Can anyone recommend a good marchant account provider?

[carlos123]

I find myself in need of being able to accept credit card payments to take my business to the next level and was just wondering if anyone could recommend a merchant account provider that they have personal experience with?

Without going into the details of why not (which I spoke about on another thread here) I do not want to use PayPal.

I want a real merchant account that will take credit card payments from clients of mine and transfer the money directly into my bank account.

Ideally I am looking for one which does not charge a monthly fee and has reasonable rates per transaction. I will be using it to have clients of mine pay for web development work so I will not be using it to sell a tangible product to them but rather a service.

Any recommendations would be most appreciated.

Thanks.

Carlos

[Lynn Terry]

The two easiest solutions are 2CheckOut.com and ClickBank.com

(those are my referral links)

If you use ClickBank, they do allow paypal payment processing - and it will automatically set you up with an affiliate program. You don't have to list the program in their Marketplace though.

2CheckOut is probably the easiest for what you want to do.

Adding: I just remembered yours is a service-based business, and ClickBank is for info products I believe so that wont work. Sorry for the confusion!

[carlos123]

Yeah I was looking at 2checkout earlier and it seemed okay. Only bad thing is the $49 up front fee which is more than what I can afford to pay just now. I was hoping to find one that did not require any up front costs even if they took it out of me on the backend.

I may have to resort to using PayPal (a great big sigh).

I have also heard recently that Amazon has something akin to PayPal called Amazon Pay which I have not yet check out thoroughly. I may check them out too.

Google checkout may also be an option though I am not sure I can sell web development services through them.

It's a bit discouraging that there seem to be so few options available for the small time operator selling services rather than a digital product like an EBook. And most all (except for PayPal) require up front costs and/or are not readily available overseas (I hope to eventually move to South America).

I wonder what the European, Canadian, or Australian web site owners use.

I'll have to do more research I guess.

Thanks for your input Lynn.

Carlos

[TrishL]

Hi Carlos

I have a fair amount of experience in the payment processing industry - and have written a number of articles aimed at helping the small business owner not get taken advantage of with their merchant accounts. (In the US, it is a unregulated industry - and I regularly see merchants who are locked into unfair agreements). Links to a few of these articles can be found on Twitter: @trishlindemood. (The two I recommend for you are "Merchant Accounts: What Should They Cost?" and "Credit Card Processing: 7 Tips to Save Money on Your Merchant Account."

However, if you are looking to accept payments via your website, you will need an internet gateway and they almost always have fixed monthly costs associated with them. For this reason, I don't think the solution I represent is the right fit for you based on what you wrote above - but do hope these two articles help you make an informed decision when you are ready to proceed.

Good luck!

[wade_watson]

I can understand your wish for an alternative to PayPal. At one time, I wished to completely avoid them as well-- but I changed my mind. Examining my own goals and priorities, I realized that my goal of making money on the web was more important than boycotting this company. PayPal has become the proverbial 600 lb gorilla that's hard to avoid-- if you want to make money on the web. I think the key to succeeding in business on the web--or anywhere-- is developing creative ways to deal with difficult or challenging people and businesses. It's easier to change yourself than the world. You can't let such negative feelings get in the way of your goals.

However, I still cuss at PayPal on a regular basis.

Wade

[Jan Ferrante]

I researched this quite extensively a long time ago when I needed something to process payments on my cart system for soapmaking ingredients.

I did have a merchant account for a few years but found it to be too expensive for a small business (fees are much higher for Canada than the US for any that I researched if available at all) so I changed over when paypal offered it's credit card processing services. There is still a cost involved but it is less.

I was concerned about how this would effect sales, at that time paypal wasn't as common as it is now even but it seems to be ok. I have to explain once in awhile that they don't need an account but I've never had anyone refuse and it is much more secure than my other system where I had to process the card numbers myself.

(heads up for online purchases, if you don't recognize the processor (paypal, clickbank etc) it is possible that the merchant is collecting the numbers and processing the payment through an online processor which means anyone may have access to your number - many people don't realize this and think it is more secure to not use the big guys when it is really quite opposite)

All in all paypal is working for me although I am still considering using 2checkout, I have an account already with them) It's easier to keep it all together though so I may not do that at all.

[carlos123]

I did have a merchant account for a few years but found it to be too expensive for a small business (fees are much higher for Canada than the US for any that I researched if available at all) so I changed over when paypal offered it's credit card processing services. There is still a cost involved but it is less.

I was concerned about how this would effect sales, ...

Hi Jan,

Thanks for your input. Yeah I've heard the idea that PayPal may affect sales bantied about here and there too. But as you seem to have found...customers don't much care whether we use a real merchant account or PayPal.

When shopping online myself, I personally could care less what payment processor is being used. What I do take into account is not the particular payment processor, that doesn't matter at all to me, but the reputation of the site I am on and whether I feel I can trust them to deliver to me what I am buying.

