View Full Version : Are ya Gettin' Paid ? ....... and How ?
02-02-2004, 02:28 PM
One of the most difficult aspects of running an ecommerce website and even just building revenue online is finding a suitable payment method.
There's merchant banks / gateways, echeques
Who to choose or what to use, is one of the most common questions for those of you considering opening up an online shop and some of you may have made the mistake of utilizing a payment method that for whatever didn't work for you.
How do you accept payments online ?
Who do you use and why ? Pros and Cons ...
Did you have a hard time getting started?
Any advice to newbies entering the wonderful world of ecommerce? If so, please post your tips.
Had a bad experience with a company? I don't want to turn this into a rippin' / slander contest. All businesses have a right to earn a living, so let's not trash them. Companies / people do make mistakes.
Once feedback has come in, I will post a sticky to help newbies cut through the clutter.
Please abide by the rules > no self-promotion
02-02-2004, 05:37 PM
About a year ago, I designed a website for my friend to sell his pottery on. It is located at www.harvestpottery.com. I had never done a website that accepted credit cards before. After much research we narrowed it down to 2 choices: PayPal or 2checkout.com. I didn't like the idea of forcing customers to sign up for a middle man processor like PayPal, I was afraid we would lose some people who would've otherwise bought something. So we went with 2checkout.com who accepts credit cards directly. They charge a very reasonable amount and it was very easy to setup. This is the only merchant I have dealt with so far, but I am very pleased with them.
02-02-2004, 06:53 PM
I just went through this. I started with my own Verisign account and a merchant account $500 later I swithched to Paysystems! Much happier with paysystems the look is more professional. Check out my implementation www.metrolot.com click on the sign up page. If you want to be taken seriosly don't use PayPal!
02-02-2004, 07:18 PM
This is the thing I keep trying to beat into client's brains. Paypal does what is good for Paypal. Paypal can & will (and has) changed things without notice which has caused carts utilizing their IPN service to no longer work.
I still can't get everyone to switch from Paypal though. LOL
My merchant bank is EPS, their online solution (http://eps-na.com) works with popular cart solutions like osCommerce & cpCommerce. I like it and they have good customer service (reasonably anyhow).
I've also used Securepay (http://securepay.com). Didn't like their customer service, they're still billing me even though I cancelled months ago. I've been going round and round with them. I'm going to have to close my checking account and open a new one...grrr. They also work with osCommerce & cpCommerce.
Also have used Plug-n-Pay (http://plugnpay.com). Horrendous customer service. Charged extra for recurring billing, a must for my hosting biz. Even when the recurring was paid for (by the guy my account was through) they cancelled it on my account. Very frustrating, and did not discontinue billing once account was cancelled. Had to close my checking account. Worked with osCommerce.
I always prefer to use an alternate cart program, instead of the carts that "come with" the payment systems. It makes it much easier if you have to change processors. :)
02-02-2004, 07:27 PM
If you want to be taken seriosly don't use PayPal!
I don't agree with this at all. At least 95% of my clients pay me by PayPal. I don't force a client to sign up if they don't have it...I use ProPay in that case. But more and more sites are offering PayPal as a form of payment. I prefer to be paid with PayPal because I have instant access to the money with my PayPal debit card. And I watch for online stores that accept PayPal as a form of payment.
I honestly don't believe that offering PayPal as a forom of payment for your e-commerce sites causes people to not take you seriously. Now e-commerce sites that offer me nothing more than a form to submit where I have to manually enter the products I want to buy into said form...THOSE I don't take seriously because obviously they don't take their business seriously enough to invest in even one of the many free shopping carts available out there. But the form of payment a site accepts has no influence on how serious I take them.
I like PayPal and ProPay because I can't see investing that much money into a payment processor that in some months I may not even use. I used to have a merchant account and I was paying out so much in fees that it just wasn't worth it for me. Should my volume of cc payments get high enough, I'll consider going back to a regular merchant account. In the meantime, PayPal and ProPay do me just fine.
02-02-2004, 08:23 PM
I think PayPal is an OK solution to start a business. But when you start growing, you feel that it doesnít fulfill your needs any more. Especially if you have customers overseas. PayPal has a pretty long list of countries they work with. But it most cases it is a fiction, because to open a PayPal account, for example a resident of Israel must have an account at an AMERICAN bank.
