BankOfAmerica's merchant account

Does someone has an experience with them?

[oagady]

Hi everybody,

I am new to this forum. This is just my second post here and the question is about merchant accounts.

I've been running my site for free for a while and now I am about to introduce payment for the services. I have no idea about how to implement the payment part for CC(I know only about how to do this with PayPal - which offers a very easy way for payment).

I am in US and I have a business account with the Bank Of America. They offer gateway services and merchant account services. To get informating about their merchant account, I have to fill in the request form and wait until they call me to talk about the account. I am going to do this, but I have to be prepared for the conversation, and I am trying to put together questions which I will have to ask.

Does anyone have an experience with Bank Of America merchant account? What will I have to ask them when they call me? Which information I need to make a decision about a merchant account? How does a merchant account in integrated into an application? Do you get a set of API or redirect to the third party's page to make a transaction?

I would appreciate any information about merchant accounts since I am completely blind about this topic.

Thanks
Olga

[Corey Bryant]

We have had a few merchants with them in the past.

But to give you an idea of some questions to ask:
Does the gateway allow you to process credit cards on your secure website?
How much does the transaction cost - including the gateway fee, merchant account transaction costs, and the discount rate?
Any exclusivity clause?
Contractual period?
Statement Fees?
Monthly Fees?
Yearly Fees?

-Corey

[oagady]

Thanks for reply, Corey, it's helpful.

However I believe I am confused about the difference between gateway and merchant account (the BankOfAmerica's information about merchant service is very vague). I thought that gateway is one way of processing payment online, and merchant account is another way. I thought that I have to choose one or another. Am I wrong? Do I have to set up both of them (like gateway for card verification and merchant account is just the account where money from the transaction are going to)?

Sorry for this basic questions.

Olga

[lorax]

Welcome to WebmasterWorld oagady!

>> gateway for card verification and merchant account is just the account where money from the transaction are going to

Yup. One make the transactions happen while the other receives and holds the funds. In some cases the vendor combines these services and offers them as a package deal so it can be hard to compare apples to apples unless you can discern what each provider is selling you.

[Corey Bryant]

No worries. I was assuming you were looking at them for an internet account.

A merchant account basically allows you to accept Visa and MasterCard. The processor gets the money from the consumer's (issuing) bank, gets it to the merchant account's (acquiring) bank and then over to you :)

The electronic payment gateway is the virtual connectivity between your website & First Data or Visanet / Discover / AmEx, etc to help verify the transaction. It is similar to the POS terminal in the grocery store.

-Corey

[oagady]

Thanks, Lorax

I have filled in the form for the merchant account application. I believe I will get a call from the bank on Monday. When I know what they have to offer, I will come back to the forum to ask if their offer is good.

Thanks for help
Olga

[oagady]

Thanks, Corey

[avi wilensky]

The greatest bargain I found after days of searching calling, and negotiating - was believe it or not - Costco via the Nova platform. They charge 1.99% (non-swipe!), plus the misc. transaction fees which are competitive or less than the others. This is only available for Costco Platinum members, but well worth the upgrade. See their website, and click on business services.
Avi Wilensky.

BTW, the Nova platform is not compatible with some merchant gateways, but they are compatible with Authorize.

[stymiee]

The Costco program is an outstanding program and Nova is rock solid. Nova does support all of the major gateways so compatibility really won't be an issue. The only catch is you do havre to be a Costco Platinum member which will cut into your savings with them. But if you do a high volume of sales that low percentage rate can really pay off.

[oagady]

Hi, everybody

Thanks for the information. I start understanding how this system works.

1. I've got prices for the merchant account and gateway for the Bank Of America. The gateway setup fee is $150 and monthly fee $19.95 (They are using Cybersource gateway). The merchant account - 15c per transaction and the rate is 3.65% (they told me that the rate is hight because my business is 100% online and that's why it is a high risk business and also because the average transaction rate ($20) is low).

2. I also called Costco. The fees for a merchant accoutn are excellent, but they don't have a gateway. They work either with Verisign or Authorizenet. Verisign setup fee is around $270 and $60 monthly payment. Authorizenet - $299 setup fee and $50 monthly payment.

