Merchants function as professionals who deal with trade, dealing in commodities that they do not produce themselves, in order to produce profit.
A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. A merchant account also serves as an agreement between a retailer, a merchant bank and payment processor for the settlement of credit card and/or debit card transactions.
Merchant Account Marketing
Merchant accounts are marketed to merchants by two basic methods: either directly by the processor or sponsoring bank, or by an authorized agent for the bank and additionally directly registered with both Visa and MasterCard as an ISO/MSP (Independent Selling Organization / Member Service Provider). Marketing details are by card issuers like Visa and MasterCard, and are enforced by various rules and fines.
Marketing by Banks
A bank that has a merchant processing relationship with Visa and Mastercard, also known as a member bank, can issue merchant accounts directly to merchants. To reduce risk, some banks limit approval to merchants in its geographical area, those with a physical retail storefront, or those that have been in business for 2 years or more.
Marketing by Independent Sales Organization (ISO)/MSPs
To market merchant accounts, an ISO/MSP must be sponsored by a member bank. This sponsorship requires that the bank verify the financial stability and suitability of the company that will be marketing on its behalf. The ISO/MSP must also pay a fee to be registered with Visa and Mastercard and must comply with regulations in how they may market merchant accounts and the use of copyrights of Visa and Mastercard. One way to verify if an ISO/MSP is in compliance is to check a website or any other marketing material for a disclosure "company is a registered ISO/MSP of bank, town, state. FDIC insured". This disclosure is required by both Visa and Mastercard and will cause a fine of up to $25,000 if it is not clearly visible. In almost all cases, if there is no disclosure, the company is likely to be an uninformed 4th party or worse. In many cases unregistered operators have been responsible for some of the worst horror stories from merchants.
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Friday, June 26, 2009
Merchant Account Needs
Online shoppers today like to have choices when buying the things they like from web stores. Rather than limiting your customers to one choice when paying it is better to offer several ways for them to buy. For merchants who are just starting out it may be tempting to go with a free payment option like Paypal rather than investing to get a merchant credit card processing account. Before you decide, it’s best to consider what the fee structures of your options are like and how much per transaction they charge. It may cost more to get a merchant account up and running, but the process will be worth it in the long run as you will probably get more converting customers by offering options.
Having Paypal alone as a payment option has drawbacks that may be difficult to overcome. For instance, they reserve the right to freeze funds, so you may be without your money or unable to accept payments. Paypal doesn’t give you the ability to process orders off your web store. You may wish to manually collect payment information on some orders and you won’t be able to do that with Paypal. You may have to wait longer to get your funds deposited into your bank account. Although the process is easy, it may be a hassle for your customers to register with Paypal before ordering with you. It may also be difficult to setup recurring payments for your customers if that is a requirement with your eBusiness.
The only major drawback to merchants who are starting out with a merchant account may be the initial setup fees along with the recurring monthly fee. Some merchant account providers also require you to buy virtual processing software or a processing machine for your office. There may be an initial limit on the amount of orders you can process in a month of the amount of money you can accept per month. These limits are typically present until the merchant account provider gets to know you and your business trends.
Having Paypal alone as a payment option has drawbacks that may be difficult to overcome. For instance, they reserve the right to freeze funds, so you may be without your money or unable to accept payments. Paypal doesn’t give you the ability to process orders off your web store. You may wish to manually collect payment information on some orders and you won’t be able to do that with Paypal. You may have to wait longer to get your funds deposited into your bank account. Although the process is easy, it may be a hassle for your customers to register with Paypal before ordering with you. It may also be difficult to setup recurring payments for your customers if that is a requirement with your eBusiness.
The only major drawback to merchants who are starting out with a merchant account may be the initial setup fees along with the recurring monthly fee. Some merchant account providers also require you to buy virtual processing software or a processing machine for your office. There may be an initial limit on the amount of orders you can process in a month of the amount of money you can accept per month. These limits are typically present until the merchant account provider gets to know you and your business trends.
Doing It Without a Merchant
Doing It Without a Merchant
By now you've probably read a few of our articles about getting a merchant account. However, without two years of accounts for your business and a clear credit history you're probably going to hit major problems.
You may be able to convince a bank manager who you've been banking with for many years, to apply for an account on behalf of your new company, but without any real weight behind you you're going to be hitting some barriers. You can get around these, but there are certain cases where this will not be possible.
Oh woe! What can I do?
What's the answer to your merchant account woes, if you can't actually get a merchant account? Well, there are a number of companies providing a service whereby they will take the credit card orders from your site, process them, and then pay you by check at a later date. Sounds ideal, doesn't it? Well, there are many pros and cons to using these services. This article is all about these companies, and their systems.
What does this cost?
The services vary so much that it's hard to give a general figure. Commission charges can vary between about 10% to 20% of each transaction. You may also have to pay a membership fee per month, and possibly a fee for every new product you wish to sell through the service.
The Pros
The advantages of using these services are obvious. For a start, it cuts out the lengthy process of applying for and then obtaining a merchant account. This could easily take up to several weeks, time in which you could have been selling goods! The other advantage is that without these services, you may not have been able to sell your goods in the first place, since you're probably not eligible to get a merchant account anyway. However, these services are not without their disadvantages either..
The Cons
The disadvantages may be as blindingly obvious to you as the advantages were. You may find that certain types of goods aren't allowed, such as Adult materials, firearms, and the like. If you happen to be selling these sort of goods, then you'll be hitting a barrier once again.
The price is also a con. While getting a full merchant account system isn't particularly cheap, the savings add up once you receive barrages of orders. With a non merchant-account based system, you're left with paying a high commission on every order, plus probably paying fees for new products and amendments. As you can tell, it isn't the most flexible solution, which may leave some enthusiastic Web shopkeepers pulling their hair out.
You will also find that most providers keep back a percentage of your fees (over a certain amount) each month, say 50%, for safe keeping against chargebacks. Since they are technically the people selling the goods, they are responsible for any chargebacks by customers. As such, they keep back a percentage as a kind of deposit. You will be paid any held back fees after a predefined period of time, varying between vendor to vendor.
So, can I use this method?
After looking at several different providers of these merchant-less services, it appears that they primarily deal with companies who are selling tangible goods, or those selling software. The reasons for this are twofold. Firstly, they can keep a better track of actual goods, as opposed to 'services' and the like. Secondly, because they are officially the 'vendor' of your goods, they are responsibility for whatever happens. As such, they want to cover their backs wherever they can, and with tangible goods this is much easier. However, two of our featured providers do offer the intangible service.
However, you will see that there are providers who will allow you to sell intangible services through their systems, despite the majority dealing with tangible goods. They are always worth a try, especially if you have no other options available.
Who provides these services?
DigiBuy.com
Digibuy provide an immensely unique service to those wishing to sell software over the Internet. They take a 13.9% commission of each order, and charge either $29.99 or $199.99 for setup of your account, including one product. The higher fee of $199.99 allows you to use customizable order forms. You are then charged $9.99 per extra product you wish to add to the service.