2checkout.com is very easy to set up. Good things about them are that they donít have any monthly and annual fees. But the percentage they charge per transaction is pretty high. Two other things I donít like about them are (1) they transfer money to your bank account only twice a month and often postpone the transfer, and (2) recently it seems they have TOO MANY customers so their server is too busy. For the last couple months we had several issues when customers were not able to complete a purchase because the 2checkout page never loaded.
So, we started out with PayPal, went through 2checkout, and ended up with Authorize.net. We pay $49 annual fee, but their percentage is lower than 2checkout and they transfer money to our bank immediately after each transaction. The only negative thing I can tell about them is that it takes a lot of paperwork to open an account with them. Or maybe is it a good thing???
02-02-2004, 08:35 PM
Started out with PayPal and was very satisfied.
Once business increased and I had a few customers complain about using PayPal, I got a merchant account. I use Total Merchant Services (2.2% with $0.25 per transaction fee) and Authorize Net. Very happy with them both. Total Merchant Services had limited me to $5000 a month in transactions, but I blew through that in first 10 days after I set the system up in November, and I blew through it again in the first 4 days of December. I just called and let them know what was going on and they were ok with it. They were contemplating holding back extra funds in reserve, but never did. I might mention, excellent credit has a lot to do with how merchant accounts treat you or if you can even get a merchant account.
Fees are not killers if you have the business. I just read that CostCo has merchant accounts with even lower fees. I may check into this in the future.
Since my website is all html and I build and maintain it, I wanted an easy to use html shopping cart, like PayPal's. I was familiar with PayPal's cart also. I hooked up with CoolCart and I've been pretty pleased with it (www.coolcart.com). Simple html code. Cost $10 a month for 200 transactions or less. The CoolCart is interfaced directly with Authorizenet and PayPal so I can use both services or customers can check a box to print out their order and send it with Check or Money order or call with their credit card information. I get about 10% of my business still with PayPal.
I might note that both Authorizenet and PayPal have the security certificates necessary to be a safe and secure website so you do not have to pay for these yourself. I did get a lot people using my shopping cart to test the validity of credit cards, i.e. seeing if a stolen number would be accepted. I use the address verification system in authorizenet and none ever got through, but, at times 70 or more trys a day to pass a fraudulent credit card were sent through my shopping cart. I asked CoolCart to do something about it and I assume they did since the trying stopped. Out of approximately 600 transactions in December and January, only two were fraudulent. I lost a small amount on the first, but caught the second before the product was ever sent.
Anyway that's my story, I can't complain about any of the services I've got. Again, I'll mention, you need to have good credit in order to get a merchant account. You don't need a merchant account though if you are only doing a $1000 or so worth of transactions a month. Better just to stick to PayPal and work first on increasing your business through advertising and SEO'ing. No use worrying about a Merchant Account if you don't have the business. If you don't have the credit rating, you'll be stuck using those services that charge 5%-15% of each transaction total plus $0.45 per transaction. That's a lot of money, those services are taking a risk on you. I was doing $8K a month in business through PayPal when I got the merchant account and I was overdue to get one.
02-02-2004, 08:39 PM
I have had a lot of customer confusion when I offered both PayPal and a real-time shopping cart with a payment gateway on an e-commerce site. I have also heard a lot of problems caused by PayPal. I still offer it on my site, but I will probably discontinue it from lack of use.
PayPal offers the ability for visitors to use credit cards on your site, even if you don't have a merchant account. However, if at all possible, I recommend that the client set up a merchant account and accept credit cards directly. The reasons are less problems and many visitors don't have PayPal and it's just another obstacle.
For those that don't want to pay for real-time processing of credit cards, there are some free alternatives. One is Mal's E-commerce. I have used it and have had clients use it without any trouble. It is transparent to the visitor. If you want to see it in action, visit my site here:
http://www.drtandem.com/Web-Site-Critique.htm Click on Order at the bottom of the page and use the ficticious credit card number: 4111 1111 1111 1111 and an expiration date of anything beyond the current month and year. This will allow you to see it all the way through the process as a visitor would.
