posted on December 23, 2005 12:21:16 PM
So... with the news of Bidpay's closing... I'm finally thinking I'll have to open an on-line credit card merchant account. Does any one have any good suggestions? I do not want to use Paypal, because I believe they are over-priced and do not give sellers enough protection for charge-backs. So, my questions are:
1) What are reasonable prices for an online merchant account? (i.e. transaction fees, percentage rates, monthly fees)
2) How risky are chargebacks (especially for international sales)? Are there steps you can take as a seller to reduce the risk?
3) How long does it take to set up, and what information is needed to create an account?
4) How easy is it for a bidder to use?
5) Is there anything else I should be concerned about?
Anyhow... I'd really appreciate any insight from the rest of you on this. I feel like I'm really getting backed into a corner. I refuse to use Paypal until they start protecting the people paying for their services... so... I'm hoping some of you might have some good ideas. Thanks for any suggestions!
posted on December 23, 2005 02:09:43 PM
I have a merchant account,my rate is around 2.2% but then they have a tiered system,depending on the card issuer,some have higher rates and some lower.
there is a statement fee,usually 10 dollars and there is a minimum dicount fee say 15 -25 dollars,which means if you dont give them enough business,they will charge you the minimum discount.
online authorisation also carries a fee-for checking address,line of credit etc ,say 10-15 cents per transaction.
Then there could be batching fee,when you submit your charges to be processed.
Then there come chargeback fee,usually 15-50 dollars,norm is around 25 dollars.
When your customer files chargeback,your merchant account provider will inform you and ask you to submit your side of the story,the final decision is with customer cc issuer.
USPS DC is not good enough,some times signature receipt is not good enough if your customer insists he did not order the item or he never receive anything from you and the signature is not his.
you are on your own-study the return codes when you submit the transaction ,check his IP address,do a reversed addr lookup,call him on the phone,call his cc issuer(most of the time they would not co-operate),but you can also try asking your merchant account provider to check for you?.
if it is an overseas transaction,you can ask him to fax you his cc statement,you can call his cc issuer if you dont mind spending long distance phone call and hope they speak english.Intl chargebacks take longer to find out,it could be 3-6 months after the transaction is completed.
There is no such thing as seller protection and your account provider will deposit proceeds into your bank account,it could also withdraw fund from your bank account.If you owe them money,they will come after you with a lawyer.
paypal is still the best and cheapest game in town.
Oh,always ask how long does it take for them to deposit the proceeds,it should be 24-48 hours .
costco offers such service,do a search and you will find many such services.the best place to start is your local bank.
/ lets all stop whining !! /
posted on December 23, 2005 04:26:28 PM
I actually decided to sign up with paypal for merchant account services, as they were actually a lot cheaper than my other company - They were fine for a while, but rates have gone up for non-swiped transactions. I also like that I have access to the money immediately, instead of waiting five days for it to be transferred into my bank account.
posted on December 23, 2005 04:32:27 PM
Same here ebayvet, Paypal's "virtual terminal" is quite a bit cheaper than the physical "swipe" terminal we used for years.
Chargebacks? Paypal is no different than any other company as far as that goes. If the customer complains about something, you're probably screwed no matter who your service provider is.
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Quidquid Latine dictum sit altum sonatur.
posted on December 24, 2005 09:21:17 AM
I have my merchant account through PayQuake (http://www.payquake.com). They have a tiered system with the costs increasing depending on how much business you do. The start-up rate (Pay for Play) is $9.95/month and it goes up from there as your business volume increases. Discount rate (transaction fees) also varies depending on the amount of business you do (mine is at 2.2% + .30 per transaction), and whether your transactions are all internet or if you do physical transactions as well. You have access to a virtual terminal and gateway (Authorize.net) at no additional charge. Chargebacks are $25 per (I have not had any in the 4 years I've had the merchant account). You can set up your terminal where you have to approve a transaction before the charge will go through, so if there is anything funny about it, you can stop it right there. Good customer service is probably the best way to head off any chargeback problems. You can do Visa,MC, Discover, American Express, Diner's Club. Through PayQuake - V/MC transactions pay into my bank account in about 5-7 days, American Express and Discover in about 2 days. Refunds - same way, and they will pull directly from the bank account you have tied to the merchant account, so make sure you have enough in there to cover any refunds.
They may also keep back a percentage of transactions in a non-interest-bearing "holding account" to cover any chargebacks. When I first got my merchant account (new Internet biz), they held back 15-20%, now it's 5%. They hold it for 6 months, then transfer to my account. I don't know if this is common procedure with merchant accounts. At the time I got my merchant account, they were just about the lowest-cost alternative around, but there are a lot more players in the field, now, and you may be able to find one with better terms.
Took about 48 hours to set up - they requested copy of DL, business license, resale license, application, URL, average total transaction, estimated # of transactions/month, bank account information, etc. I didn't have a set-up fee, but they may have one in place now.
posted on December 24, 2005 09:39:48 AM
see,they get you one way or another-taking 5-7 days to deposit the fund,holding back 5%.
banks may hold back fund if you have too many chargeback or sell high volume electronic goods.
/ lets all stop whining !! /