I think the whole business of a true merchant account being better from a reputable standpoint is just a talking point of merchant account companies that want to distinguish themselves from what PayPal offers the small business person. A talking point that really doesn't hold any water in my opinion.

Carlos

[carlos123]

I can understand your wish for an alternative to PayPal. At one time, I wished to completely avoid them as well-- but I changed my mind. Examining my own goals and priorities, I realized that my goal of making money on the web was more important than boycotting this company. PayPal has become the proverbial 600 lb gorilla that's hard to avoid-- if you want to make money on the web. I think the key to succeeding in business on the web--or anywhere-- is developing creative ways to deal with difficult or challenging people and businesses. It's easier to change yourself than the world. You can't let such negative feelings get in the way of your goals.

However, I still cuss at PayPal on a regular basis.

Wade

I understand Wade. For sure...if I can't find an alternative I will go with PayPal (I may go with Amazon Payment Systems instead). And if they want to know my social security number, my passport number, my date of birth, how tall I am, what size shoes I wear, my mother's maiden name, my dogs name, or anything else I will just have to suck it up and give it to them I guess.

I just don't feel comfortable giving out such a volume of information as they require of me to prove who I am to their utmost satisfaction. I don't trust PayPal or any other internet company for that matter with all my life's details. Especially in view of the fact that so many are routinely broken into.

As a side note they wanted all this information from me because my generic name of Carlos Gonzalez (the John Smith of the Spanish world) was apparently on a terrorist watch list such that they wanted me to jump through 20 hoops to prove who I was.

It's not only the kind of information they want which is a problem for me...it's the way they ask for it and their complete unresponsiveness to customer input. It's either their way or the hi-way and most everyone is in a pickle of having to abide by their policies no matter what. And they know it.

I mean imagine having a mechanic which is unreasonable in servicing your car. Who is almost demanding in what they require you to do just so you can get your car serviced by them.

Dealing with PayPal is like having to deal with just that one mechanic no matter what they say or do.

Not good.

I will leave no stone unturned to find an alternative that will allow me to accept credit cards. If need be I will even pay through the nose to start up with a regular merchant account. I don't think any company that treats it's customers as bad as PayPal treats some should continue to have my business.

But...like I said...if I can't reasonably find something else I will go the PayPal way until I start making enough to go somewhere else at which time I will jump ship quicker than a hungry man would be to wolf down a juicy steak .

Carlos

[carlos123]

...if you are looking to accept payments via your website, you will need an internet gateway and they almost always have fixed monthly costs associated with them. For this reason, I don't think the solution I represent is the right fit for you based on what you wrote above - but do hope these two articles help you make an informed decision when you are ready to proceed.

Thanks for the articles and the input Trish. Much appreciated.

What I don't quite understand it this. PayPal is able to have a business model where they charge no upfront fees. At all.

Yet merchant account companies continue to charge up front fees to get started with a merchant account.

Why?

I mean if PayPal can successfully do their business model and make a profit and if the industry is unregulated in the U.S. why is it that no merchant account provider has copied PayPal's business model such that they too can make a nice profit from actual sales as opposed to charging the business that wants to accept credit cards up front.

Makes absolutely no sense to me.

I mean if I was thinking of going into the merchant account business I would capitalize on this and offer free merchant account. Absolutely free. No up front payments at all. I might jack up the cost percentage wise on sales but if you think about it even a 1% increased cost on sales would eventually pay for any up front fees so that increase would more than cover the $25-50 up front cost and monthly fees I think.

Imagine that! What a business model! Beat PayPal at their own game by offering a true merchant account (with money going directly into one's account) instead of doing the usual.

Like I said I don't understand the way merchant account companies do things.

Carlos

[TrishL]

I cannot speak for all merchant account providers - however, let me see if I can shed some light for you on this...

When establishing a merchant account for a brick and mortar business - I can do so without any upfront fees to open the account. However, with an internet business - we need to set them up with an internet gateway (virtual terminal) - (i.e. authorize.net or PayTrace). These companies are NOT part of the payment processing company I represent - they are separate stand-alone companies. Therefore, they have a set of fees they charge the processing company, which then passes those costs along to the merchant.

MY cost on an internet gateway is $X amount to set up, plus $X/month per account - plus 0.05 per transaction. I NEVER mark those fixed costs up to the client, I simply pass them along at cost. I have zero control over it - but the cost is what is charged by the internet gateway provider, NOT the acquirer. So, this why the upfront cost and fixed monthly charges apply with those type of accounts.

Also, PayPal may offer an advantage in terms of upfront costs - but really the thing to consider is what is the total % of sales you end up paying with a PayPal account vs. a true merchant account over the long run. This, of course, will vary depending on your sales volume, number of transactions, and average ticket amount. For example, if you do a large number of transactions and have a low average ticket - you may find yourself paying 4 - 5% (or more) of your sales in fees with PayPal (which has a per transaction cost of 0.30, in addition to their discount rate.

So, really, the best choice will vary depending on the business in question.

Clear as mud, right?