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 who 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 would 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 is a little harder to get started with. We recommend CDG Commerce as far as getting your own merchant account goes and here is why....
Our first merchant provider we signed up with lured us in with amazing rates, and customer service. After just a few months of being with them they jacked our rates up, put a 10% reserve on our account without telling us, and lied about the category our transactions fell into. They claimed over half our transactions were non qualified which meant close to a 5% fee per sale. We started doing research for a better merchant provider, and it turned out the industry was filled with companies pulling the same scams. That's when we found CDG and haven't had a SINGLE problem with them. They haven't raised our fees at all , we don't have a reserve stealing money from us, and less than 10% of our transactions fall into the non qualified catgatory rate which is a 4.15% fee per transaction. We have worked out a deal with CDG Commerce so that you receive the same exact discount we as a large company receive. If you wish to signup and get started with our deal we have with them please fill out the following application form For more info on rates, advantages and disadvantages keep reading...
Third party merchant account
Paypal and 2checkout are what you can call third party merchant accounts. They store the credit card numbers that 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 decide if its going to be a recurring charge or not. Once you decide all that, they give you a link to provide your customers with. Your customers will then go to this link to signup with you. WARNING: 2checkouts largest competitor (Paysystems) was forced to shut down by MasterCard and visa when they determined their 3rd party business model to be illegal. Many people believe 2checkout will follow the same course along with many of the other 3rd party merchant providers we haven't listed. We believe paypal will never be shut down due to is size, power, and the fact it does background checks on the accounts they issue through bank account verification, along with many other security checks which weren't in place with paysystems.
Fees
| Company |
Paypal |
CDG Commerce |
2checkout |
|
Per transaction |
2.9% + .30 cents per transaction |
2.05% + .25 cents per transaction |
5.5% + .45 cents per transaction |
|
Monthly Price |
$0
|
$10 |
$0 |
| Setup Fee |
$0
|
$75 |
$49 |
| Processing Minimum |
no
|
yes |
no |
| Credit approval |
no
|
yes |
no |
| Bank account Required |
no
|
yes |
no |
| How they pay you.. |
bank deposits, debit card, or check. |
daily deposit into your bank account. |
bi monthly check |
| Link |
paypal |
CDG Commerce Application Form |
2checkout |
|
|
CDG 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.
Benefits and Disadvantages
Paypal
Paypal is the quickest way to start collecting payments and millions already have a paypal account. Paypal has a VERY strong member base. Even if you have your own merchant account it would be silly not to also take payments using Paypal. Over 15% of our sales are done through people who refuse to use anything but Paypal. 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 since you are only charged when you sell. Paypal allows you to deposit earned funds into your bank, spend them using a debit card, or request a check. If you plan on only having a paypal merchant account keep in mind you will be losing sales due to the fact many countries aren't supported by paypal, and some people won't signup with you if they only see paypal. (They might think of you as an unstable company due to you not having your own merchant account with someone like CDG Commerce.) Another benefit of paypal is that it integrates fairly well into the free billing manager we include as well as others like modernbill.
2checkout
2checkout has very high transaction fees. There is a $49 setup fee to get started. 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. Because of the 3rd party market slowly being shut down by Visa and MasterCard we don't recommend a 2checkout account nor any other 3rd party merchant provider out there besides paypal.
CDG Commerce
Advantages to CDG includes the lowest rates, more control, and the power to bill your clients for what they owe at any time, and the fact that this works PERFECTLY with the free billing manager we offer as well as the other major billing systems out there such as modernbill. If you are doing a decent amount in monthly revenue a cdg merchant account is a must. If you are brand new with no income you are better off getting going with a paypal account.
The downside... monthly minimum, monthly $10 statement fee, a credit check to get started, and a more complicated signup process. You will also need to purchase a private SSL which runs about $75 a year. It does not come with a shopping cart so it would be wise to use this with something such as the autopilot billing manager we include. One of the biggest disadvantages is fraud signups. We know how to catch the fraud and pretty much stop them as soon as they order, but if you don't check if a signup is fraud and it turns out to be you will end up with a $19.95 chargeback fee. If you wish to start the process in getting signed up with CDG please fill out the application form
