Which Merchant?

ecommerce

[Microdot]

Hi, I'm going to start an online shop and need to accept credit card payments.

Which merchant do you suggest process the payments? Paypal is not an option I'm afraid.

Thanks for your help,

[Corey Bryant]

Just curious - why is Paypal not an option? Is it because it is not available in your country; are you selling items that are prohibited by its terms of service; are you afraid that using Paypal you will not be perceived as a "real merchant"; are you afraid that Paypal does not do enough scrubbing of the transaction; are you wanting the customer to stay on your website during the check out process; or you want to use another IPSP (Internet Payment Service Provider) or merchant account / electronic payment gateway?

-Corey

[louponne]

are you wanting the customer to stay on your website during the check out process

Is it possible now to camouflage the Paypal page so that apart from the URL, it will look to buyers as if they've stayed on your site?

Or are you still forced to go through the page with the "want to sign up for paypal?" part?

[wrockca]

Very Good Points about Paypal, with the new API of Paypal Pro you can really do a lot of cool things with it in combination with other gateways such as Google Checkout as well Authorize.net and many others.

Depending upon the shopping carts capabilities you want to find a merchant provider that can help your company grow as well get you the best rates.

I have used many providers in the past for my clients and found one provider in particular I like over many others for the simple fact I get personal attention for my business needs. BankCard Central is a company located in Kansas City and they provide many services to help merchants such as yourself there are others out however you need to also make sure that your provider is on the VISA list of compliant PCI vendors inorder to help protect your business. VISA and MasterCard are really working on cracking down on online stores and will continue to increase their efforts. You can listen to a great podcast about PCI compliance from Emarketing Talk Show for more information on how to protect your business.

Hope this helps

[Corey Bryant]

Is it possible now to camouflage the Paypal page so that apart from the URL, it will look to buyers as if they've stayed on your site?

Or are you still forced to go through the page with the "want to sign up for paypal?" part?

Depends on the country you are in and what solution you have signed up for.

The best way is to go to Paypal's website from your country (this way, you will sometimes be directed over to the correct website). And then see what Paypal can offer you

Paypal used to be an IPSP (Internet Payment Service Provider) / 3PP (Third Party Processor) / P2P payment type system. They have changed their model, adding new services, buying the Payflow gateway, etc.

-Corey

[Microdot]

I'm selling items that are prohibited by Paypals terms of service, (have no idea why). Otherwise I would use them.

Thanks for your help

[ispy]

Lookup any small bank, preferably one near you, and get a merchant account. You can then order credit card processing equipment to run charges manually, or if they have a virtual terminal you can run them online manually or set it up with your shopping cart on auto.

I would advise against signing up for a processing clearinghouse commonly found online (ex. authorize.net, PayPal etc), against many others advise on this board I may say. What they do is open their own merchant account with a bank and effectively resell you the processing service, maybe slightly adding increased fees or discount rate while getting some income from heavy charge volumes.

Why not advoid future potential problems an do it right the old fashioned way from the start?

[HRoth]

If Paypal won't take him as a customer because of what he's selling, a small local bank won't either. IME, they are more conservative than anything you will find online. My own bank would not take me on, even though I had been a customer for years with them and didn't have bad credit or anything. They didn't like my products. The products were not in one of their risky categories, but they were nearby, so that was enough for them. And that was a pretty good-sized bank in the south, not just a mom-and-pop local bank.

I would say check out some online merchant service companies but first check their BBB ratings and see if there are any reviews for them online. It's amazing the stuff you can find out about a merchant service provider nowadays.

[tssradio]

I echo that, most local banks are not really in the business of credit card processing anymore.

The industry is dominated by a few processors and many ISOs (independent sales organizations) that re-sell the service.

Customer service is usually handled by the ISO during the day and the processor during the night, although it is a very complicated value chain and there are all kinds of arrangements.

The most important thing to remember is that the ISO sets the price. And there are thousands of them, so they basically have no bargaining power (except for their power to confuse you! :) ). The majority of revenue that you pay the processor is passed on to the card issuing bank, this is called interchange, on average for an online merchant it is 1.84% + 0.12 / transaction[, an additional 0.095% is paid to visa and mastercard, this is called the assessment, another 0.04 is paid by the ISO to the processor to cover the cost of the network. Add it all up and 1.95% + 0.16 is the minimum bound for negotiation - see how close you can get. :)

When you are just getting started, don't worry too much about pricing, just make sure they are reputable and do not agree to a termination fee. If they insist on a termination fee, hang up and call the next guy. After you have been in business for a while and have some volume you can use the leverage to negotiate your rates down a bit.

I have been burned a few times, it is important to educate yourself so you can negotiate from a position of information parity.

[edited by: tedster at 5:22 am (utc) on Jan. 23, 2008]