So, the cheapest gateway solution is in the Bank Of America, but the merchant account rate is the worst there. Could someone recommend me which way to go? Can I negotiate with the Bank Of America regarding their rate?

I also have another question: i am going to choose the "Hosted order page" as the gateway implementation, so the customers are going to be redirected to the gateway provider's secure server to fill in the payment information. I still need to enable security on my server to get trasaction results back from the gateway server, but the question is - do I have to go with the security sertificate from an authorized third party, or can use a "self-signed" sertificate? The security certificates from the authorized parties are expensive, and I the only thing I need it for - to get the result of the transaction, since the payment information is going to be collected on the secure server of the gateway provider. I though that may be in my case the self-signed certificate is enough?

Thanks
Olga Agady

[Corey Bryant]

Hi, everybody
Thanks for the information. I start understanding how this system works.

1. I've got prices for the merchant account and gateway for the Bank Of America. The gateway setup fee is $150 and monthly fee $19.95 (They are using Cybersource gateway). The merchant account - 15c per transaction and the rate is 3.65% (they told me that the rate is hight because my business is 100% online and that's why it is a high risk business and also because the average transaction rate ($20) is low).

2. I also called Costco. The fees for a merchant accoutn are excellent, but they don't have a gateway. They work either with Verisign or Authorizenet. Verisign setup fee is around $270 and $60 monthly payment. Authorizenet - $299 setup fee and $50 monthly payment.

So, the cheapest gateway solution is in the Bank Of America, but the merchant account rate is the worst there. Could someone recommend me which way to go? Can I negotiate with the Bank Of America regarding their rate?

I also have another question: i am going to choose the "Hosted order page" as the gateway implementation, so the customers are going to be redirected to the gateway provider's secure server to fill in the payment information. I still need to enable security on my server to get trasaction results back from the gateway server, but the question is - do I have to go with the security sertificate from an authorized third party, or can use a "self-signed" sertificate? The security certificates from the authorized parties are expensive, and I the only thing I need it for - to get the result of the transaction, since the payment information is going to be collected on the secure server of the gateway provider. I though that may be in my case the self-signed certificate is enough?

3.65% is a bit high. Right now, the average is about 2.39% for online purchases. That is going up at the end of this month as well. Plus you can easily get Verisign's gateway for a cheaper price as wel. They do give you 1,000 free transactions, so that can save you quite a bit of money also.

A self-signed cert is not all tht great because the user will get a warning. And this usually freaks a lot of people out. Some companies offer a shared SSL, but with SSL certs being so cheap now, I tell my customers to get their own. Besides, a shared SSL does pose some security risks as well

-Corey

[oagady]

Thanks, Corey

I will check Verisign again, also I will call to the Bank of America once more, may be I can negotiate a rate (even though I am very pessimistic about that - I am not a good negotiator).

Regarding SSL sertificate: I've seen cerificates for around $350-400 a year. Is this an average price, or there is a place where I can get one for less?

Thanks a lot
Olga Agady

[Corey Bryant]

You can even get the SSL certs for less than $100 actually. You need to check with your hosting company to see if you can generate a CSR yourself or if they have to (and if applicable, what they might charge to install it)

-Corey

[oagady]

I host everything myself, I don't use any hosting company.

Olga

[Corey Bryant]

I can private you with the URL to the company then actually.

-Corey

[oagady]

Thanks, Corey

Could you please do that?

Olga

[Corey Bryant]

But of course :)

-Corey

[oagady]

Thanks a lot,

I am new to this forum, and didn't know that I have a mail box here, so it took me time to figure out that I have three messages from you.

Looks like a good deal. I will check this out.

Thank
Olga

[Corey Bryant]

No worries. I must have sent it twice or something. Good luck with it!

-Corey

[jagsanger]

Hi - you are far better off going with the BoA deal as dont forget that after you have 3 - 6 months of processing history you can go back and negotiate a better rate.

They don't tell you this but they will

Regards
Jag