No fees are held back by Digibuy, except their 13.9% commission, which makes this service appear to be fast, professional and worthy.
iBill.com
A defined leader in the market, iBill can provide a variety of services to you. They offer a plethora of options, from those who wish to sell intangible services (such as Web hosting etc.), to those with tangible goods. iBill do specify specific limits on transaction values, depending on your scenario. They also take between 11 and 15 per cent of each sale, which makes them a good deal.
If you're selling intangible goods, these are one of the few companies who'll let you do it without a merchant account. They're one of the big names, they try and look professional at all times, and they're definitely worth a try.
ABanx.com
ABanx provide a very similar service to IBill, providing services to retailers of both tangible and intangible goods. Within the first three months it appears as if ABanx will hold back any sales over $500, to protect against chargebacks, although it will pay the remaining sum to you later. ABanx charge a 14% commission, which may prove to be a cheap option for you if your volume is small.
The only thing to look out for with ABanx is that some of their services are still in beta-testing. If you're not sure about anything, remember to ask.
Conclusion
At this point, you're probably going to be facing a number of key decisions, and the most relevant to us is.. Do we get a merchant account, or allow someone else to process our orders? If you're planning on throwing in your full time job to set up a site selling products over the Internet, and you're destined to become big, perhaps it'd be better to try and go for a merchant account and persuading your bank manager to help you along the way.
If, however, you merely want to 'give it a go', and perhaps sell a low volume of goods, then a non merchant-account based system would probably do the trick, especially if selling arts and crafts or your own software packages.
By now you've probably read a few of our articles about getting a merchant account. However, without two years of accounts for your business and a clear credit history you're probably going to hit major problems.
You may be able to convince a bank manager who you've been banking with for many years, to apply for an account on behalf of your new company, but without any real weight behind you you're going to be hitting some barriers. You can get around these, but there are certain cases where this will not be possible.
Oh woe! What can I do?
What's the answer to your merchant account woes, if you can't actually get a merchant account? Well, there are a number of companies providing a service whereby they will take the credit card orders from your site, process them, and then pay you by check at a later date. Sounds ideal, doesn't it? Well, there are many pros and cons to using these services. This article is all about these companies, and their systems.
What does this cost?
The services vary so much that it's hard to give a general figure. Commission charges can vary between about 10% to 20% of each transaction. You may also have to pay a membership fee per month, and possibly a fee for every new product you wish to sell through the service.
The Pros
The advantages of using these services are obvious. For a start, it cuts out the lengthy process of applying for and then obtaining a merchant account. This could easily take up to several weeks, time in which you could have been selling goods! The other advantage is that without these services, you may not have been able to sell your goods in the first place, since you're probably not eligible to get a merchant account anyway. However, these services are not without their disadvantages either..
The Cons
The disadvantages may be as blindingly obvious to you as the advantages were. You may find that certain types of goods aren't allowed, such as Adult materials, firearms, and the like. If you happen to be selling these sort of goods, then you'll be hitting a barrier once again.
The price is also a con. While getting a full merchant account system isn't particularly cheap, the savings add up once you receive barrages of orders. With a non merchant-account based system, you're left with paying a high commission on every order, plus probably paying fees for new products and amendments. As you can tell, it isn't the most flexible solution, which may leave some enthusiastic Web shopkeepers pulling their hair out.
You will also find that most providers keep back a percentage of your fees (over a certain amount) each month, say 50%, for safe keeping against chargebacks. Since they are technically the people selling the goods, they are responsible for any chargebacks by customers. As such, they keep back a percentage as a kind of deposit. You will be paid any held back fees after a predefined period of time, varying between vendor to vendor.
So, can I use this method?
After looking at several different providers of these merchant-less services, it appears that they primarily deal with companies who are selling tangible goods, or those selling software. The reasons for this are twofold. Firstly, they can keep a better track of actual goods, as opposed to 'services' and the like. Secondly, because they are officially the 'vendor' of your goods, they are responsibility for whatever happens. As such, they want to cover their backs wherever they can, and with tangible goods this is much easier. However, two of our featured providers do offer the intangible service.
However, you will see that there are providers who will allow you to sell intangible services through their systems, despite the majority dealing with tangible goods. They are always worth a try, especially if you have no other options available.
Who provides these services?
DigiBuy.com
Digibuy provide an immensely unique service to those wishing to sell software over the Internet. They take a 13.9% commission of each order, and charge either $29.99 or $199.99 for setup of your account, including one product. The higher fee of $199.99 allows you to use customizable order forms. You are then charged $9.99 per extra product you wish to add to the service.
No fees are held back by Digibuy, except their 13.9% commission, which makes this service appear to be fast, professional and worthy.
iBill.com
A defined leader in the market, iBill can provide a variety of services to you. They offer a plethora of options, from those who wish to sell intangible services (such as Web hosting etc.), to those with tangible goods. iBill do specify specific limits on transaction values, depending on your scenario. They also take between 11 and 15 per cent of each sale, which makes them a good deal.
If you're selling intangible goods, these are one of the few companies who'll let you do it without a merchant account. They're one of the big names, they try and look professional at all times, and they're definitely worth a try.
ABanx.com
ABanx provide a very similar service to IBill, providing services to retailers of both tangible and intangible goods. Within the first three months it appears as if ABanx will hold back any sales over $500, to protect against chargebacks, although it will pay the remaining sum to you later. ABanx charge a 14% commission, which may prove to be a cheap option for you if your volume is small.
The only thing to look out for with ABanx is that some of their services are still in beta-testing. If you're not sure about anything, remember to ask.
Conclusion
At this point, you're probably going to be facing a number of key decisions, and the most relevant to us is.. Do we get a merchant account, or allow someone else to process our orders? If you're planning on throwing in your full time job to set up a site selling products over the Internet, and you're destined to become big, perhaps it'd be better to try and go for a merchant account and persuading your bank manager to help you along the way.
If, however, you merely want to 'give it a go', and perhaps sell a low volume of goods, then a non merchant-account based system would probably do the trick, especially if selling arts and crafts or your own software packages.
Merchant Account Pitfalls
Merchant Account Pitfalls
As with any business, those in the merchant service providing business want to sell as much as possible and make as much as possible. While the fierce competition in this market can prove beneficial to consumers, there are a number of tricks and pitfalls that you should try to avoid when choosing your provider.
Get the Information
Most providers will provide most of the information you require on their Web site since this is one of their main sales channels. If they don't list their rates on the site, be wary. They may be trying to trick you into calling their sales department who may prove to be high-pressure salesmen.
How They Make Their Money
The majority of providers charge a sizable application fee for you to be able to use their services. They also make a good deal of money on selling virtual terminal software, or by leasing terminal equipment. This means that a lot of their profit is made on the initial sale, and so they may be pushing you to join up with them quickly.
Many providers will also take a percentage of your monthly transactions as a commission for themselves. This is rarely more than a few percent, but it's worthwhile getting the figures before you sign up. You may discover that if your sales are under a certain figure per month, they may take a larger percentage. You need to consider this when doing your figures.
