Online credit card transactions

After something better than PayPal...

[j4mes]

Hi all,

Currently I am operating a small (very small) business, and trading through the Internet only. Because the turnover from this is small, I have been using PayPal up to now, however I am aware that using PayPal can look a little cheap/easy to fraud.

Can anyone suggest a free (or nearly free) equivilent to PayPal which will allow credit card transactions, is fairly customisable, and is very user-friendly.

Any help appreciated.

Thanks.

-- James

<Site specifics removed. See TOS [webmasterworld.com]>

[edited by: tedster at 6:47 pm (utc) on April 27, 2004]

[Corey Bryant]

You might check out [2checkout.com...] or [payquake.com...] - they might be able to support you. Also there is [mypaysystems.com...]

-Corey

[jtmoney77]

I was curious about this question as well. I use authorizenet.com. Just so you know since they dont tell you on their website, they take 2.46% out of each sales. Does not seem too bad. I also used Paypal too for another site.

I wanted to research other companies to see if anyone else has a good rate and are easy to work with.

I may not understand it, but looking at 2checkout's site, it seems as though they take out 5.5% on each sale. Is that true? Seems like a lot...

Thanks

[j4mes]

Hey, thanks jt, authorizenet.com looks really good.

Which reseller do you use, or am I missing something?

Thanks.

[Corey Bryant]

Authorizenet.com is only a gateway. You have to go thru a processor - they are actually the ones that charge you that discount rate. And most of the resellers are for US companies.

-Corey

[jtmoney77]

Our processor is innovative merchant solutions. So for sites like 2checkout.com, you dont need to find a processor? They have their own when you sign up?

[j4mes]

Ah, I see...

Thanks for all your help Corey, I've been poking 'round the links you posted and mypay looks really good.

-- James.

[jtmoney77]

Does mypaysystems.com not need a reseller too? They seem to offer a lot of good benefits. To me, anything over 3% seems high, but almost all of these seem to be at least that much. Does anyone know what Paypal charges for their fees, I cant remember?

Thanks

[Corey Bryant]

No Paysystems does not require a reseller. Not too certain if Paypal's fees vary from country to country - but you might take that into consideration.

-Corey

[jtmoney77]

It looks like paypal is around 3% in the US. I just looked at a recent sale.

[Jake25r]

Hi. I use iKobo.com. It has 3.99% fee and has a coverage of 170 countries. It's really good in my opinion. You might want to check it out at www.iKobo.com. PayPal is an alternative but it has higher fees and low coverage and since you said you run a very small business I think you should go with iKobo because they don't have setup fee, monthly fee, multi currency fee or inter country fee. Good luck!

[Corey Bryant]

What's your webiste Jake? We have been dying to see ikobo in action.

-Corey

[shahid]

You can also try cartsupport.com. I have recently added them to one of my cleint sites and it is working well. They also do not charge any setup fee and no processor required.

[digitalv]

Some of you guys have a lot to learn about payment gateways, merchant accounts, and their differences.

Authorize.Net does not take 2.x% per transaction. They don't take any percentage of any transaction, they are the gateway - they facilitate the transfer between the Internet and your merchant account. Authorize.Net accounts are purchased at a flat rate, anywhere from $500 - $1,000. If you didn't pay this money chances are your merchant bank is "leasing" access to the Gateway too you, in which you would pay anywhere from $10 - $30 a month for a few years until you "own" access to Authorize.Net.

With services like PayPal, 2Checkout, etc. the percentage you pay per transaction is based on whatever they want it to be. This is why you should stay away from those, because they are ALWAYS higher than the industry averages.

With a real merchant account (someone mentioned innovative merchant solutions - they are on the high side and aren't really that flexible with their rates, but they'll work for the purpose of this example) your rate will depend soley on YOUR CREDIT. When I first started I was paying somewhere around 2.3%. That rate dropped over time down to 1.97% - that was through Bank of Beverly Hills which was later acquired by Innovative. At the time of the acquisition, Innovative decided to jack my rate up to 2.45% plus 30 cents per transaction because they said I had more than 2% charge-backs, and MasterCard/VISA had raised their rates.

