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I am starting my first ecomm site and I am having trouble choosing a merchant provider. I am fairly set on Authorize.net as opposed to Vsign Pro, although I am open to reasonable arguments for the later. My question is simple... can anyone recommend a good merchant account? I am trying to avoid gross setup fees and high discount rates. The industry is jewelry so the risk shouldn't be too high.
I am trying to move quickly on this so if anyone can help, please sticky or respond.
Depends on the average order amount. Jewelry is a broad description, do you sell diamond watches or just some cheaper necklaces and braces?
If the average price per product is more than USD 500, you bet it is high risk, especially if you don't have very many sales in the beginning and someone issues a chargeback.
If you are located in the U.S., you might want to consider to apply for your own direct merchant account. I believe Charge.com is one of the biggest ones in the U.S., but other people do have more knowledge than I have regarding merchant accounts in the U.S.
I used them as my gateway for a year, with Citibank providing my merchant account. I had very good luck with both of them. The fustration I had was with figuring out my monthly statement. It was impossible to calculate if it was correct or not, because of all the different rates and fees involved. AmEx, Discover, mid-qualified rates, corporate purchasing cards... they all have different rates.
I've since switched to PayPal Website Payments Pro. I appreciate the simplicity of the 2.2% + 30 cents per transaction.... regardless of the brand or type of card. They combine the gateway and merchant account into one, saving me on monthly fees. And the transactions settle into my account the moment I capture them. Worth a look, IMHO.
In my previous jewelry business our merchant provider was Cardservices (as is the case with my current biz). We had great experience with them, but much worse experience with using some smaller merhchat resellers before them.
From experience, jewelry is a very high risk business. Many times Cardservices would place funds on hold (up to 50k) just because we were going over our processing limit (which wasn't easy to increase - but it also depends on how fast you grow) and because of the high chargeback rate.
I would suggest you put very stringent verification systems in place for verifying orders to make sure they are not fraud. My previous company still only ships to the billing address only which I'm sure is causing them to loose many sales, but they have no other choice for fear of loosing the merchant account. And that's with doing over 150k/month in processing, that risk is still there!
Give me a call if you want to discuss further, I have some good experience with merchant accounts, and the jewelry industry as it relates to them.
As far as the electronic payment gateways you mentioned - there is also LinkPoint which is owned by First Data. All three gateways actuallly use the First Data platform to help process the transactions.
Getting a merchant account with your type of business - it can be done & each processor is a bit different a far as it is handled. Talk to a few agents - if they tell you no problem - time to go somewhere else. I am not trying to scare you, and I won't say that it will be a breeze. It will be a bit difficult setting up a merchant account in this industry than if you were selling office supplies but it will be easier than setting up a merchant account if you were doing online gambling.
All kidding aside though. Yes, it's common sense that something like jewelry and other high priced specialty items are going to be high risk and thus getting a merchant account (whether it be drop ship or in-house inventory) is going to be difficult.
Now, I'm just guessing on this since I haven't opened my e-commerce store yet, but wouldn't anything sold on the internet be high risk? It's so easy to buy something on the net. Thus, it would be so easy to return something, do chargebacks, claim someone stole your credit card, whatever just so the "customer" gets a free item, or claims the moonlight was in my eyes and thus didn't' realize what I was buying, etc etc. That's a lot of work and chances a merchant account company has to deal with between you and your customers. Plus I'm sure there are other disadvantages that I haven't mentioned that you can fill-in-the-blanks with.