Lets talk about CC Processing

I'm so sick and tired of PayPal and really want to ditch them in the worst way.

I've been wanting to accept CC's directly on my site but would like to get some info/personal experience from those of you that currently accept CC's either through your bank or some other institution.

There's got to be a better/less expensive way to get paid for all of my hard work.

There's got to be a faster way to get my money than the 3-4 days it takes paypal to complete a funds transfer.

So please jump in here and educate me.

Seriously, Serious, you should always accept Paypal regardless of other payment options. Why turn customers away? We have a merchant account, it used to be with First Data which was a huge ripoff but now it's through our bank. Interestingly enough, the backend code is still with First Data and we still use their payment module. But our rates are way, way better.

But even though we do offer credit card payment directly through the site, Paypal is still around 50% of our customer's payment choice. A lot of people use it and are very comfortable with it, and there are plenty of people that don't have credit cards but do have a Paypal account. There are also plenty of people that do have credit cards but trust Paypal with their sensitive card data over you. Believe me, that is very true, we get that regularly. So you need to plan for that 3 to 4 day transfer turnaround, or get a debit card from them so you can use the money in your account to pay vendors, bills, etc. immediately.

Plus there are other benefits. Paypal only charges 30 cents processing fee to refund your customer and refunds the entire amount while a merchant processor is going to charge the % fee for the sale and then the same % fee for a refund and not give you back the original % fee like Paypal does. Believe me, the merchant account companies suck your blood way more than Paypal ever has! They are leeches. Paypal does not distinguish between "qualified" and "non-qualified" cards, which means no rewards points cards at a lower % and rewards points cards at a higher % - we merchants are the ones that fund rewards points you know. So I think you will find they (PayPal) are actually the least $$ solution.

What other problems do you have that makes it tough to keep using them? If you are having other problems with Paypal, like a lot of disputes that tie up your funds, that may be an indicator of other problems with your business model and/or customer service. We get around 500 Paypal transactions a month and have maybe 1 dispute every 2 or 3 months and it almost always - like 95% of the time - resolved amicably through communication.

By all means, get a merchant account and offer credit card payment through your site. You will have to get to a higher level of PCI certification to accept cards directly through your site but that is just part of doing business. But, I strongly recommend against not using Paypal regardless of your other payment methods. You never, ever want to turn customers off from giving you their money! Give them more options, not less.

I'll leave the PP option available for those that want to pay directly from their account. That being said, the overwhelming majority of my customers pay via CC anyway.

Like all business owners I despise someone sticking their hand into my cash-box.

PP's funds transfer is too slow for my needs and the rates that I'm paying are too high. 2.9% + $0.30 per transaction is highway robbery IMHO. In my biz the margins are extremely low and raising prices sends customers to the competition.

I get quite a few customers that email me asking if they can pay directly via CC and not use PP at all and I have to turn them away....not a good thing either. Adding a stand alone CC processing option makes sense to me and gives my customers another option to pay for their purchase.

I've had many, many transactions held up by PP for 24 hours as part of their seemingly random security concerns. When my customer gets an email from me stating that I cannot ship their product(s) because PP is withholding the funds they get a bit irate, and I can't say I blame them either. Usually folks calm down after a phone call from me ....but that's valuable time that I could be using for other parts of business that need attention. (I do turn wrenches in addition to running my website.)

I've been doing lots of reading online and have seen quite a few offers with ridiculously low rates (0.39%) that are too good to be true...and of course they are scams designed to hook ya and reel ya in. Not buyin' into that. This a good read on the subject:
http://www.practicalecommerce.com/articles/3292-Credit-Card-Processing-Don-t-Be-Seduced-by-Teaser-Rates

The comments are interesting as well...

The competition in the processing industry is ridiculous. Business owners can harness the competition and use it to their advantage. It's simple -- here's how to "shop" for a merchant account:

1.) Don't ask a provider for its rates, fees, etc. -- demand what you want
2.) Demand pass-through pricing 3.) Refuse to pay an early termination fee
4.) Demand a completely populate application and agreement for review, and check page numbers and external references to ensure all documentation has been provided.
5.) Demand that the processor provide an addendum in writing that clearly outlines for how long the rates/fees (markup over interchange) will be honored -- i.e. how long before rates increase. Providers will be quick to say that they can't provide a guarantee, but that's not true. Providers make this guarantee all the time in our marketplace, and we audit statements to ensure they stick to the agreement. There hasn't been an issue yet.

Serious:

I've been doing lots of reading online and have seen quite a few offers with ridiculously low rates (0.39%) that are too good to be true...and of course they are scams designed to hook ya and reel ya in. Not buyin' into that. This a good read on the subject:
http://www.practicalecommerce.com/articles/3292-Credit-Card-Processing-Don-t-Be-Seduced-by-Teaser-Rates

The comments are interesting as well...