The important thing to remember is to get the low-down on a provider before you sign up. Of course, you shouldn't spend unnecessary amounts of time doing this, but at least be sure that there aren't any peculiar clauses in their contracts which could get you into trouble further on down the line.
The Things You Might Not Be Told
In their haste to get you signed up with their services, some providers may make you sign a contract, and then suddenly unleash odd charges upon you. You may find that the bank fees cannot be waived, and these will be payable immediately. They may also forget to mention how their commission system works, as explained in the last section. You may also have a minimum processing fee forced upon you.
They may also be international issues as well. If a card from a country not covered by your processor is processed, an extra fee will usually be charged, nearly 4% of the total amount. If you expect to be accepting a lot of cards from other countries then ask your processor what the situation is. They may be a large company who can process in multiple currencies. You need to find this out.
The "Reserve"
One of the most important points to cover is the "reserve". The reserve is a fee which the processor will keep back as 'insurance' against chargebacks and other problems. You will either have to pay the reserve (similar to a deposit) directly, or you will have a share of your transactions taken, on top of your commission.
Remember to ask your potential provider how they deal with the reserve issue. It's important to ask, since after taking their commission, their reserve, and possibly their international handling charges as well as their monthly processing fee, you may end up with only 50% of every transaction! It's important that you get all the facts and know what to expect. This can then help you price your goods and services more reasonably.
You may also find that if you take in more sales than you expected for the first few months after becoming a merchant, the bank may want to keep back some of your funds, so be optimistic about your projected income, and try to discover what you and your processor can do in varying scenarios, from good to bad.
Credit History
When you apply for your merchant account, and processor, you will be asked a series of questions about your projected sales, current business situation and various other matters. The answers you give to these questions may affect the rates and monthly fees that you are charged. However, once your credit status is checked by the company, you may find that your charges go up, especially if you have tried to disguise the truth in the first case.
Conclusion
In conclusion, you should be ready to get out there, become a merchant, and start raking in some serious dollars! However, you need to remain cautious of the pitfalls and tricks of the industry. If you're not sure of something that a company says to you, ask and investigate. You also need to uncover as many of the hidden costs as possible, and factor them into your budget.
We hope you don't get caught by any of the tricks, but if you do see them, we hope you manage to avoid them! Enjoy the pleasure of becoming a merchant.
As with any business, those in the merchant service providing business want to sell as much as possible and make as much as possible. While the fierce competition in this market can prove beneficial to consumers, there are a number of tricks and pitfalls that you should try to avoid when choosing your provider.
Get the Information
Most providers will provide most of the information you require on their Web site since this is one of their main sales channels. If they don't list their rates on the site, be wary. They may be trying to trick you into calling their sales department who may prove to be high-pressure salesmen.
How They Make Their Money
The majority of providers charge a sizable application fee for you to be able to use their services. They also make a good deal of money on selling virtual terminal software, or by leasing terminal equipment. This means that a lot of their profit is made on the initial sale, and so they may be pushing you to join up with them quickly.
Many providers will also take a percentage of your monthly transactions as a commission for themselves. This is rarely more than a few percent, but it's worthwhile getting the figures before you sign up. You may discover that if your sales are under a certain figure per month, they may take a larger percentage. You need to consider this when doing your figures.
The important thing to remember is to get the low-down on a provider before you sign up. Of course, you shouldn't spend unnecessary amounts of time doing this, but at least be sure that there aren't any peculiar clauses in their contracts which could get you into trouble further on down the line.
The Things You Might Not Be Told
In their haste to get you signed up with their services, some providers may make you sign a contract, and then suddenly unleash odd charges upon you. You may find that the bank fees cannot be waived, and these will be payable immediately. They may also forget to mention how their commission system works, as explained in the last section. You may also have a minimum processing fee forced upon you.
They may also be international issues as well. If a card from a country not covered by your processor is processed, an extra fee will usually be charged, nearly 4% of the total amount. If you expect to be accepting a lot of cards from other countries then ask your processor what the situation is. They may be a large company who can process in multiple currencies. You need to find this out.
The "Reserve"
One of the most important points to cover is the "reserve". The reserve is a fee which the processor will keep back as 'insurance' against chargebacks and other problems. You will either have to pay the reserve (similar to a deposit) directly, or you will have a share of your transactions taken, on top of your commission.
Remember to ask your potential provider how they deal with the reserve issue. It's important to ask, since after taking their commission, their reserve, and possibly their international handling charges as well as their monthly processing fee, you may end up with only 50% of every transaction! It's important that you get all the facts and know what to expect. This can then help you price your goods and services more reasonably.
You may also find that if you take in more sales than you expected for the first few months after becoming a merchant, the bank may want to keep back some of your funds, so be optimistic about your projected income, and try to discover what you and your processor can do in varying scenarios, from good to bad.
Credit History
When you apply for your merchant account, and processor, you will be asked a series of questions about your projected sales, current business situation and various other matters. The answers you give to these questions may affect the rates and monthly fees that you are charged. However, once your credit status is checked by the company, you may find that your charges go up, especially if you have tried to disguise the truth in the first case.
Conclusion
In conclusion, you should be ready to get out there, become a merchant, and start raking in some serious dollars! However, you need to remain cautious of the pitfalls and tricks of the industry. If you're not sure of something that a company says to you, ask and investigate. You also need to uncover as many of the hidden costs as possible, and factor them into your budget.
We hope you don't get caught by any of the tricks, but if you do see them, we hope you manage to avoid them! Enjoy the pleasure of becoming a merchant.
Merchant Account Offers
Merchant account Best Offers and Commissions
Merchant Express - Merchant Account Provider / Processor
Merchant Express are based in the heart of New England and pride themselves on their membership of their local Better Business Bureau. They can provide merchant accounts to a variety of businesses and offer competitive rates. There are no AVS, daily batchout, AMEX set up or annual fees, and the application fee is low, at $75.
A rate of approximately 2% is charged on all transactions, as well as a fixed fee of around 30 cents. They will also cater for swiped cards, in retail situations, and charge lower rates in these instances. Merchant Express will also give you a plethora of "free gifts" when you sign up with them. An online pre-application form is available, making the process simple and non time-consuming. Processing services are provided separately.
Advanced Merchant Services - Merchant Account Provider
Advanced Merchant Services offer both merchant accounts and on-line check acceptance. However, they don't publish their rates directly onto their Web site but claim they offer "the most competitive rates and fees in the industry".
They claim that over 50,000 companies use their services to process credit cards, and the company is backed by the Imperial Bank of California. They are compatible with nearly all the credit cards you could hope for. Visa, Mastercard, American Express, Discover/Novus, Diners Club and Carte Blanche, which makes this account immensely comprehensive. There are also no fees to pay until you're accepted and ready to start accepting credit cards. The company Web site is home to a simple form, which you can use to get the company's rates with.
