Archive for the 'Merchant Accounts' Category

So you have three, or more, websites that you wish to accept credit card payments through. You want one merchant account for all of them to share. It seems easier to manage and surely cheaper. But can you do it?

No serious merchant account provider is going to establish one merchant account for multiple websites. The chargeback potential is too enormous to do so. The fact that only one website will have the proper name shown on the other two statements means that the two that don’t have their name on the customer’s statement will experience a high rate of chargebacks just from customers not recognizing the DBA on their statement. This doesn’t even take into consideration the high rate of chargebacks internet-based businesses experience anyway.

And, if you want to try to avoid that by putting the corporate name on the statement you make the problem even worse. Now all the website’s customers will not recognize the DBA on the statement. You might think you can put the corporate name prominently on each website or saying on the checkout page, “Your statement will say XYZ Corporation” will mitigate that problem. Not true. Customers associate the DBA with their purchase and having the wrong name on the statement is a proven way to get lots of chargebacks.

The bank, and the merchant, will want to have three accounts as if one experiences a high rate of chargebacks (> 1%) that account will be closed but the other two are unaffected. If the three accounts are rolled up into one, if the chargebacks from one get too high and bring the collective total over 1% they all are shut down. Obviously bad business for the merchant.

Also, that $1,000 mark that is commonly used to decide when to consider getting a true merchant vs a third party processor is a myth. Paypal is actually always lower then the average merchant account at any volume. (You can verify that by using the calculator included in the article). Their tiered pricing based on monthly volume is structured in such a way that only a better-then-average merchant account rate structure will beat it outright. The real reason why someone doing more then $1,000 per month or more would want a true merchant account is the other benefits of a true merchant offers like your own business name on your customers’ statements and a transparent checkout.

Believe it or not the process of establishing a true merchant account is usually fairly quick and easy (assuming your sales agent is knowledgeable in what they are doing). An account can be opened in as little as four hours or as long as a few days depending on when the application is submitted and the underwriting guidelines of the processing bank. The application process should never take longer then that without a clear and legitimate reason. If your application is taking two weeks to be approved and you’ve had little to no communication with your sales agent, something is wrong and you should consider canceling your application.

Establishing a third party account will vary from provider to provider as each has its own criteria and verification process. Your account can go live anywhere from immediately to several days or weeks. Also, the services made available to you may depend on verification of your business or personal information.

For planning’s sake the process setting up of a merchant account should be started two or three weeks before you expect to “go live”. This will allow for unexpected delays and testing of the account and gateway.

Shortly after its release, eBay banned Google’s new payment solution Google Checkout from being used to make payments for items purchased through their website. The reasoning eBay offered for this move is that a payment service must have a “substantial historical track record of providing safe and reliable financial and/or banking related services.”

eBay did not announce when Google Checkout would be considered an acceptable form of payment. Considering Google’s recent entry into online sales with Google Base and the addition of Google Checkout, it seems as if eBay is now trying to stave off Google as a major competitor.

Source

Looks like Google has already signed up a bunch of merchants to their new checkout system Google Checkout. They are now even offering $10 and $20 off for various stores using their new system. This includes shopping at StarBucks and CD Universe. Now you can check out Google’s new payment system and save yourself some money.

Google has officially launched its online payment system Google Checkout. You can register for it at https://checkout.google.com/.

Google Checkout offers some interesting “extras” that make it stand out a bit from its competitors. Basically, they’ve tied promoting their new checkout service with their Adwords program. With Google Checkout and Adwords you get:

• A cart icon next to your AdWords listings on Google shows that you accept Google Checkout
• For every $1 you spend at AdWords, they’ll process $10 in transactions for FREE

Google Checkout is very similar to Paypal in terms of its functionality. Current functionality include:

• Your customers are taken off of your website to Google’s website to complete the transaction
• If you get a chargeback, they’ll reimburse you 100%, “if you follow our guidelines”

As of now their is no API that allows a merchant to have a transparent checkout using their system. The checkout page also is not customizeable. That means this Google Checkout will not be the choice of ecommerce stores that wish to maintain a professional look and feel by offering a seamless checkout to their customers. However, Google Checkout would be a good complimentary service much like many stores use Paypal now.

Google Checkout’s rates are very competitive when compared to Paypal. Google Checkout charges 2.20% + 30¢ per transaction compared to Paypal’s base rate of 2.90% + 30¢ per transaction. If a Paypal user wishes to have rates equal to Google Checkout they will need to have a minimum monthly processing volume of $10,000. Only Paypal users with a monthly volume exceeding $100,000 can expect lower rates then Google Checkout currently offers.