Mal's sends an e-mail to the website or whomever you designate to let them know that an order has been received. You log into your secure account at Mal's and retrieve the visitor's information. You would then process their credit card purchase as you would on a virtual terminal or by phone. It's not as easy as a real-time purchase for you, but it's the same for the visitor. Don't forget, it's free. You can also upgrade to a real-time account for a small monthly fee.
Free carts are great for a small client that doesn't want to invest a lot of money. Plus, you don't have to spend a lot of time setting up a gateway.
02-02-2004, 08:42 PM
You don't necessarily have to have good credit to get a merchant account. I got one within a year of a personal bankruptcy (hubby wasn't making very smart $$ choices). All I had to do was show that the bankruptcy was discharged.
I pay the same rate quoted above. Better with AMEX (I love AMEX!)
Granted, really horrible, horrible credit can prevent you from getting it, but many merchant account places will work with you to get you into a terminal. They may rent it to you, instead of leasing it to you through a leasing company.
02-03-2004, 01:45 AM
Thanks for everyone's replies, so far
I'll start building the sticky very soon.
02-03-2004, 03:29 AM
The whole thing comes down to how much $$ you are going to be processing through your site and how your customers perceive your service.
I have a client where we use Verisign for an SSL certificate and they also enable us to manage our credit card transactions through their PayFlowPro Manager. On top of that we have a merchant account through Merchant e-Solutions (http://merchante-solutions.com/). They use Vital as the processor and we have had very good service from all so far. On the one hand, we pay a lot of money for all these services, both directly and per transaction. And for those fees, we know we can call them any time day or night, holiday or not and there will be someone to solve any issues we may have. They also have a very thorough SDK for integrating our custom-built shopping cart with their autorization services. It's a very professional operation all things considered.
I also have another client that doesn't do the kind of sales volume that warrants a merchant account and SSL cert. So we hooked him up with PayPal. He hasn't had one sale go through the site yet, but I think this is due more to the business model and less about PayPal.
I use PayPal all the time to pay for software licenses and make donations. It's one of the easiest ways for someone to start selling things through their web site. I have sold some things on Ebay and PayPal was a great solution for accepting payment.
The advice I have is to start with what makes the most sense for your business. If you are starting small then use a service like PayPal or 2checkout. Then if things pick up and you start to see yourself losing money you may want to think about doing more of it yourself. The difference is in the volume. The small service will take a flat percentage (usually 3% or more) where the big boys will more often take a smaller flat percentage (about 2% or better if you are lucky or have the volume to negotiate a lower fee) and a per transaction fee (20 to 50 cents in most cases). You really have to do your homework on this topic as there are many facets to accepting credit cards online. Most of the time there are no less than three separate services involved and each one wants its share of the pie. Be careful and don't be afraid to shop around or negotiate!
02-03-2004, 05:30 AM
Although it sounds obvious..ALWAYS read the small print on any contract you sign with Payment Processing companies. If you don't you may find you are locked in for 12 months...
Some of their rules are incredible...One (major player) even suggested to client of mine that they had to change the Look and Feel of their site to be accepted !!!
Final point always check their support services...some only offer office hours support e.g. 9-5 ...great for WORLDWIDE services eh ?
02-03-2004, 06:59 AM
For my own services I only accept PayPal. This is ideal for me because I am able to set up "subscriptions" for monthly services I offer such as Maintenance and hosting. I have found that as long as you are familar with how paypal works you should not have any problems. I like the features that allow me to view weekly and monthly statements. Since PayPal is so widely used and recognized I have had no problems with people wanting to use it.
For my clients I recommend 3 different solutions depending on their individual needs.
I always recommend they acquire a PayPal account since it can be used in one way or another in most shopping cart systems. I only recommend PayPal for checkout if the client just has a few items. For a full service shopping cart system I have found securenetshop.com to be the easiest to get started and manage. Securenetshop.com offers several payment methods in addition to credit cards which are optional in settings. Since signup includes the cart and merchant account it helps the client get everything going faster. For clients who have a limited budget but want the shopping cart options and data base I suggest ccnow.com. this is not realtime, however it is affordable for most people.
