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Thread: More on Merchant Accounts

  1. #1
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    More on Merchant Accounts

    This topic has been beaten a bunch. I thought I'd start over. Correct me if I'm wrong, but I think there are different degrees of merchants accounts that small business owners can obtain. I looked at 2checkout, worldpay, and paypal. Paypal grabs what...3% of a final sale or something like that? I think the 5.5% of 2checkout is ridiculous...I think!?

    I'm thinking that if a business has a business bank account of its own, you can use the merchant accounts from the the bank itself or go somewhere else like Sam's Club or something that that offers charges of $.19 per transaction and 1.64%...but that may not provide a GATEWAY??? My bank, National City, boasts that it has Internet processing also (not sure if that is a user-backend thing or a manual processor-bank thing...probably the latter). That hoovers around $.25 per transaction and about 2%. That may all be physical POS processing stuff, but I'm not sure...hence I am posting. Do I need a merchant account AND a gateway? Or would a good gateway provide the merchant account also? How does the bank/gateway relstionship work?

    Also, I'm trying to work with osCommerce (opensource). They say the gateways the software is compatible with are:

    2checkout.com
    authorize.net
    iPayment
    PayPal
    PSiGate
    SECPay
    TrustCommerce

    Is that all I can use? Would another free cart like phpcart be better because it supports more gateways? Also...everyone is raving over 2checkout.com. Are we sure we can't lower the overhead and find a good gateway that offers less than the outrageous 5.5% transaction fee? PayPal itself offers $.30 + 1.9-2.5% per transaction for merchants! That's half the OH just with PayPal! Anyway, if y'all have any insight, speak up...

    ERIC

    Hey Chris...what gateway do you use for CB Swords?
    Last edited by Stevens; 01-13-2005 at 12:49 AM.

  2. #2
    Administrator Chris's Avatar
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    I use authorize.net as my gateway and globalpaymentsinc.com as my merchant account provider.
    Chris Beasley - My Guide to Building a Successful Website[size=1]
    Content Sites: ABCDFGHIJKLMNOP|Forums: ABCD EF|Ecommerce: Swords Knives

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    What are the percentages, fees, monthly rates, and setup costs for those? I'm sure you have done your research...why'd you choose them?

    Chris, I see you are using osCommerce too (obviously where I got the idea), did you just need to merge osCommerce, authorize.net, and your merchant account to get up and running? I'm still trying to figure out how that relationship works...thanks for your info...

    ERIC

  4. #4
    Administrator Chris's Avatar
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    Its very easy to setup, however I did alot of editing to OSC to make it search engine friendly. I also installed some advanced authorize.net stuff to make it more secure.

    All that aside though setting it up is as easy as filling out a form. Two common issues people run into.

    1. Improper server setup of SSL.
    2. No PHP:CURL on the server (messes up advanced authorize.net connections).
    3. Server Time Zone not matching Authorize.net settings.

    I pay 2.4% + .10 per transaction with a $10 monthly fee. Setup was $25.

    I chose authorize.net because its probably the biggest such service so every cart will integrate with them, and I the other place was simply recommended.
    Chris Beasley - My Guide to Building a Successful Website[size=1]
    Content Sites: ABCDFGHIJKLMNOP|Forums: ABCD EF|Ecommerce: Swords Knives

  5. #5
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    I use 2Checkout w/OSCommerce and my own cart for oscommerce and paypal. I will be upgrading to Authorize.net once I launch another ecommerce related site. Like Chris mentioned almost every cart or eccomerce package will work wtih an authorize.net account.

  6. #6
    Site Contributor stymiee's Avatar
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    Quote Originally Posted by Stevens
    This topic has been beaten a bunch. I thought I'd start over. Correct me if I'm wrong, but I think there are different degrees of merchants accounts that small business owners can obtain. I looked at 2checkout, worldpay, and paypal. Paypal grabs what...3% of a final sale or something like that? I think the 5.5% of 2checkout is ridiculous...I think!?
    There are two kinds of merchant accounts people can get:

    1) A true merchant account - the merchant account is yours. You have to go through an application process to determine if you are an acceptable business before the account is established. If it is, your relationship is direct with the acquirer and you are bound by their terms of service and Visa and MasterCard rules. The costs for a true merchant account benefit merchants who process more then $1,000/month.

    2) A third party processor - the merchant account is theirs and they let you use it. You only need to sign up to be activated. However, since it is their account and not yours, you are bound by their terms of service which are usually more restrictive then a true merchant account (typically it takes longer to get your money and they can hold money at a whim). The costs for a third party merchant account benefit merchants who process less then $1,000/month.

    Quote Originally Posted by Stevens
    I'm thinking that if a business has a business bank account of its own, you can use the merchant accounts from the the bank itself or go somewhere else like Sam's Club or something that that offers charges of $.19 per transaction and 1.64%...but that may not provide a GATEWAY??? My bank, National City, boasts that it has Internet processing also (not sure if that is a user-backend thing or a manual processor-bank thing...probably the latter). That hoovers around $.25 per transaction and about 2%. That may all be physical POS processing stuff, but I'm not sure...hence I am posting.
    That 1.64% + 19¢ is for brick and mortar retail stores. It's simply not possible for ecommerce businesses. It also does not include a gateway. Your bank's rates sound good...if you're not rounding too much. Post what they literally are and I'll tell you if they are good or not.