NetBanx - Processor, Bureau
NetBanx offer a well rounded system which should appeal to the majority of people wanting to accept credit card payments over the net. While the service is based in the UK, it appears as if they'll accept registrations world-wide for their merchant 'bureau' service. You may feel, for real merchant accounts, that they may not be an ideal choice if you're located in the USA.
NetBanx are compatible with a selection of major UK banks, and are able to pass any transactions you receive via your Web site straight to your merchant account provider. To apply for a merchant account, however, you will have to get in touch with one of NetBanx's preferred banks directly and arrange a merchant account yourself. NetBanx will then provide secure server services, authorise any credit card transactions, and then passes the transaction on to your merchant account provider.
Netbanx charge between 1 and 4 per cent per transaction, based on the value of the sales you make. If you do over 10,000 pounds (roughly $16,000) of business within a month, you'll only be paying a 1% fee. For their Bureau service, charges of between 5 and 8 per cent are levied. There is also an upfront fee to pay, depending on the level of service you require, and the number of products you wish to sell.
Overall, Netbanx offer a comprehensive and professional looking service, that would be an ideal choice for those located in the UK. For those in the US, however, it may be advisable to look elsewhere.
Authorize.Net - Processor
While not actually providing merchant accounts, authorize.net do a good job of handling the authorisation and processing of credit card transactions. Their services are used by over 60,000 Internet merchants, which makes them appear as an immensely popular choice.
Authorize.net provide their own system which allows you to authorise, process and manage credit card and electronic check transactions in a real-time, online environment from any computer with an Internet connection and a Web browser. The merchant merely sends Authorize.net the information required using a secure encrypted Internet connection. From here on, Authorize.net handle the details.
As well as providing regular Internet credit card processing services, their Virtual Terminal can be used by traditional off-line business who are looking for a faster, easier way to authorise and manage credit card transactions. For Internet based businesses, the Authorize.net "WebLink" system can be used.
Authorize.net is controlled by Go2Net, Inc, a long standing member of the online community.
CVP Merchant Services - Merchant Account Provider
CVP offer a no-nonsense, simple to navigate Web site, packed full of no-nonsense information. CVP claims a 99% approval rate with all applicants, and they specialise in retail, mail order and Internet businesses. CVP was founded in 1990 with the belief that "our fair prices and customer service [are] unsurpassed in the industry".
CVP will process Visa, Mastercard, American Express and Discover, as well as debit cards. They can provide a virtual terminal for you to process cards or can sell terminal hardware. Check guarantee services are also provided. At this moment, CVP will only accept applications from US based businesses.
CVP charge a 2.29% discount rate on each transaction as well as a fixed fee of $.20. In a retail situation, when cards are being swiped, the charge is 1.49% and $.15 per transaction. A monthly minimum processing fee of $20-25 is charged. There is also no application fee required.
Electronic Transfer Inc. - Merchant Account Provider, Processor
Electronic Transfer Inc. boast that their service offers you a plethora of options for free. There's no application fee, no AMEX setup fee, no credit restrictions and no processing limits. ETI has been in the merchant account business since 1989, predating the World Wide Web, which gives them experience in dealing with retail situations, as well as Internet based scenarios.
As well as claiming to approve your application within 3 days, ETI offer some attractive rates. A fee of $.30 is charged per transaction, and then a discount of rate of 1.49 to 3.5 per cent is charged. Funds will also be credited to your bank and will be available after 48 hours.
You can choose to purchase terminal software and process your own credit card orders, or ETI can provide their own realtime processing system. Setup for this facility is $195 and a fee of $.25 is charged per transaction. Finally, ETI offer a 24 hour support line, unlike the majority of providers.
eCardNet - Merchant Account Provider
Offering a variety of online and offline solutions, eCardNet claims to be able to find a solution for you. Their Web site presents the whole world of merchant accounts in a concise and easy to understand way, which proves to be quite refreshing, compared to many other merchant account providers.
With eCardNet, as with many other providers, you simply enter credit card details into a special Web site, and then these are processed and charges are credited to your account. eCardNet don't appear to actually provide any automatic processing services of their own, although they resell the Authorize.net system.
As background information, the company has been operating for 16 years and, last year, processed $2 billion worth of transactions. This company has been around a long time, and they explain everything in enough detail to make things smooth and easy.
Merchant Express - Merchant Account Provider / Processor
Merchant Express are based in the heart of New England and pride themselves on their membership of their local Better Business Bureau. They can provide merchant accounts to a variety of businesses and offer competitive rates. There are no AVS, daily batchout, AMEX set up or annual fees, and the application fee is low, at $75.
A rate of approximately 2% is charged on all transactions, as well as a fixed fee of around 30 cents. They will also cater for swiped cards, in retail situations, and charge lower rates in these instances. Merchant Express will also give you a plethora of "free gifts" when you sign up with them. An online pre-application form is available, making the process simple and non time-consuming. Processing services are provided separately.
Advanced Merchant Services - Merchant Account Provider
Advanced Merchant Services offer both merchant accounts and on-line check acceptance. However, they don't publish their rates directly onto their Web site but claim they offer "the most competitive rates and fees in the industry".
They claim that over 50,000 companies use their services to process credit cards, and the company is backed by the Imperial Bank of California. They are compatible with nearly all the credit cards you could hope for. Visa, Mastercard, American Express, Discover/Novus, Diners Club and Carte Blanche, which makes this account immensely comprehensive. There are also no fees to pay until you're accepted and ready to start accepting credit cards. The company Web site is home to a simple form, which you can use to get the company's rates with.
NetBanx - Processor, Bureau
NetBanx offer a well rounded system which should appeal to the majority of people wanting to accept credit card payments over the net. While the service is based in the UK, it appears as if they'll accept registrations world-wide for their merchant 'bureau' service. You may feel, for real merchant accounts, that they may not be an ideal choice if you're located in the USA.
NetBanx are compatible with a selection of major UK banks, and are able to pass any transactions you receive via your Web site straight to your merchant account provider. To apply for a merchant account, however, you will have to get in touch with one of NetBanx's preferred banks directly and arrange a merchant account yourself. NetBanx will then provide secure server services, authorise any credit card transactions, and then passes the transaction on to your merchant account provider.
Netbanx charge between 1 and 4 per cent per transaction, based on the value of the sales you make. If you do over 10,000 pounds (roughly $16,000) of business within a month, you'll only be paying a 1% fee. For their Bureau service, charges of between 5 and 8 per cent are levied. There is also an upfront fee to pay, depending on the level of service you require, and the number of products you wish to sell.
Overall, Netbanx offer a comprehensive and professional looking service, that would be an ideal choice for those located in the UK. For those in the US, however, it may be advisable to look elsewhere.
Authorize.Net - Processor
While not actually providing merchant accounts, authorize.net do a good job of handling the authorisation and processing of credit card transactions. Their services are used by over 60,000 Internet merchants, which makes them appear as an immensely popular choice.
Authorize.net provide their own system which allows you to authorise, process and manage credit card and electronic check transactions in a real-time, online environment from any computer with an Internet connection and a Web browser. The merchant merely sends Authorize.net the information required using a secure encrypted Internet connection. From here on, Authorize.net handle the details.
