Merchant vs. Payment Svc. Provider

[pdivi]

I am currently using PayPal to bill for a monthly content subscription service. Everything is working great, except:
1. Full PayPal account setup is still required for subscriptions, which is a drag on my signup process
2. PayPal emails my subscribers with a reminder that they are being billed each month, and provides a handy link to cancel. I don't want to be deceptive, but at the same time, I don't want to make cancellation just a click away.

Up until yesterday, I was convinced that I needed to migrate to a full-blown merchant svcs. provider, but after dealing with the crumby response times and the tricky fee structures, I'm not so sure.

So, here's my question: anyone have any suggestions for a payment services provider that 1) does not require full account setup for subscription buyers and 2) will not send monthly billing reminders to my customers?

[Corey Bryant]

There are other third party processors like Paysystems and 2CO that might be able to help you out.

The reason Paypal offers the ease of cancelling - this helps to prevent chargebacks.

If you are processing over $1,000 a month though, you might consider getting a merchant account. I think Paypal is 2.9% where a merchant account is about 2.25-2.3%. And 2CO is 5.5%

Using 2Co charges - 20 transactions at $100 each, the costs are about $119 a month. Using 2.30% & $.30 transaction rate, your charges are about $52.00 plus usually about $20 a month (gateway fee, customer service, statement fee). So you would be saving $47.00 a month.

-Corey

[pdivi]

Corey,

Great response. Thanks for the info. Economically speaking, I am probably sightly better off with a merchant account. But I really like the flexibility afforded by 3rd party processors -- no term contracts, low/no setup fees, etc. Many of these merchant account providers seem untrustworthy, so I don't like the idea of being locked-in by a contract or high sunk costs if they decide to get sneaky with me.

I have a request into 2CO for more info. on the extent to which they would contact my customers. We'll see what they say.

Thanks again for the info.

If anyone has experience with 2CO -- positive or negative -- please comment.

[Corey Bryant]

You are right - I have seen some companies offer a 2 year contract. I just hope I am around in 2 years - much less my companies. LOL

2CO had a lot of DDOS attacks last Thanksgiving. Paysystems is another third party processor as well that you might look into as well.

Just go to a few forums - and search for 2Checkout. You will hear horror stories of course. People tend to complain more rather than give someone a complement.

-Corey