The ridiculously low rates would never apply to an ecommerce site, those rates are for Card-Present-Swiped CPS transactions, non-rewards, non-corporate, non-government card which are pretty much non-existant.

• Get an interchange plus merchant account instead of tiered account. Your rate will only change when the interchange rate is renewed and there is advance notice of when that will occur. Rewards, non-rewards won't matter. You will see that there are over 3 dozen different rates depending upon the card. That's how the other processors make their money by lumping those 3 dozen rates into 2 or 3 tier levels.
• Get your own Auth.net account for gateway access. Don't let the merchant provider resell an Auth.net account to you. DAMHIKT, you'll find out when you switch providers down the road if you don't get your own account. There are resellers for Auth.net that will work with most any merchant provider.
• If you've never had a traditional merchant account, don't expect to get the lowest rates. Track record of sales and chargebacks will affect your rate.
• If you are paying the highest PP fee, then don't expect a merchant account to be much less because you don't have the sales volume to qualify for better rates.
• Processors DO refund interchange fees if/when you make a refund.
• You will have PCI but that takes me about 2 minutes per month. Refuse to pay the processors monthly PCI fee by providing your own PCI certificate from your ASV. If the processor will not agree, find a different processor. Our host provides an account with an ASV as part of our hosting fee, so we schedule monthly on-demand scans and email the certificate to the merchant provider.
• If you get your overall credit card fees below 2.5%, you're doing pretty darn good. That's dividing TOTAL fees paid (Auth.net plus Processor) by Monthly Total dollars processed. BUT, your sales will increase because some customers refuse to use PP and will spend money if they don't leave your site for payment.
• With a perfect credit rating, excellent sales volume and zero chargeback record, I've seen rates as low as 0.1% plus interchange rate and $0.0 per swipe fee per transaction using a Month-to-month account.

If PP is holding up access to your deposits, there is probably a reason for that. It could be related to length of time the account has been open, deposits, sales, chargebacks, etc. Our access to PP deposits are instant. Funds transfer is a different story and is not PP holding up access. That's just the speed through interchange.

BTW: I would never, ever tell a customer that their order is being held up by PP. That's not their fault and sooner or later you'll have people complaining to PP. Then, you'll really get your hand slapped. If PP indicates "OK to Ship", you need to ship.

RixStix:

• Get an interchange plus merchant account instead of tiered account. Your rate will only change when the interchange rate is renewed and there is advance notice of when that will occur. Rewards, non-rewards won't matter. You will see that there are over 3 dozen different rates depending upon the card. That's how the other processors make their money by lumping those 3 dozen rates into 2 or 3 tier levels.

• Processors DO refund interchange fees if/when you make a refund.

Good to know, I wasn't aware of this and will definitely look into it and call our merchant account rep at the bank to get more info. Like I said, we were getting raked over the coals but when I first started my site about 5 years ago I had some real credit issues and couldn't get an auth.net account, Linkpoint/First Data was the only one that accepted us.

We've only switched over about 3 weeks ago and have done a few refunds so I will see if they are refunding the fees or not. I know that First Data did not, I was pretty incensed when I found out that they were sticking us on the sale and refund and it was like being double charged. I assumed it was like that for everyone and just another business expense...... Live and learn, right?:smile:

I think we are getting pretty close to 2.5% overall so it's good to know that that's pretty good. My credit is better but still needs around 2 to 3 years to get back to excellent.

Back to the OP, what I found has personally worked for me is to offer CC, Paypal and check/money order methods. The check/mo is used maybe 5 times a month, there are people that don't have debit/credit cards or a Paypal account, or don't like doing online paying. I looked at Google Checkout, it was a while ago and the module seemed buggy but I am not sure how it is lately or what Google charges. Likewise Amazon.

I was having my supplier charge the customer's card directly for months, and just paying me at the end of the month. It was simple, they charged me my share of the CC fees and handled it all.

Looked into PayPal's CC processing and it actually was a better rate than what my supplier, who does tens of thousands per month, was getting. The % fee goes down based on volume but it's straight across-the-board pricing. Instead of applying for a merchant account, etc. I found it was easier to go right with PayPal's integrated credit card processing on your site - less PCI compliance headaches and you don't have to deal with 2 different parties. Refunds are hassle-free, it's easy to invoice customers for changes/extras and the customer doesn't know that it's PayPal handling the processing unless you want to show it to them.

Your competitors all have to pay the same credit card processing fee as you do. Either your margins suck and you need to find a new supplier or you're in a bad market.