As well as providing regular Internet credit card processing services, their Virtual Terminal can be used by traditional off-line business who are looking for a faster, easier way to authorise and manage credit card transactions. For Internet based businesses, the Authorize.net "WebLink" system can be used.
Authorize.net is controlled by Go2Net, Inc, a long standing member of the online community.
CVP Merchant Services - Merchant Account Provider
CVP offer a no-nonsense, simple to navigate Web site, packed full of no-nonsense information. CVP claims a 99% approval rate with all applicants, and they specialise in retail, mail order and Internet businesses. CVP was founded in 1990 with the belief that "our fair prices and customer service [are] unsurpassed in the industry".
CVP will process Visa, Mastercard, American Express and Discover, as well as debit cards. They can provide a virtual terminal for you to process cards or can sell terminal hardware. Check guarantee services are also provided. At this moment, CVP will only accept applications from US based businesses.
CVP charge a 2.29% discount rate on each transaction as well as a fixed fee of $.20. In a retail situation, when cards are being swiped, the charge is 1.49% and $.15 per transaction. A monthly minimum processing fee of $20-25 is charged. There is also no application fee required.
Electronic Transfer Inc. - Merchant Account Provider, Processor
Electronic Transfer Inc. boast that their service offers you a plethora of options for free. There's no application fee, no AMEX setup fee, no credit restrictions and no processing limits. ETI has been in the merchant account business since 1989, predating the World Wide Web, which gives them experience in dealing with retail situations, as well as Internet based scenarios.
As well as claiming to approve your application within 3 days, ETI offer some attractive rates. A fee of $.30 is charged per transaction, and then a discount of rate of 1.49 to 3.5 per cent is charged. Funds will also be credited to your bank and will be available after 48 hours.
You can choose to purchase terminal software and process your own credit card orders, or ETI can provide their own realtime processing system. Setup for this facility is $195 and a fee of $.25 is charged per transaction. Finally, ETI offer a 24 hour support line, unlike the majority of providers.
eCardNet - Merchant Account Provider
Offering a variety of online and offline solutions, eCardNet claims to be able to find a solution for you. Their Web site presents the whole world of merchant accounts in a concise and easy to understand way, which proves to be quite refreshing, compared to many other merchant account providers.
With eCardNet, as with many other providers, you simply enter credit card details into a special Web site, and then these are processed and charges are credited to your account. eCardNet don't appear to actually provide any automatic processing services of their own, although they resell the Authorize.net system.
As background information, the company has been operating for 16 years and, last year, processed $2 billion worth of transactions. This company has been around a long time, and they explain everything in enough detail to make things smooth and easy.
Merchant Account Implement
How to Implement a Merchant Account
Sketching out your digital shop
Before you apply for an e-commerce merchant account, you need to establish a strategy for your new venture. Are you selling memberships? A wide range of products? A single product? An ongoing service? Whatever your situation, you'll need to approach the task from a certain direction. Decide what your goals are, and stick with them until you're established.
Choose suitable software for your e-commerce site
You're probably going to need software to run your e-commerce site, especially if you have a large catalogue of items to sell. The software will act as an electronic catalogue, allowing you to enter your wares, categorize them and price them accordingly. E-commerce software usually allows you to enter your own design templates so that your site looks the way you want it to.
Even if you're only going to be operating a simple membership service, you'll need a program to handle new subscribers and supplying passwords, although there are some specialist providers who can supply these services directly on their own servers.
How an e-commerce site works
To establish what needs to be done before applying for your merchant account, let's run through a sample e-commerce site. Your customer arrives at your site, and is invited to browse a database of items. Product descriptions, pictures , and prices are all displayed to the customer by the database driven e-commerce software. They pick and choose from a variety of products and these are placed into their 'shopping basket'.
Now the user clicks on the Checkout button. Having decided to purchase their chosen items, the user fills out a delivery and payment form, handing over their credit card details, address, and other relevant information. Where do things go from here?
This is the point where different systems/methods can be used. If you're using an online authorization company who provides a secure server for your orders to be sent to, then once the user submits their payment details, it will go to the processors secure Web site, they will pass through the instruction to debit the card, and e-mail you the rest of the details (delivery address, product choices, etc.).
On the other hand, if you run your own secure server, the details will be sent to your own server. Then, depending on the setup, forwarded onto your credit card processor via programs installed on your server, or stored on the server for you to send, or process, manually.
Most Merchant Account Providers can provide you with equipment and software to allow you to process all credit card orders yourself, saving you from paying an online credit card processor to do it. However, this means you will have to provide the secure server for accepting the credit card information, and then you'll have to take each order and run it through your software or credit card terminal. Using an online credit card processor simplifies matters by sending the details straight to them, and they process the orders automatically.
After Processing
After the card has been processed by yourself, or your online authorization company, the customer's card will be debited, and your Merchant Account credited within usually a couple of days. The Merchant Account Provider will also take a commission of approximately 5% per transaction.
Once you have the details of the order, the products selected and the delivery address, you must take action straight away and e-mail your customer a digital invoice, or at least a confirmation of the order. Many e-commerce software packages will deal with this for you, so there shouldn't be a need to worry.
You will want to arrange dispatch of the product promptly, to reduce the risk of 'chargebacks' when people become dissatisfied with waiting for their orders. Chargebacks cost you money, and won't put you in good favor with your Merchant Account Provider.
Linking your Credit Card Processor with your Merchant Account
If you opt to use an online credit card processor in conjunction with your e-commerce software, you will need to supply the credit card processor with details to link transactions to your merchant account. When you get a merchant account, you will be provided with a e-commerce merchant account number, which you can supply to the credit card processor. When a transaction comes through on your account, it merely delivers the money (minus commission) to the specified merchant account.
Sketching out your digital shop
Before you apply for an e-commerce merchant account, you need to establish a strategy for your new venture. Are you selling memberships? A wide range of products? A single product? An ongoing service? Whatever your situation, you'll need to approach the task from a certain direction. Decide what your goals are, and stick with them until you're established.
Choose suitable software for your e-commerce site
You're probably going to need software to run your e-commerce site, especially if you have a large catalogue of items to sell. The software will act as an electronic catalogue, allowing you to enter your wares, categorize them and price them accordingly. E-commerce software usually allows you to enter your own design templates so that your site looks the way you want it to.
Even if you're only going to be operating a simple membership service, you'll need a program to handle new subscribers and supplying passwords, although there are some specialist providers who can supply these services directly on their own servers.
How an e-commerce site works
To establish what needs to be done before applying for your merchant account, let's run through a sample e-commerce site. Your customer arrives at your site, and is invited to browse a database of items. Product descriptions, pictures , and prices are all displayed to the customer by the database driven e-commerce software. They pick and choose from a variety of products and these are placed into their 'shopping basket'.
Now the user clicks on the Checkout button. Having decided to purchase their chosen items, the user fills out a delivery and payment form, handing over their credit card details, address, and other relevant information. Where do things go from here?
