purchases digital goods doesn’t actually own them.

Digital products are only available as long as the publisher is active. If the publisher goes under, then those products go away. After some amount of time owning the product, a customer may become aware that their purchase could disappear at any time and try to sell it while it’s valuable, ask for a refund, or initiate a chargeback.

To combat this, you can reassure your customers that their products are always available to redownload at any time. Or offer suggestions on how to store their purchase in the cloud. Your proactiveness regarding customer satisfaction is a good sign for debit and credit card processors.

The value of a customer’s purchase decreases after they buy it, whether they read it or not

Customers That Don’t Open Their Book Want a Refund

Over 40% of eBooks never get opened. Never mind the fact that the item was purchase, if a customer doesn’t open a book, then they want a refund. This is an exact consequence of selling a digital good. Many eBooks are sold as PDFs or EPUB files, and small businesses could that only sell the file, not the reading platform, don’t have tracking capabilities related to the opening rate of those files.

This is far less likely to happen with physical books. With a digital book, the customer will go beyond asking you for a refund (and likely getting denied) and request it straight from their credit card company or bank account. This results in a chargeback.

Directly asking the customer for a review via email might prompt them to open the book they’ve purchased. You could ask something like “The cliffhanger at the end of Chapter 1 had us on the edge of our seats! What did you think?” to entice them to 1) read it, and 2) give your business a review.

Using payment options with credit card payment chargeback protection is a more direct way to handle the requests you already have and prevent them from happening in the future.

Lack of excitement after purchase decreases its value

Buyer’s remorse or a general lack of enthusiasm after making a purchase are common in every industry. Requesting refunds through credit cards, debit cards, and banks is a common activity for customers who couldn’t return an item in-store (or digitally).

Some people buy impulsively, and others lose interest. Whatever the case may be, it shouldn’t be on you as the merchant to pay for their change of heart. Again, gently reminding customers of their purchase is a good way to encourage them to read the product they’ve bought. And credit card processing services from companies like DirectPayNet who offer merchant accounts to high-risk businesses can keep that return/chargeback ratio low.

Upselling Products Disrupts Customer Satisfaction

It’s in a merchant’s best interest to maximize profits. One strategy many online e-commerce businesses use is upselling a product. Upselling is when a higher-priced item is suggested for customers to purchase instead of the product they are currently viewing. Higher pricing equals higher value equals better for the customer. That’s not always correct, though.

Upselling can frustrate the customer. If they purchase more than one of your products and feel that the product is valueless afterward, then that’s bad for business. Customers who experience this level of dissatisfaction often demand their money back.

Payment processors, like PayPal and Stripe, label eBook sellers as high-risk regarding this because businesses that sell products which can only be reviewed subjectively is a red flag, as well as selling only digital goods. When the reputation of your business relies on subjective customer data, it can hurt the bank’s or payment solution’s bottom line. That value and profitability of your business is only as strong as its reputation according to most service providers.

Merchant accounts offer credit card payments  and chargeback protection for eBook merchants

Using a merchant account designed around high-risk merchants like eBook business owners offers comprehensive payment solutions that makes equally easy for customers as it does for sellers.

DirectPayNet understands the nature of your business and the likelihood of chargebacks when it comes to selling digital goods. We offer chargeback protection as well as fraud protection that helps limit chargeback requests and fraudulent payments as well as cover you when it happens.

Our customer support staff is well-connected with banks and providers to provide you with customer payment methods that have low transaction fees and 24/7 service without the fear of frozen accounts or harm to your profits. We provide a payment solution that has PCI compliance so you can accept mobile payments and online payments with ease.

Scale your business with DirectPayNet. Contact us today to open your merchant account and start selling with your customer-friendly payment gateway. All major credit cards and debit cards like Visa, MasterCard, and American Express, as well as ACH transfers are accepted. Speak with out customer support staff to get started.

About the author

As President of DirectPayNet, I make it my mission to help merchants find the best payment solutions for their online business, especially if they are categorized as high-risk merchants. I help setup localized payments modes and have tons of other tricks to increase sales! Prior to starting DirectPayNet, I was a Director at MANSEF Inc. (now known as MindGeek), where I led a team dedicated to managing merchant accounts for hundreds of product lines as well as customer service and secondary revenue sources. I am an avid traveler, conference speaker and love to attend any event that allows me to learn about technology. I am fascinated by anything related to digital currency especially Bitcoin and the Blockchain.