Thanks for your gracious offer to review what the "free" merchant account provider wants to provide to me Trish. I did my due diligence and made several calls and spoke to two of their reps to confirm what they were telling me.
Here's their "free" deal.
There are absolutely no up-front costs involved whatsoever in starting a merchant account with them. None. Zippo...Nada.
So that's great...what I was looking for at least with respect to no up-front costs.
Now for the cost part...and you know there always has to be a cost part .
Their rates are comparable to PayPal and others on transactions so okay there (dont' remember off the top what they are but I can get them if you like).
They charge a monthly fee of $29 per month. That fee includes all fees associated with the account with the exception of an extra fee that kicks in if one does not sell at least $500 of product per month. That extra fee is $10 but I think it is a graduated fee in that the full $10 would only be charged if one sold nothing in any one month.
So...in an absolute worst case scenario (if I went vacationing in the Caribbean like some of the rest of you here LOL) for a month I would pay $39 that month.
A bit more than normal but...not too bad.
If I sign up and cancel within 30 days and have had no transactions yet...I pay nothing.
If I sign up and cancel after a transaction and within 30 days I pay a cancellation fee of $30.
If I sign up and cancel after 30 days I will owe $30 cancellation fee + the $29 monthly fee on top of that.
Personally I cannot think of a reason to cancel unless they actually do not enable me to process credit card payments through my web site in which case I would have good cause to cancel and could probably convince them to waive some of these cancellation fee consequences due to their inability to provide me what they said they would. Or at least I hope I could convince them of that .
They are connected with Wells Fargo the bank. One of the banks that I have an account at.
I can connect a personal account to the merchant account with no problem since I am doing business under my real name "Carlos Gonzalez" and just adding the word "Consulting" to it such that I don't legally need to do business under a DBA. I can just set up a personal account to receive whatever monies are given to me (which I will then withdraw into the shoe box I keep under my bed for safekeeping ).
I think that's about it.
If anyone has any input on any of the above that they would care to give me I would be most appreciative. Is it a good deal? Is there anything for me watch out for? Any other questions I should ask them or information I should find out about?
If this account works it will allow me to stay away from the likes of PayPal. Although I said yesterday that I would use PayPal if I had no choice, aside from the fact that I seem to have a choice today, I also re-read some of the reasons to not use PayPal at the various web sites I linked to on this thread...and was turned off to PayPal all over again. Some of the horror stories one reads about PayPal are just horrendous...not something I want to mess with if I can help it.
Make sure the cancellation fees are spelled out clearly in writing on the contract. Normally, merchant account contracts run from 24 - 48 months - so make sure the $29 per month they are quoting is NOT per remaining months on the contract (it usually is).
I would push them to waive the monthly minimum fee ($10) - that's not terrible, $25 is more the norm - BUT it is a made up charge IMO - I NEVER charge my merchants this.
What is the discount rate (the % rate of each sale?) Per transaction fee? any statement fee? etc....
Just got off the phone with them again and here are some follow up details.
Their discount rate is 2.39%.
Their transaction fee is .25 cents per transaction (regardless of amount).
They have no seperate statement fee or gateway fee. It's all included in the $29 per month fee.
I just got their merchant agreement in my inbox and will review it with a fine tooth comb. I'll get back to you on whether the cancellation fee is based on $29 per month for however long the contract is (12 months or whatever) or just on a month-to-month basis.
Thanks to your input Trish I sounded so knowledgeable on the phone with them that I think I may have sounded like a competitor asking probing questions LOL.
Don't feel like you have to give me additional input on this Trish but if you (or anyone else) has any I am certainly all ears .
The final thing to ask is - are there any additional downgrade fees - for corporate cards, world cards, etc... 2.39% is a decent rate for internet transactions - if that is a flat fee they will guarantee across the board for ALL transactions (guarantee in writing - can you tell I don't trust most processors? - you are getting a pretty good deal.
However, if they reserve the right to downgrade certain transactions - find out, in writing, what those downgrade surcharges will be. 3.05% is about as high as I would go.