This is the point where different systems/methods can be used. If you're using an online authorization company who provides a secure server for your orders to be sent to, then once the user submits their payment details, it will go to the processors secure Web site, they will pass through the instruction to debit the card, and e-mail you the rest of the details (delivery address, product choices, etc.).
On the other hand, if you run your own secure server, the details will be sent to your own server. Then, depending on the setup, forwarded onto your credit card processor via programs installed on your server, or stored on the server for you to send, or process, manually.
Most Merchant Account Providers can provide you with equipment and software to allow you to process all credit card orders yourself, saving you from paying an online credit card processor to do it. However, this means you will have to provide the secure server for accepting the credit card information, and then you'll have to take each order and run it through your software or credit card terminal. Using an online credit card processor simplifies matters by sending the details straight to them, and they process the orders automatically.
After Processing
After the card has been processed by yourself, or your online authorization company, the customer's card will be debited, and your Merchant Account credited within usually a couple of days. The Merchant Account Provider will also take a commission of approximately 5% per transaction.
Once you have the details of the order, the products selected and the delivery address, you must take action straight away and e-mail your customer a digital invoice, or at least a confirmation of the order. Many e-commerce software packages will deal with this for you, so there shouldn't be a need to worry.
You will want to arrange dispatch of the product promptly, to reduce the risk of 'chargebacks' when people become dissatisfied with waiting for their orders. Chargebacks cost you money, and won't put you in good favor with your Merchant Account Provider.
Linking your Credit Card Processor with your Merchant Account
If you opt to use an online credit card processor in conjunction with your e-commerce software, you will need to supply the credit card processor with details to link transactions to your merchant account. When you get a merchant account, you will be provided with a e-commerce merchant account number, which you can supply to the credit card processor. When a transaction comes through on your account, it merely delivers the money (minus commission) to the specified merchant account.
Merchant Account Discription
What Are Merchant Accounts and Why Should You Want One?
Scenario
You've decided to get yourself into business on the Web, or you're an established company who wants to sell goods and services on-line. While browsing around your favorite sites, you've noticed a plethora of adverts which grab your attention. "Take Credit Cards Now", they scream, "0% Commission!".
Fighting your way through the jungle of e-commerce hype can be difficult, but iBoost wants to make it simple for you. You need a merchant account? You want to sell on-line? Let us help you find some answers to those nagging questions.
Credit Cards? Who cares?
Your customers are all using credit cards to make purchases on the Web already, so don't ignore the demographics!
Retailers refusing to enter the e-commerce arena are probably digging themselves an early grave. You know you want to make money using the Internet, especially if you already have an existing site promoting your business. Take it a step further, and actually sell your products online.
You're worried about the cost? It's significantly cheaper than opening a new shop!
What is a Merchant Account?
A Merchant Account involves a special type of arrangement with a bank or clearing house that allows you to accept credit card payments into a special bank account (your "Merchant Account"). The results of any credit card transactions passed through your online authorization company are then, hopefully, credited to your account if the transaction is approved.
Why use a Merchant Account?
Having a Merchant Account is the most cost effective way of accepting payment by credit card. It's not the only way, as will be discussed in our Doing It Without A Merchant section. But, put simply, once you have a merchant account (and a company who will authorize the payments online), you will be able to accept credit card numbers on your site, and then receive any payments due to you. It's as simple as that.
How does it work?
Getting the money from your customers credit card and into your account involves several stages. The first is actually approving the sale and taking the customer's credit card details on your Web site. Next, the card has to be verified and approved, to check that it's not been stolen, or has expired. Your Merchant Account company may provide this service, or you may choose to use an online authorization company, such as DataCash. It's wise not being too cheap with companies who provide authorization services, since accepting invalid credit card transactions could cost you dearly.
After the card has passed rigorous security checks, your merchant account provider (or online authorization company) then passes the details to their credit card processor who debit the customer's credit card and deposit the money into your merchant account. This chain of events takes between 1 and 2 days with most merchant account providers, although the features that your chosen provider offers may turn out to be different. We'll be covering a number of merchant account providers in our reviews.
The other method
While some Merchant Account Providers offer an 'all-in-one' solution where they, supposedly, handle your merchant account and the processing of the credit card orders, you may prefer to let separate companies handle each section. For example, you may let one company provide the online authorization service, and get a merchant account yourself with your chosen bank.
When we come to review services, later on in this series, we'll investigate both methods. Remember, however, that using the 'all-in-one' method may mean a larger commission is taken out of your transactions, whereas the latter method may just cost you a larger startup fee.
Scenario
You've decided to get yourself into business on the Web, or you're an established company who wants to sell goods and services on-line. While browsing around your favorite sites, you've noticed a plethora of adverts which grab your attention. "Take Credit Cards Now", they scream, "0% Commission!".
Fighting your way through the jungle of e-commerce hype can be difficult, but iBoost wants to make it simple for you. You need a merchant account? You want to sell on-line? Let us help you find some answers to those nagging questions.
Credit Cards? Who cares?
Your customers are all using credit cards to make purchases on the Web already, so don't ignore the demographics!
Retailers refusing to enter the e-commerce arena are probably digging themselves an early grave. You know you want to make money using the Internet, especially if you already have an existing site promoting your business. Take it a step further, and actually sell your products online.
You're worried about the cost? It's significantly cheaper than opening a new shop!
What is a Merchant Account?
A Merchant Account involves a special type of arrangement with a bank or clearing house that allows you to accept credit card payments into a special bank account (your "Merchant Account"). The results of any credit card transactions passed through your online authorization company are then, hopefully, credited to your account if the transaction is approved.
Why use a Merchant Account?
Having a Merchant Account is the most cost effective way of accepting payment by credit card. It's not the only way, as will be discussed in our Doing It Without A Merchant section. But, put simply, once you have a merchant account (and a company who will authorize the payments online), you will be able to accept credit card numbers on your site, and then receive any payments due to you. It's as simple as that.
How does it work?
Getting the money from your customers credit card and into your account involves several stages. The first is actually approving the sale and taking the customer's credit card details on your Web site. Next, the card has to be verified and approved, to check that it's not been stolen, or has expired. Your Merchant Account company may provide this service, or you may choose to use an online authorization company, such as DataCash. It's wise not being too cheap with companies who provide authorization services, since accepting invalid credit card transactions could cost you dearly.
After the card has passed rigorous security checks, your merchant account provider (or online authorization company) then passes the details to their credit card processor who debit the customer's credit card and deposit the money into your merchant account. This chain of events takes between 1 and 2 days with most merchant account providers, although the features that your chosen provider offers may turn out to be different. We'll be covering a number of merchant account providers in our reviews.
The other method
While some Merchant Account Providers offer an 'all-in-one' solution where they, supposedly, handle your merchant account and the processing of the credit card orders, you may prefer to let separate companies handle each section. For example, you may let one company provide the online authorization service, and get a merchant account yourself with your chosen bank.