Through my clients we have tried several different solutions, I have found the above to be effective.
Someone above stated paypal was not professional. I have to disagree. PayPal is one of the most used solutions and available on a large number of sites. Since Ebay now owns paypal, exposure and recognition is even more so.
I work with clients who have small businesses and limited budgets. These solutions have helped my clients create an affordable online business. Keeping clints expenses down helps their businesses to remain online and keeps them as my clients.
02-03-2004, 07:51 AM
PayPal Support Club. Review and helpful links, coding examples, warnings, other shopping cart links, etc. PayPal is a on-link banking system that allows website owners to integrate shopping cart technology into their site. Find out more, includes links to helpful site about PayPal shopping cart technology.
The Good, The Bad, The Crashing...
02-03-2004, 08:18 AM
I have found that depending on the business model and projected sales, it is wise to start simple. 2checkout.com is what we use to bill clients, establish recurring billing and so on. It also allows us to just log in, establish an "ala cart" billing system, and send it to our client.
Now I do have issues with the bi-monthly pay scheme, but basically that is how 2checkout.com makes their money. Holding payments allows them to collect interest on the money.
Our company does not have high through put, so a lower end payment solution works best. Yes, the per-payment fee is a little higher then most, but we have that built in to our operating margin. A merchant account would cost us more money in the long run, because we deal with a low transaction count.
The questions you must ask are the following:
1. How many "transactions" am I looking at? Is there a per transaction fee.
2. Cost per "transaction"? How much will they charge me for the cost of the transaction?
3. Cost of intergration?What is the learning curve involved. How difficult is it to intergrate the supplied shopping cart, or use another. Do I have to pay a programmer to come in and do it?
4. Dependability? System down time? Lost transactions?
I am new to this forum and hopefully a the exchange of information will be beneficial to all.
02-03-2004, 08:54 AM
I started out using paymnetech along with quickbooks to do my invoicing. Had to double enter all the information to process credit card with paymentech(bank one). Then when I had trouble with the software not opening correctly I got the run around- sent to several departments and if you have ever been on hold with customer service only to be repeately transferred????? well..... Then I was told I did not have the service agreement and it would cost me losts of coffee beans to get it. I was down about three days with this run around so I set it all up through my quickbooks and have been very happy with the results. It also stores the info securely and remembers the customers info the next time for those repeat customers.
02-03-2004, 11:00 AM
There have been many positive comments about PayPal and some misinformation, as well. PayPal is not an on-line banking system, at least in the U.S. As a matter of fact, they are being sued for trying to act like a bank without being a bank. Banks are regulated by the federal government. As such, they also offer the banking customer some protections.
I have a PayPal account and I have used them. Mostly, for eBay transactions, both buying and selling. I have not had a problem, but I have not used them recently. I have friends that have had many problems with them that have cost them quite a bit of money. Apparently, when a customer causes a charge-back, PayPal simply goes back into your account and takes the money you earned without much of an investigation.
If you are going to use PayPal, I recommend that you set up a separate checking account just for that purpose and keep the balance to a bare minimum at all times. Also, it never hurts to do a search with the word "sucks" to see what others think.
02-03-2004, 12:19 PM
Down with Paypal. I'll tell you why later.
I use 2Checkout.com. They charge $49 to sign up per year, and %5 of your sales. That's seems like a lot to give away until you see that you may not be making as much money as you thought, right out of the gate. Having a merchant account makes you have to pay even when you're not earning.
Later on, I might drop 2Checkout and get a real merchant account, but the revenue has to be there for this option to be viable and profitable.
Paypal just plain sucks. It may be the easy way out for most people who don't want the hassle of dealing with CGIs and setting up all sorts of code, or those who just aren't comfortable or knowledgeable enough about these things. But in the end, as someone else said, "Paypal does what's good for paypal."
So why do I refuse to use Paypal? I used to have a Paypal account for ebay auction payments. I had a problem with them when my account was broken into (some hacker from Thailand, supposedly, according to Paypal tech support). The perpetrator tried to usurp $2000+ from my bank account, which was linked to Paypal. Luckily I caught it and told my bank who did their own investigation and made sure that no transaction went through. It took 2 weeks for my bank account to be reimbursed, but until then I had to take a loan out and apprise my workplace that I may need an advance.
