posted on August 17, 2004 08:45:23 PM
We'd like to make online credit card processing available through our Vendio and eBay stores. Can anyone throw out some suggestions on who you use, how are the rates and fees, and how easy was it to set up?
Thanks!
posted on August 17, 2004 11:32:20 PM
I looked at Vendio and they use Verisign, which is a VERY expensive gateway. I use Authorize.net, which is much more reasonable. If you stay with Vendio, be prepared to pay through the nose for your gateway.
Also, realize that accepting credit cards is very expensive. You have to do a lot of business to justify the cost of the thing. I have a merchant account, and here is a breakdown of some of the fees:
1) $10.00 per month stattement fee. Yes, $10.00 to the bank that clears my credit cards just to mail me a statement (and eBay buyers complain about high S&H).
2) A gateway fee at $29.95 per month.
3) 35 cents per transaction for authorizations (whether they process or not) and 5 cents for address verfication (again regardless of whether they process or not). In other words, if somebody gives you a card over its limit, you still have to pay 40 cents even if the sale is never completed. Compare that to PayPal's 35 cents charged only if the transaction is completed. And believe me, you will get cards that do not process.
4) Some merchant accounts charge a set up fee of from $50 to $250 or more. This is a one-time charge, but be sure to ask about it.
While I do get a bit lower discount rate than PayPal (2%) the fees above eat up a lot of the savings.
Another thing to warn you about. When you are negotiating your merchant account, be very careful. The world of credit card processing is filled with for lack of a better word, crooks. One guy who "got me approved" for a merchant account went ahead and started to set the account up without my signature on the merchant account agreement. You have to provide a lot of financial information to these folks, including checking account data, probably PayPal statements, and so forth. When I saw the discount rate (3%) I told him I was no longer interested. Well, he sent the paperwork on through (without my signature) and I got hit with a "setup fee" of $35.00 as an ACH debit to my checking account. One call to the bank that did the debit corrected the situation, but it just floored me the guy would go ahead and set up the account without a signed contract.
Another guy got me approved for a merchant account, and he called me to get my credit card number for the setup fee. He informed me that he needed to charge me sales tax. I do business in WA state, and he was in Nevada.
I explained that I do not do business in Nevada, so I am not subject to his sales tax. He then said he would have to collect WA state sales tax. I asked for his permit number in WA state since this sounded like baloney to me. He said he did not have one. Later, I heard that Nevada has no sales tax either. Makes you wonder how many folks have paid "sales tax" to the crook and it went into his pocket instead of to the state. I believe that this would be fraud in some states.
Any way, just wanted to let you know the pitfalls of merchant accounts. They are great if you can find a good deal and recoup your fees through a lower discount rate. However, for somebody doing a few thousand dollars a month, it might be better to just deal with PayPal (I know, I know, they are a PITA, too).
posted on August 18, 2004 05:54:16 AM
any time you use a service,there is a fee-just because the card is no good,whether the card is stolen,closed,exceeds its credit limit or bad address,it uses the same resources to find out.
your local bank would be a good place to start,COSTCO if you are a member,if you dont like the monthly fixed charges,there is a service for 35 dollars a year ,you can enter the cc information on their site or send your customer an invoice where they can troop to their site to enter their cc data.
it is 35 per year,3.5% discount rate and 35 cents transaction fee and when it comes time to transfer the proceeds to your bank account,there is a 1/2% fee-WWW.PROPAY.COM.
You will find tons of services on the net,if their rate is low,they will make up with fees,make sure you ask how much is chargeback fee and how long does it take to deposit the sales proceeds in your bank account and cancellation fee.
-sig file -------we eat to live,not live to eat.
Benjamin Franklin
posted on August 19, 2004 05:59:24 AM
Thanks for the input. We currently process anywhere from $2000-$3000 per month in credit cards now, but we input them manually (customer is instructed to call our toll free # w/ credit card info).
We're missing a lot of sales through our storefront by people not following through and completing their orders this way, and I can't say as I blame them. I won an eBay item the other day and had to use the same process for a seller that only accepted credit cards over the phone as payment. I thought to myself "this IS a PITA".
Our bank is offering the following to process internet sales...
$75.00 application fee, 2.51% discount rate, $7.50 statement fee/ mo,.20 transaction fee w/ minimum $15.00 per mo, aru/voice authorizations .75/$1.50, .55 debit card transaction fee, .20 capture fee for Amex, $15.00 chargeback fee.
The bank also says that we need a "payment engine". Is this the same thing as a gateway?
They recommend contacting Intellipay to set one up.
Any thoughts on those numbers? Additional recommendations?
Thanks a bunch guys!
posted on August 19, 2004 07:11:04 AM
Your bank rate sounds fair,15 dollars chargeback fee is better than most.
How long does it take to deposit your proceeds??
i have never heard of payment engine,why dont you ask your banker to explain it or direct you to someone technical who can??
If payment engine is gateway ,then you could be looking at another round of fee from the third party providing gateway.
Also your original post said you want to accept cc with your vendio and ebay stores??
I assume you want to add a shopping cart to the order page in your stores(as you are accepting them over the phone and find you are losing sales).
I dont think you can add just any shopping cart to your ebay store,i dont know about vendio.
one way to get around this is to say you accept paypal/propay and then send them an invoice for them to go to the site and pay you,it would be easier than picking up the phone and call.
-sig file -------we eat to live,not live to eat.
Benjamin Franklin