    Quote Originally Posted by Stevens
    Do I need a merchant account AND a gateway? Or would a good gateway provide the merchant account also? How does the bank/gateway relstionship work?
    Yes. The merchant account allows you to accept credit cards. The gateway is your physical means to actually accept them. The gateway connects your shopping cart to your merchant account. Typically the merchant account and gateway are provided by two different companies although it is very common for the merchant account provider to have the means to establish a gateway for you as well (as a reseller typically).

    Quote Originally Posted by Stevens
    Also, I'm trying to work with osCommerce (opensource). They say the gateways the software is compatible with are:

    2checkout.com
    authorize.net
    iPayment
    PayPal
    PSiGate
    SECPay
    TrustCommerce

    Is that all I can use? Would another free cart like phpcart be better because it supports more gateways?
    OSCommerce supports a ton of gateways...which isn't important to you at all. All you need is for it to support the one you are going to use. It supports all major gateways so it's perfectly fine to use. (Remember, you're only going to use one gateway).

    Quote Originally Posted by Stevens
    Also...everyone is raving over 2checkout.com. Are we sure we can't lower the overhead and find a good gateway that offers less than the outrageous 5.5% transaction fee? PayPal itself offers $.30 + 1.9-2.5% per transaction for merchants! That's half the OH just with PayPal!
    2checkout.com is only good for you if you are a very small merchant. If you plan on doing any real volume, 2checkout.com will rape you. Period.
    Last edited by stymiee; 01-15-2005 at 10:27 AM.
    John Conde :: brainyminds
    Merchant Account Services -- Merchant Services Resources
    IT'S HERE: Integrate the Authorize.net Payment Gateway with PHP
    Everything you need to integrate Authorize.net into your website with PHP. Includes an explanation of how transactions work, validating credit cards, and the source code for free.

  7. #7
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    Perfect post stymiee...exactly what I needed to know. Any suggestions for a gateway/merchant account combo that might be good for a $1000/month processing site? I don't mind paying percentages, but monthly fees are a hastle and easy start-up is a must. Chris mentioned his two that he uses...any comments on that combo?

    Chris - I posted in the SEO section on domain setup of an eCommerce site...any ideas?

    ERIC

  8. #8
    Site Contributor stymiee's Avatar
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    Chris' rates of 2.4% + 10¢ is good. Especially if you have a low ticket price. That 10¢ transaction fee is outstanding. If he is happy with his curent provider you should get their contact info and get more information from them. Just make sure their Authnet pricing is reasonable.
    John Conde :: brainyminds
    Merchant Account Services -- Merchant Services Resources
    IT'S HERE: Integrate the Authorize.net Payment Gateway with PHP
    Everything you need to integrate Authorize.net into your website with PHP. Includes an explanation of how transactions work, validating credit cards, and the source code for free.

  9. #9
    Senior Member chromate's Avatar
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    I bow to John's knowledge of this stuff. But I know a lot of people use Worldpay very successfully. It's very easy to integrate, including with OSCommerce. As far as I remember, they charge 4.5% per transaction.

  10. #10
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    Worldpay

    We use Worldpay (and are an accredited Worldpay Partner, so I guess could be biased!). Quite a few of our customers also use Worldpay though as well.

    Some observations :-

    * It is expensive to setup (just over £300 inc Y1 fees), but setup is very efficient and support is excellent

    * It is middle-of-the-road as far as ongoing costs go. You get charged 4.5%. You also pay (IIRC) a 6p per transaction 'anti fraud check' charge. If you are processing Debit cards, you don't pay a percentage but you do pay 50p per payment.

    * It has some nice extra features:-

    If you want to accept phone orders, you can sign up for something called WorldAccess which gives you a 'virtual swipecard machine' on your web browser. This way you can type card numbers in that people have told you on the phone and process payments that way. Cost - one off £100.

    If you want to process subscription type payments (i.e. once a month same amount) you can sign up for FuturePay, which again costs £100 once off to setup. You can structure initial and ongoing monthly payments etc.

    And their support is probably the best (having dealt in depth with NetBanx, and loosely with Paypal, SecPay and another whose name I forget)... They always are a pleasure to deal with.

    We are an accredited partner, so we earn commission for each account sold. I won't post our sign-up link, but if anybody does want to look more closely at Worldpay as an option do let me know and I'm happy to chat through the positives and negatives of it..

    A.

  11. #11
    Administrator Chris's Avatar
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    I might be wrong about the per transaction fee. I just guessed.
    Chris Beasley - My Guide to Building a Successful Website[size=1]
    Content Sites: ABCDFGHIJKLMNOP|Forums: ABCD EF|Ecommerce: Swords Knives

  12. #12
    Administrator Chris's Avatar
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    Eric, I have set your usergroup back to "awaiting email confirmation" as your email is broken and so my inbox gets flooded with all the returned emails the forum is trying to send you.
    Chris Beasley - My Guide to Building a Successful Website[size=1]
    Content Sites: ABCDFGHIJKLMNOP|Forums: ABCD EF|Ecommerce: Swords Knives

  13. #13
    Registered Will's Avatar
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    It seems like worldpay has high set up and monthly fees, doesn’t it?

  14. #14
    Site Contributor stymiee's Avatar
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    They do but for a lot of Non-US companies that the best choice.
    John Conde :: brainyminds
    Merchant Account Services -- Merchant Services Resources
    IT'S HERE: Integrate the Authorize.net Payment Gateway with PHP
    Everything you need to integrate Authorize.net into your website with PHP. Includes an explanation of how transactions work, validating credit cards, and the source code for free.

  15. #15
    Registered Will's Avatar
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    Yes, I also heard good feedback about this company. However to my mind their fees are too high for the small and new merchants.
    As for me I would look for something cheaper.

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