So I told Innovative to stick it and switched to Wells Fargo. With Wells Fargo, everyone starts with the same rate regardless of your credit score (unless your credit is just BAD and in those cases the rate is higher) but after 6 months you can ask for re-evaluation and they will consider adjusting your rate. The adjustment is based on credit score (weighed most heavily), charge-backs, average ticket, number of years in business, and average transaction volume. Based on those factors, I'm now paying 1.8% plus 15 cents per transaction. A couple more points and I'll be paying what Wal-Mart pays :p

Anyway, the point is that you will NEVER get a "good deal" with a processor like PayPal or 2Checkout because they're a middle-man. THEY are probably paying the same or less per transaction as I am, but they have to mark that up somewhere to turn a profit - that comes out of YOUR pocket. IMS (Innovative) is great for people who have never had a merchant account before because they have an easy approval process, but they too are not a bank and are receiving a cut of every transaction you run because they're a middle-man. The reason I went with Wells Fargo is because:

(1) THEY ARE a bank, and
(2) They support the Authorize.Net gateway, which I've been using for years.

When I switched to Wells Fargo from IMS, I didn't have to get a new authorize.Net ID I continued to use my existing one. I recommend that you at least give them a call and see what they can do for you.

[cabowabo]

You may also want to look at Echo as well.

CaboWabo

[Miklo]

Digitalv,

Unfortunately, you seem to forget that there are tons of people out there who can't get their own merchant account and are totally depending on credit card processing companies like 2CheckOut, MultiCards, Paysystems etc.

If you are an U.S. business and can get your own merchant account, it would be a lot cheaper than using a credit card processing company, although Visa/MasterCard can fine you directly if you don't comply with their rules.

[digitalv]

Why wouldn't you be able to get a real merchant account? If you were black-listed or your credit is so bad that you can't get one, it's a GOOD thing for the rest of us that you can't get one :)

This is the exact reason why it's good to get away from PayPal and those types of systems - when I see someone who only accepts payments through PayPal it tells me they're a person who couldn't get a regular merchant account - which tells me they're a person I don't want to do business with.

It's also good that MC/VISA fine people who don't comply with their rules. The rules are there for a reason - if you don't comply, in my opinion you should lose your account not just pay a fine. Of course I'm also the type of person who reads every word of every contract before I sign it, I bet a lot of people out there who have merchant accounts didn't read all of the fine print... nor did they read the terms of use when they signed up for PayPal and other services like that. That's their own stupidity.

[blaze]

Conversely, I don't do business with people unless they are big or use a 3rd party payment gateway such as PayPal or 2Checkout.

I don't want to be handing my CC information over to joe-random website.

[digitalv]

blaze,

Really? You're the first person who I've ever seen say that. It doesn't bother you that you could be giving your money to someone who was unable to get a merchant account due to fraud, criminal history, etc... but none of that stopped them from getting a PayPal account?

I feel MUCH safer putting my credit card number on a website than using PayPal. If my card number was stolen and/or I didn't get what I paid for, I have 100% protection - my bank gives me 100% of my money back and sends me a new card with a different number over night. I don't get that kind of protection with PayPal. Ever try to dispute something with them? Your entire account can be frozen for weeks - I don't have time for that.

[PayPalPB]

Just a few points of clarification:

Although PayPal is a middle-man on credit card transactions, nearly half of its payment volume is through bank transfers and stored-value which are much, much cheaper to process. This is how PayPal is able to offer 2.2% + $0.30 transaction rates. And this fee covers everything: account, gateway, risk management, etc, including American Express and Discover.

The number of merchants who select PayPal because they cannot obtain a merchant account is small. Instead, they recognize the numerous advantages: no set up fees, no application process, no monthly fees, no responsibility for handling credit card numbers, no reserves, low fees, low chargebacks, lots of customer demand, etc.

Many merchants complement their merchant accounts with PayPal to pick up incremental sales from buyers who prefer PayPal and as an easy way to accept American Express, Discover and bank transfers.

Finally, many online shoppers feel comfortable using PayPal at a store they may not be familiar with because they don't have to provide their credit card numbers out to every single merchant and because PayPal provides a seller reputation score.

[blaze]

Agreed!

This is a fundamental point and PayPalPB's comment deserves front page posting (but, because it's not in a supporter's forum, probably won't be).

