Extended Warranty Merchant Accounts & Credit Card Processing

Specialized Extended Warranty Merchant Services & Credit Card Processing for the Extended Warranties Industry!

Many Banks Have Stopped Providing Merchant Accounts to the Extended Warranties Industry But We Have Domestic Solutions!

Due to the contingency associated with sales that are pre-paid more than six months in advance in the Extended Warranty business, many US banks consider it a high risk industry and have stopped providing merchant accounts to businesses that provide extended warranties.

In fact, even many of the International high risk merchant accounts will not underwrite extended warranty businesses.

Many merchant account providers do not understand the issues surrounding the extended warranties industry and will provide a merchant account that will eventually be terminated, which is not only highly disruptive to any business, but it also makes it more difficult to qualify for a merchant account in the future, since the termination would have to be disclosed on future merchant applications.

CyoGate does offer credit card processing solutions specifically for merchants in the online, mail, and phone order extended warranties industry and we do have both domestic US and international solutions available. There are slightly higher credit card processing fees and a reserve fund is commonly, although not always, required for extended warranty merchant accounts due to the high risk of chargebacks associated with the industry. However, you can rest assured that you will not have your merchant account terminated simply for being in the Extended Warranties business.

For more information on our Extended Warranty merchant accounts, please contact us today, or apply for a merchant account using the button below.

Why Extended Warranties Are Considered High Risk

The core underwriting concern is the "contingency sale" model: the customer pays today for a service they won't need until an indeterminate future point. If the warranty company goes out of business or fails to honor a claim, the customer has legitimate grounds to dispute the original charge months or years later. Visa permits chargebacks up to 120 days after the charge; Mastercard's rules can extend this further — creating long-tail exposure most processors won't carry.

Domestic vs. Offshore Extended Warranty Processing

CyoGate has domestic US processing options for extended warranty businesses that can demonstrate: time in business and financial stability, clear written warranty terms disclosed to customers before purchase, a documented claims fulfillment process, and processing history with sustainable chargeback rates.

Chargeback Drivers in the Warranty Industry

• Claim denial disputes — customers whose warranty claims are denied dispute the original purchase as "services not rendered." Pre-disclosed limitations in writing are your strongest defense.
• Cancellation disputes — customers who believe they cancelled but were still charged. A streamlined cancellation process with email confirmation prevents the majority of these.

Chargeback prevention monitoring is particularly valuable for warranty businesses, intercepting disputes before they formally file and giving you the opportunity to resolve the issue without a chargeback record.

Rolling Reserve Requirements

Rolling reserves are common for extended warranty accounts, reflecting long-tail chargeback exposure. CyoGate works to minimize reserve requirements for qualified applicants. Domestic accounts typically carry lower reserve rates than offshore, and reserve funds are returned on a rolling basis as the hold period expires.

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Retail & Internet Merchant Accounts

An Internet Merchant Account is sometimes referred to as a "MOTO" (Mail Order & Telephone Order) Account because they all require the ability to process a credit card payment when there is no physical credit card present to be swiped. A standard retail "swipe" merchant account does not allow processing of these "card-not-present" transactions.

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High Risk Merchant Accounts

If the domestic banks are denying your merchant application because they believe your industry is considered high risk, CyoGate can help! We have an offshore network of merchant processing partners that enable us to provide low cost, high risk merchant solutions to a much wider range of businesses and industries.

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Internet Payment Gateway

The CyoGate Internet Payment Gateway offers one of the quickest and most cost effective ways to accept and process credit card and electronic check payments online. Our payment gateway works with most existing merchant accounts and supports hundreds of popular web shopping carts and eCommerce platforms.

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