What did Paypal do? Nothing. Not one blasted thing. "The guy's in Thailand, we have no jurisdiction. Are you sure you didn't give your password to anyone?"
"Aren't you going to investigate this?" I asked.
"Investigate what?" said the rep. "There's nothing we can do about it."
"What about the fact that someone broke into your supposedly secure systems? You're not even interested in seeing this through so other people don't have this happen to them?"
"Our systems are pretty secure. Not much we can do."
They didn't even pretend to investigate. That made me realize that this is somethig that happens quite often, and the fact that the rep didn't bat an eye means he knows this happens a lot, and to say that Paypal will investigate is worthless.
Well, that did it. I closed that damn account quicker than you could say Peter Rabbit.
So, with Paypal, you run a risk. A big risk.
Find other ways. Forget Paypal.
02-03-2004, 02:56 PM
Down with Paypal. I'll tell you why later.
I use 2Checkout.com. They charge $49 to sign up per year, and %5 of your sales. That's seems like a lot to give away...
I fully agree on both points: Paypal sucks and 5% is a lot to give away (as is 3.95%+ with PaySystems). I guess I am in the minority here because my monthly "fixed" fees are no big deal. My merchant service provider is Wells Fargo and my gateway is $$$ on the Net. I have a monthly minimum volume with Wells that I easily make (I think it is something like $200 minimum in total sales per month and they won't ding you with a maintenance fee). The gateway fee is a $24.95 per month minimum that I have yet to exceed. My discount rate is 2.35% + $0.30. My only other fee is my annual SSL cert (divide this annual fee by twelve comes out to about $10 per month). My total monthly fees including SSL and my discount rate is much lower than using PayPal (again, yuck), PaySystems or 2CheckOut.
It seems that the primary concern for most everyone participating in this thread is the fixed monthly fees. I always thought my daily average of one or two transactions was low compared to industry standards -- after reading this thread it sounds high?
cyanide, it may be interesting to have a poll of monthly transaction or dollar volume that the average e-commerce web site of your users.
02-03-2004, 03:17 PM
Everyone's situation is different. Anyway, I've taken my own advice and I have removed PayPal from my site as a payment option. Too risky.
02-13-2004, 10:09 AM
Some people don't understand the difference between using a gateway directly and using a credit card processing company (or payment processing company). A credit card processing company is not only charging you for the use of the gateway. There is a whole service and backbone office involved. All payment related issues are done by the credit card processing companies and in case of non delivery by the merchant or a chargeback issued by the customer, 9 out of 10 times, the credit card processing company will act as an intermediair to solve these kinds of issues. At least, that is how we do it. That is why the fee is larger than connecting directly through a gateway with your own merchant account. Most merchants that are just starting out or have bad credit, or even established companies outside the US, need credit card processing companies such as ourselves, to survive.
02-13-2004, 08:04 PM
Setting up a "total" payment option plan can be difficult. I have a client in which the owner not only has a local retail store with a POS system and CC processor, but also has a website AND sells on eBay. The website started out with PayPal, but emails asking for other payment options started coming in. OK, in order to accomplish all options I had to come up with a single shopping cart that could integrate with an established "static" site, and could integrate with PayPal, Authorize.net, and offer offline processing over the telephone. I just today finally was able to pull everything together to make that happen. By the way the cart I chose was ClickCartPro. It takes a lot of work to integrate a cart into an established site, but offering consumers every available payment option has many benefits.
02-21-2004, 06:01 PM
As a new member of this forum I believe I can add some useful information. I formed EmerchantsGroup.com in 2002 initally choosing credit card processing as an initial starting point.
Credit card processors play a revenue game of 'hide-the-ball' when it comes to card processing. Sometimes the revenue for them is hidden in the form of chargebacks, statement fees, monthly fees, float time (delay of funding), per-transaction fee, batch fees, AVS fees, etc. The key to obtaining a better program I determined is collective volume."
(mode edit: no self-promotion, please)