The security of using PayPal is huge.

PayPal is a billion dollar company. They have the resources to invest to create a secure infrastructure that will not leak CC information.

As a purchaser I feel *very* confident that when I buy from a paypal site that I have significant recourse:

a) that the vendor is validated via paypal
b) get my money back via paypal
c) get my money back via the CC

And that my information is secure and will not be leaked by PayPal.

I do *not* have that feeling when I release the information to joe-random content website, that I am at the mercy of their lowest common demoninator security.

[digitalv]

Now this part I agree with - I said before that PayPal is great in addition to a real merchant account, and also that when given the option I'll often go with PayPal just because of how convenient it is.

But when the ONLY option I see is PayPal, I buy from somewhere else. Oh yeah, also about PayPal they do sell your information to telemarketers. I even bought a list of about 50,000 names, addresses, and phone numbers from them back in 2001 when I was running a call center. They won't give out your e-mail address though, but I bet that's only because you use it to log in and many people probably have stupid passwords that have something to do with the name of their business.

[recksul]

Using PayPal as a last resort because you can't qualify for a merchant account is preposterous. I would wager that most sellers who use PayPal do so because of the expense (initial and on-going) of the average credit card processor. It is a giant rip off.
Since PayPal stopped requiring membership, I have had very few problems.

[ebizcamp]

Hi,blaze

There are lots of complaints regarding PayPal. It's maybe because:

1) So many people use PayPal. Even given the same complaint rate, it seems more people are complaining about PayPal

2) paypal does have lots of problems.

If you search Paypal in google, you will find a website, ****.com. An interesting site.

[PayPalPB]

"PayPal sells your information to telemarketers"

This is false.

From PayPal's Privacy notice: "PayPal will not sell or rent any of your personally identifiable information to third parties."

[paypal.com...]

[grobe]

The answer to this question depends not only on the country you are in but also your payment volume. For example if you are only processing about $500 a month and have a $10/month statement fee that is equivolent to an additional 2%. If you are in the US and only processing a few hundred dollars a month look at Propay:
[propay.com...]
with a $35 annual fee, 3.5% + $.35 for each transaction

[digitalv]

"PayPal sells your information to telemarketers"
This is false.

I really don't appreciate being called a liar, you should specify that this policy is newer than the time period I'm referring to and it has not ALWAYS been PayPal's practice not to sell information to third parties. My previous post mentioned that I had bought some info from PayPal in late 2001, it was actually early 2002 when the transaction took place.

In February 2002 I purchased names, addresses, and phone numbers of PayPal subscribers FROM PAYPAL for the purpose of telemarketing an auction management solution that integrated with eBay, Amazon, and Yahoo auctions. The list was even broken down as to which accounts were businesses, personal, primarily sellers, or primarily buyers.

This information was purchased from PayPal directly, not through a third party who "harvested" PayPal users information. If I looked around, I could probably find the name of the person there I dealt with. What I'm saying is completely true - either this policy you speak of is newer than February 2002 or something more sinister is going on at PayPal. This was before the eBay acquisition, so that could explain a policy change. I would like to hear from you on this.

I understand that you're defending your company and may be correcting me about practices, but you should be honest and say that this is "no longer" PayPal's practice, not that it's never been.

[PayPalPB]

I'd be interested to know who you spoke with. It has been PayPal's policy since the beginning to not sell or rent customer information.

[mifi601]

Generally I would agree with Blaze and PayPalPB.

I would much rather give my information to PayPal ONCE than (and I have seen this so many times) all my info over an often insecure server to someJoe.com

mypaysystems btw will send your info back to the merchant openly via GET!? - I was furious when I first purchased something from a vendor using them! So much that I resubmitted the URL with varying variables about 50 times ... :)

the one reservation I have with PayPal is their lack of in depth support. it seems they have a phalanx of pseudo tech PR people trying to fend us off - I am sure PB knows what I am talking about - and you get worn down as opposed to support as a developer!

[j4mes]

So, back to my original question, can anyone suggest a free (or nearly free) equivilent to PayPal which will allow credit card transactions, is fairly customisable, and is very user-friendly?

Should I even be using PayPal? :P

Thanks.

-- James.