When we come to review services, later on in this series, we'll investigate both methods. Remember, however, that using the 'all-in-one' method may mean a larger commission is taken out of your transactions, whereas the latter method may just cost you a larger startup fee.
Merchant Account
If you decide to open an e-commerce store, you are going to have to become familiar with merchant accounts and payment gateways. In order for you to receive funds from an online transaction, you will need to have some sort of merchant account. Although your bank can probably provide one you should plan on paying dearly for it. If you do not want to do this you can check into the more popular e-commerce merchant accounts available online. With e-commerce becoming so popular, gaining a merchant account has never been easier.
Payment gateways act as a sort of go-between for the sellers shopping cart and the financial institutions involved in the transaction. Gateways are not visible to the shopper and handle the transaction between your customers financial institution and your merchant account. This is all done behind the scenes when the customer clicks buy it now or enters the checkout.
There are also third-party credit card processors such as Paypal. They do charge more per transaction but there is no monthly fee. This is best if you are just starting out in e-commerce and are unsure of how the payment process works. Almost everyone has a Paypal account. Once you are on your way to becoming an established business, you will want to check more thoroughly into merchant accounts and payment gateways to save money.
All transactions go through the payment gateway. They provide information to and from the buyers and sellers financial networks. Once this is done, the money from the sellers account goes into your merchant account.
It is extremely important that you check the differences in rates before choosing a payment gateway and merchant account. Don’t settle on the first company you come across. Do some investigating or you may end up losing money and fast. Check the services and the rates for both payment gateways and merchant accounts. Ultimately you will want to get the most services for the most reasonable amount of money. That doesn’t always mean the cheapest. You often get what you pay for and that goes for e-commerce as well.
There should be no hidden fees involved in any type of merchant account or payment gateway. Fees should be laid out for you to see. If you do not see a complete list of charges that would be incurred, do not use that service. There are reputable services and not so reputable services so know what you are getting.
Merchant accounts act on behalf of the seller whereas a payment gateway is an information port for all of the financial networks involved in the transaction. This includes the buyer and the seller. Businesses must have both a payment gateway and a merchant account if they are not using a third-party service. Without a merchant account a seller cannot receive money from an online transaction. Without a payment gateway, the transaction cannot take place at all. This is the major difference between the two.
Payment gateways act as a sort of go-between for the sellers shopping cart and the financial institutions involved in the transaction. Gateways are not visible to the shopper and handle the transaction between your customers financial institution and your merchant account. This is all done behind the scenes when the customer clicks buy it now or enters the checkout.
There are also third-party credit card processors such as Paypal. They do charge more per transaction but there is no monthly fee. This is best if you are just starting out in e-commerce and are unsure of how the payment process works. Almost everyone has a Paypal account. Once you are on your way to becoming an established business, you will want to check more thoroughly into merchant accounts and payment gateways to save money.
All transactions go through the payment gateway. They provide information to and from the buyers and sellers financial networks. Once this is done, the money from the sellers account goes into your merchant account.
It is extremely important that you check the differences in rates before choosing a payment gateway and merchant account. Don’t settle on the first company you come across. Do some investigating or you may end up losing money and fast. Check the services and the rates for both payment gateways and merchant accounts. Ultimately you will want to get the most services for the most reasonable amount of money. That doesn’t always mean the cheapest. You often get what you pay for and that goes for e-commerce as well.
There should be no hidden fees involved in any type of merchant account or payment gateway. Fees should be laid out for you to see. If you do not see a complete list of charges that would be incurred, do not use that service. There are reputable services and not so reputable services so know what you are getting.
Merchant accounts act on behalf of the seller whereas a payment gateway is an information port for all of the financial networks involved in the transaction. This includes the buyer and the seller. Businesses must have both a payment gateway and a merchant account if they are not using a third-party service. Without a merchant account a seller cannot receive money from an online transaction. Without a payment gateway, the transaction cannot take place at all. This is the major difference between the two.
Merchant Account Tips
Based on discussions with merchants over the last couple of months it would appear that the low cost merchant account provider Clickbank is losing popularity in favour of other third party processors.
The reason for this is Clickbank's unfortunate credit card verification process which seems to be refusing many perfectly valid credit cards.
Not only does this mean it is becoming more difficult for international merchants to get an account (because the Clickbank website won't let them pay the activation fee) but also Clickbank may well be losing your website perfectly legitimate orders.
Many merchants have been complaining about a drop in sales over the last few months, coupled with a growing list of dissatisfied customer emails explaining that their credit card, which is perfectly valid, keeps getting refused when they try to order.
Potential customers have written to us, complaining that they are unable to complete purchases, because their credit cards have been rejected by Clickbank. They insist that their cards are clean... I'm inclined to believe that. Just last week a customer whose card was rejected by Clickbank ended up purchasing 3 domains for which we accepted payment via 2Checkout."
Indeed, in recent discussions with Chuck McCullough, author of the excellent Affiliate Mistakes book, he told me he'd had a similar experience with his business.
The reason for this is Clickbank's unfortunate credit card verification process which seems to be refusing many perfectly valid credit cards.
Not only does this mean it is becoming more difficult for international merchants to get an account (because the Clickbank website won't let them pay the activation fee) but also Clickbank may well be losing your website perfectly legitimate orders.
Many merchants have been complaining about a drop in sales over the last few months, coupled with a growing list of dissatisfied customer emails explaining that their credit card, which is perfectly valid, keeps getting refused when they try to order.
Potential customers have written to us, complaining that they are unable to complete purchases, because their credit cards have been rejected by Clickbank. They insist that their cards are clean... I'm inclined to believe that. Just last week a customer whose card was rejected by Clickbank ended up purchasing 3 domains for which we accepted payment via 2Checkout."
Indeed, in recent discussions with Chuck McCullough, author of the excellent Affiliate Mistakes book, he told me he'd had a similar experience with his business.
Merchant Accounts In Turmoil
Merchant Account In Turmoil
If Your Business Is At Risk?
The possibility of third party merchant providers getting closed down because of new Visa and MasterCard regulations last year. We've had Globill go out of business leaving thousands of websites without credit card processing facilities.
The the latest bombshell - one of the net's largest and most highly regarded third party merchant provider not only closed thousands of accounts without warning, but also sent out a press release informing their trusting clients that all funds had been frozen for an undisclosed period of time.
That provider was Pay Systems.
Until then the future had looked very rosy indeed.
I know numerous merchants who have been incredibly happy with their accounts, most notably because PaySystems had gone the extra mile to provide a truly amazing account, including:
* Weekly payments
* Competitive rates
* Wide range of businesses accepted
* International merchants accepted
Unlike many other providers, PaySystems required quite a myriad of paperwork to open an account - which they used to assess risk for new clients, keeping themselves "safe" (or so they thought) and allowing them to offer such low rates.
Unfortunately even this careful attention was not enough as their facility was cancelled.
It's not yet exactly clear who is to blame but that's of little consequence to those who've lost not just their accounts but also, for the time being at least, their recent profits.
So what's the lesson to be learned here?
Merchant accounts are a rapidly changing world, where even the strongest can be caught off guard.
