Merchant Services:
There are two main ways to collect credit card
payments online. You can get a merchant account yourself, or
you can do a third party merchant account. There are many different
merchant service providers available. We have chosen three
services that we feel are the best in price and service.
What's the difference between a third party merchant
account and your own?
Own Merchant Account
Having your own merchant account means you get
to bill credit cards yourself. This is a lot of responsibility!
You will be storing your client's credit card numbers in your
very own database, and would have the power to bill them any
time you want for any amount. Because you have so much power,
this type of an account isn't easy to get. You have to have
a business checking account and pass credit checks. We recommend e-onlinedata as
far as getting your own merchant account goes. We currently
use them, and our partnership allows you to get an
even better deal. Not only does E-onlinedata have the best
rates, but they have the highest credit approval percentage
out there.
Third party merchant account
Paypal and 2checkout are
what you can call third party merchant accounts. They store
the credit card numbers and charge your clients. With a third
party merchant account, you basically go into your account,
click "create
item," decide how much to sell that item for, and if its going
to be a recurring charge or not. Once you decide all that,
they give you a link to provide to your customers. Your customers
will then go to that link and pay.
Fees
Company |
Paypal |
2checkout |
e-onlinedata |
Per transaction |
2.9% + .30 cents per transaction |
5.5% + .45 cents per transaction |
2.29% + .30 cents per transaction |
Monthly Fees |
$0 |
$0 |
$25 |
Setup Fee |
$0 |
$49 |
$75 |
Processing Minimum |
no |
no |
yes |
Credit approval |
no |
no |
yes |
US Bank account Required |
no |
no |
yes |
| How they pay you.. |
bank deposits, debit card,
or check. |
bi monthly check |
daily deposit into your bank
account. |
Link |
paypal |
2checkout |
e-onlinedata |
E-onlinedata has a monthly minimum of $25.00
in transaction fees, so if you sell $0 worth of goods you have
to pay an extra $25 for not reaching their minimum. If you
sell $1,100 in goods you will reach the minimum in fees and
not have to pay anything extra.
Benefits and Disadvantages
Paypal
Paypal is the cheapest way to collect payments
and millions already have a paypal account. Paypal has a VERY
strong member base. Even if you did have your own merchant
account it would be silly not to also take payments using Paypal
considering they are so large. Over 20% of our sales are done
through people who refuse to use anything but Paypal. The biggest
problem with taking Paypal is that they require everyone who
pays you to become a member. Many people will not want to become
a member, and don't have the patience to go through the whole
process in order to become verified. Paypal has a close to
zero fraud rate with us. A big benefit with Paypal is that
you can have a debit card sent out, and have instant access
to your funds! Paypal will run the shopping cart for you so
it's hassle free, and no coding knowledge is needed. There
are no monthly fees with Paypal, as you are only charged when
you sell. Paypal allows you to deposit your funds into your
bank, spend them using a debit card, or request a check.
2checkout
2checkout has very high transaction fees. The
benefit is that it's a clean pay. People aren't required to
become a member; all they need is a credit card and they can
pay you. There is a $49 setup fee to get started. We do not
recommend using only Paypal, so having Paypal AND 2checkout
is an excellent combo. They run the shopping cart for you so
it's hassle free, and no coding knowledge is needed. 2checkout
does not have any monthly fees, so you are only charged when
you sell. 2checkout will pay you in the form of bi monthly
checks.
E-onlinedata
Advantages to E-onlinedata includes lower rates,
more control, and the power to bill your clients for what they
owe. The downsides include monthly minimum, monthly fees, credit
checks, and a business banking account. You will also need
to purchase a private SSL which runs about $75 a year. This
also requires a lot of programming skills. E-onlinedata does
not provide a shopping cart, so you will have to use your own
and know how to build it and integrate it. One of the biggest
disadvantages is fraud. About 10% of all our new orders are
fraud. We know how to catch the fraud and pretty much stop
them as soon as they order, but it did take much learning on
our part. If you do happen to let a stolen credit card be used,
you will end up with a $25 chargeback fee and a 10% reserve
on your cash. Also, if you get too many chargeback's, Visa
/ MasterCard will give you the boot. E-onlinedata will pay
you daily directly into your bank account. Having your own
merchant account is not a game! We DO NOT recommend new companies
starting with this. Paypal and 2checkout end up being much
lower in cost. Once a very high volume in sales is reached,
you would dump 2checkout and switch to Paypal / E-onlinedata
combo if you had someone skilled enough to run it for you.
