Advertiser Payment Methods

Is a merchant account necessary?

[chipdouglas]

(Apologize if such a thread already exists; I could only find peripherally related threads.)

One of the ways my site generates revenue is by selling ad space. When I explained my site concept to the web developer, he got the ball rolling by having me set up a merchant account to accept payment from advertisers. The site is not yet live but the merchant is costing me $16+/mo as a monthly minimum.

I hope to attract advertisers of all (related) types, but I don't want to turn away the big reputable ones by not offering the merchant option.

Does anybody with a similar model to mine have any experience with accepting payments? I've heard people say PayPal works fine. Has this been anyone's experience? Do I really need a merchant account to accept funds from advertisers? Any experience, advice, etc.?

[ken_b]

Paypal can apparently have limits. When I talked to them they said that if the customer (ad buyer) had spent too much of a monthly limit the transaction wouldn't go through. I think the amount was around $2,000.00US if I recall right.

They were supposed to send me more info, but didn't.

I just ask for a check. That takes longer to gat paid and might delay your sales if you insist on prepayment.

Being able to take CC could speed things up on a prepaid basis.

But you have to be sure to account for the processing fees in your pricing.

[Elsmarc]

I give the option of paying by direct deposit (ACH) or a check (the two payment options are on my invoices). I invoice by email in a pdf attachment. I can not see why paypal or a merchant account would be necessary. I've never even been asked if I accept credit cards for advertisements. I do take credit cards for merchandise sales. I sell ads directly to companies in 3 month minimum periods for a fixed price (presence advertising) and I bill in the 3rd month of the 3 month term. I have never not been paid, and I'm always paid on time (30 days net).

[chipdouglas]

I give the option of paying by direct deposit (ACH) or a check (the two payment options are on my invoices). I invoice by email in a pdf attachment. I can not see why paypal or a merchant account would be necessary.

Elsmarc -- what was required to set up the direct deposit? I would imagine it's something with your bank? Any direction on the who/what/etc.?

FWIW, my merchant account, which I have yet to use, has been going up in price every month -- first it was $6, then $16, now it's almost $20... in 3 months!

Is the consensus then that merchant accounts are superfluous and unnecessary? I'd like to avoid monthly and quisque charges if possible -- no sense in tolerating needless overhead.

[merchantmaverick]

chipdouglas,

I always recommend that a merchant have a high enough portion of their sales coming from credit cards, to warrant the merchant account in the first place. Otherwise, you'll end up paying those fees for no reason. Usually, the best way to do that is to setup with a third-party payment processor (i.e. Paypal), wait for a few months, then see how many of your customers are using CC's. But regardless, in your case, I don't really see the need for one, unless you're processing a high number of adverts on your site.

The incremental increase in fees could be one of a number of things, but until you scrutinize your statement, you won't really know why.

I'm also willing to bet that your merchant service provider has an "early-termination fee" which usually sits around $100-$300, and that SUCKS!

Best of luck to you. :)

[edited by: tedster at 4:26 am (utc) on Oct. 10, 2009]
[edit reason] no personal urls, please [/edit]

[oby_one]

paypal is the best way when you selling ads without third party,.. it means just between you and advertiser who wanna put their ads on your web...