No matter *how* good your system is things out of your control will go wrong.
My two favourite third party merchant account providers - Clickbank and 2CheckOut - so far seem safe but who knows what the future may hold.
I suppose the greatest lesson is to have backup. I really do have numerous accounts that I use for different purposes and if one were to go down, I could quickly recover.
And even Clickbank and 2CheckOut have had technical difficulties in the past with power outages and hackers taking down their computers. Unfortunately that's life and no matter who you use these things can happen.
If you're a Clickbank user however, one new tool that can help you, solve these instances where Clickbank's systems go down.
It's a new piece of software that can tell if there's a problem with Clickbank. And if there is, it'll automatically send your visitors over to your backup processor so you don't lose a single order. Then as soon as Clickbank goes back online the software switches your order link back.
So protect yourself, and your business, in this uncertain world. You just never know what's around the corner.
If Your Business Is At Risk?
The possibility of third party merchant providers getting closed down because of new Visa and MasterCard regulations last year. We've had Globill go out of business leaving thousands of websites without credit card processing facilities.
The the latest bombshell - one of the net's largest and most highly regarded third party merchant provider not only closed thousands of accounts without warning, but also sent out a press release informing their trusting clients that all funds had been frozen for an undisclosed period of time.
That provider was Pay Systems.
Until then the future had looked very rosy indeed.
I know numerous merchants who have been incredibly happy with their accounts, most notably because PaySystems had gone the extra mile to provide a truly amazing account, including:
* Weekly payments
* Competitive rates
* Wide range of businesses accepted
* International merchants accepted
Unlike many other providers, PaySystems required quite a myriad of paperwork to open an account - which they used to assess risk for new clients, keeping themselves "safe" (or so they thought) and allowing them to offer such low rates.
Unfortunately even this careful attention was not enough as their facility was cancelled.
It's not yet exactly clear who is to blame but that's of little consequence to those who've lost not just their accounts but also, for the time being at least, their recent profits.
So what's the lesson to be learned here?
Merchant accounts are a rapidly changing world, where even the strongest can be caught off guard.
No matter *how* good your system is things out of your control will go wrong.
My two favourite third party merchant account providers - Clickbank and 2CheckOut - so far seem safe but who knows what the future may hold.
I suppose the greatest lesson is to have backup. I really do have numerous accounts that I use for different purposes and if one were to go down, I could quickly recover.
And even Clickbank and 2CheckOut have had technical difficulties in the past with power outages and hackers taking down their computers. Unfortunately that's life and no matter who you use these things can happen.
If you're a Clickbank user however, one new tool that can help you, solve these instances where Clickbank's systems go down.
It's a new piece of software that can tell if there's a problem with Clickbank. And if there is, it'll automatically send your visitors over to your backup processor so you don't lose a single order. Then as soon as Clickbank goes back online the software switches your order link back.
So protect yourself, and your business, in this uncertain world. You just never know what's around the corner.
Merchant Account
Merchant Account Tips And News
The four major features to look for in a great credit card processing account. There's a lot to consider before committing to a merchant account and this article will outline the broader points. I still recommend that you do a little more digging to get to the finer details that can also affect which account and provider is your ideal fit.
Interchange Pricing
Interchange pricing was once available to only the largest business, but it has steadily been making its way into mainstream. Interchange pricing functions by applying a standard mark-up to the actual processing cost for each transaction. Typically called interchange plus or cost plus, this type of pricing is much less expensive and more transparent than the currently more popular tiered merchant account pricing model. Start-ups and smaller businesses may still have a tough time finding interchange pricing. If this is your situation, try using a comparison site like Card Fellow to get quotes from multiple providers. The competition on these sites usually produces better rates and fees.
No cancellation fee
Believe it or not, contract terms that carry hefty cancellation fees aren't the norm in the credit card processing industry. Slowly but surely more and more merchant service providers are offering month-to-month accounts in order to stay competitive. The best merchant accounts don't have a cancellation fee.
A knowledgeable, dedicated representative
The last thing that you want to do when you need assistance is to sit on hold waiting for the next available representative.” The best merchant account will have a dedicated representative that you can call when you need help. There's real value in building a relationship with your merchant account rep. Even better is finding a local representative that can deliver supplies or loaner terminals if you're in a pinch.
Value Aside from Rates and Fees
Low rates and fees are important when you're looking for the best merchant account, but they're not everything. The best accounts have value in other areas as well. Look for things like universal credit card machines and gateways. This will allow you to switch providers if need be without buying new equipment of modifying your existing e-commerce web site.
Borrowing a little from the earlier point, look for an account with excellent customer service. Think about what's best for you in terms of customer service. Would you rather have a local representative that you can call when you need help, or are you fine with calling the national processor from a toll-free number?
It's tough to grind the aspects of a great merchant account into four quick categories, but this should get you started. Again, check out the Merchant Council for a more comprehensive explanation of things is you've got a free moment. Merchant processing is typically one of the largest recurring businesses expenses and they're certainly deserving of your time.
The four major features to look for in a great credit card processing account. There's a lot to consider before committing to a merchant account and this article will outline the broader points. I still recommend that you do a little more digging to get to the finer details that can also affect which account and provider is your ideal fit.
Interchange Pricing
Interchange pricing was once available to only the largest business, but it has steadily been making its way into mainstream. Interchange pricing functions by applying a standard mark-up to the actual processing cost for each transaction. Typically called interchange plus or cost plus, this type of pricing is much less expensive and more transparent than the currently more popular tiered merchant account pricing model. Start-ups and smaller businesses may still have a tough time finding interchange pricing. If this is your situation, try using a comparison site like Card Fellow to get quotes from multiple providers. The competition on these sites usually produces better rates and fees.
No cancellation fee
Believe it or not, contract terms that carry hefty cancellation fees aren't the norm in the credit card processing industry. Slowly but surely more and more merchant service providers are offering month-to-month accounts in order to stay competitive. The best merchant accounts don't have a cancellation fee.
A knowledgeable, dedicated representative
The last thing that you want to do when you need assistance is to sit on hold waiting for the next available representative.” The best merchant account will have a dedicated representative that you can call when you need help. There's real value in building a relationship with your merchant account rep. Even better is finding a local representative that can deliver supplies or loaner terminals if you're in a pinch.
Value Aside from Rates and Fees
Low rates and fees are important when you're looking for the best merchant account, but they're not everything. The best accounts have value in other areas as well. Look for things like universal credit card machines and gateways. This will allow you to switch providers if need be without buying new equipment of modifying your existing e-commerce web site.
Borrowing a little from the earlier point, look for an account with excellent customer service. Think about what's best for you in terms of customer service. Would you rather have a local representative that you can call when you need help, or are you fine with calling the national processor from a toll-free number?
It's tough to grind the aspects of a great merchant account into four quick categories, but this should get you started. Again, check out the Merchant Council for a more comprehensive explanation of things is you've got a free moment. Merchant processing is typically one of the largest recurring businesses expenses and they're certainly deserving of your time.
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