I read their agreement and went over it with a fine tooth comb and have decided to not get a merchant account with this company. While they appear on the surface to be all friendly and reasonable (at least verbally over the phone) their agreement says otherwise. It is a typical money-grubbing agreement from a company whose God is money and who want to cover their butts in any way, shape, or form even if it leaves the Merchant holding the bag so to speak.
The term of the contract is 6 months. While I was told that if I cancelled after 30 days all I would owe is $30+$29 by the reps the truth is I would $180.00 (6 months x $29 per month). Deceptive if you ask me.
Furthermore there are all kinds of charges spelled out in the agreement that are nowhere to be found on their web site or that are verbally laid out by it's reps or just contradicted by their reps verbally (which holds no water legally speaking compared to the agreement in question).
Not only that but if there is any dispute between the Merchant and the Merchant Account provider they expect to be given, through the agreement, full access to whatever bank accounts one has anywhere in order to satisfy their end of any dispute! Ridiculous (and all the more reason to keep money in a my shoe box ).
It's back to Amazon Payment Systems or even PayPal. I can't believe these merchant account companies having such agreements are still in business. One of the most blatently one-sided, self-serving, agreements I've ever read.
Oh well...thanks for your input you all. I'm going to go back to focusing on local San Diego businesses for now where I can just pick up a check from them in person.
What about accepting checks online? Apparently accepting checks is very doable and much, much cheaper than accepting credit cards. While accepting checks is a bit more inconvenient for customers my services are such that I am not selling a spur of the moment product that might be influenced initially by whether a person has their check book with them or not. Also...I generally do not get money up front so the decision to use my services or not is initially a low barrier decision money wise.
After the work is done I doubt anyone will have a problem going to find their checkbook and entering the proper information into an online interface. More persons have personal checking accounts than credit cards I think.
Also there are apparently no charge backs with checks.
What do you all think of accepting checks for web development services? Anybody see any problems with this?
I am also keeping my eyes open to the possibility of moving to South America and accepting payments from there. I think checks might be more doable than credit cards for that...given that they are processed by ACH and not private companies like Visa and Mastercard...though I am not sure about that.
Does anyone here accept check payments? Have they been more popular than credit cards? Have you had an easier time with check payments than credit cards?
there's also ProPay - a merchant account that is very similar to PayPal but is a credit card merchant account; and which I've used myself for years, but it does not connect w/ many shopping cart systems for seamless processing, so may not be for everyone.
One free shopping cart system that works with just about any payment processor out there is http://mals-e.com It's a nice system that I've used a lot for clients. I mention this only because as your business grows, you will need a shopping cart at some point - and if upfront costs are a concern, Mals is free.
I know it has been mentioned a couple of times, but can anyone speak about Google's checkout? I have it, but have not used it. Does anyone have scary stories or anything?
Thanks for the input Tracy but it doesn't seem like you read much of this thread (understandable ). I am looking to start accepting credit cards through my site for NO upfront costs. ProPay sounds good but they require a $59 up front cost. Plus their transaction fees are 3.5% + .35 cents per transaction. I mean they do sound okay if one is inclined like me to leave no stone unturned in trying to not use PayPal. Cheaper than 2checkout.
By the way your links to both ProPay and 2Checkout went to the same place (I had to look up ProPay on my own).
Honestly...I have a hard time understanding how businesses that charge so much more than PayPal stay in business. I mean aside from my lack of desire to use PayPal for any number of great reasons...most people are not aware of those reasons and think PayPal is great...these other services just don't cut it since PayPal offers the same thing for much less.
I've been checking Google Checkout but trying to get info from them is about as hard as having Google respond to any qeustions you might have for them. Almost impossible to get out of them...at least so far.
I am leaning strongly in the direction of just accepting checks and only checks since paying me by check is something that every person with a checking account can do and when push comes to shove it's really not more difficult than entering one's account number and a transit number into an online screen than entering a credit card number.
For the kind of product I offer, web development services, accepting check payments only is not likely to cause me to lose any potential customers. No up front payments are usually needed and the payments are usually for much more than for a simple ebook or mini-report or subscription web site. Having a customer find their check book to get the proper numbers off it is the least of my concerns with respect to getting paid.
A lot cheaper than accepting credit cards and no chargeback concerns.
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