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Old 21st July 2011, 01:10 PM   #31
JPaul
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Default PayPal rates are too high..

I was given the task of finding a new merchant processor for the company I work for. We had an account with Wells Fargo but they screwed us over so we decided to change. I contacted over twenty companies and researched many more, including PayPal. What I found was an unbelievable amount of hidden rates and fees that are being charged by companies using the "tiered" billing system.

Through my research I found the most transparent and least expensive form of processing is interchange plus pricing, also called pass through pricing. This pricing used to be reserved exclusively for large companies, but now it is offered to anyone. The leading company offering interchange plus pricing is InterchangePlus Solutions.

As far as PayPal goes, an average of their rates came to ≈2.54%
InterchangePlus Solutions averaged to just under 2.00%!

At the amount we process that will save us about $115/month in processing alone!

Bottom line: PayPal is a bit more convenient, but you will have to pay for it....

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Old 6th September 2011, 02:22 PM   #32
MattIPS
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Hi,

I actually work in the Merchant Processing industry.

A few tips about how it all works.

PayPal has been great for a lot of people. One thing to keep in mind is that there was an act passed through Congress called the Frank-Dodd act. In this is the Durbin Amendment. The Durbin Amendment will go into place October 1st. Under this Amendment Debit card rates will be drastically slashed. Being that PayPal works on a flat rate, those savings will not be passed on to a Merchant. Debit cards should show a charge to Merchants of well under 1.00%. In many cases Debit Cards also = up to 75% of cards used at a business.
The best way to access these rates is to operate with a Processor who works under an InterchangePlus pricing structure. In this structure you pay only what Visa and MasterCard charge plus a markup to the Processor.
This Processor markup is called Basis Points. If you pay 50 Basis Points to a Processor then you are paying 0.50% on each transaction to them.
If you look at your Merchant statement and see the terms Mid-Qual or Non-Qual then you are most likely paying too much. Find a Merchant who operates under an InterchangePlus Pricing structure or ask your current Processor to switch you such a plan. Every Processor can do it, many choose not too.
Hope this helps.

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Old 6th September 2011, 02:45 PM   #33
Logan
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Thanks for sharing Matt, welcome aboard

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Old 13th September 2011, 11:27 PM   #34
tobuso
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We are also a payment processor. We can do your website development, shopping cart, and gateway integration. We also make your site Search Engine Optimized and can provide an SEO plan to help you get to or near the top of google. It is a seamless process.

Interchange plus is most definitely the way to go. You will not only know exactly what you are getting charged by your processor you will get the lower rates that congress secured passed through to you.

With us, if you batch before 10pm Eastern time you will get your money the next morning. Just make sure you are with a bank that will give you access to posted ACHs(Usually the larger ones.)

If you have any questions feel free to call me. Philip 864-735-5366

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Old 11th October 2011, 02:18 PM   #35
kathysaltlake
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Default One of my concerns?

Hi MattIPS and thank you for you post.

I am now doing a lot of reading and researching before i start my own online business.

Many times I have heard from colleagues at work that PayPal suddenly changes things and has a "jerk-reaction" as they call it. As i understand it from their experience, Paypal just changes things on people that use their system to sell products or services. The people that have told me all these negative things about Paypal just hate it with a vengeance.

So i am very hesitant to give them a try.

Is there any truth to Paypal changing things on its customers and causing a nightmare for businesses that depend on their revenue coming from Paypal?

Kathy

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Old 12th October 2011, 10:07 AM   #36
MattIPS
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Hi Kathy,

I can't speak entirely to the situation but from what I understand PayPal does change their rates each month according to the amount of business the Merchant did the month before.
I know they have various charges for some of their programs including a Gateway but I don't know exactly if everyone has to pay the charges or how often they fluctuate.
If you have any more questions or need some help feel free to email me at [email protected]

Hope this helps Kathy

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Old 12th October 2011, 12:11 PM   #37
tobuso
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What paypal does is put a risk hold on your funds. I have gotten many clients because of this issue. They usually hold 30-50% of your funds for 3-6 months in case of chargebacks. This is very strict compared to a real merchant account. I have almost never seen chargbacks holds on standard merchants. They are reserved for high risk merchants like the adult industry and collections.

Call me if you have any more questions - 864-735-5366

[email protected]

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Old 14th October 2011, 08:53 PM   #38
kathysaltlake
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Default Thank you for you help --->>>

This is a wonderful forum ... many nice helpful people.

Thanks Philip.

Any idea on the best ecommerce service provider for selling eBooks?

Thanks
Kathy

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Old 20th October 2011, 01:58 PM   #39
kathysaltlake
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Default Merchant Account Providers

In the last week I have been reading about merchant accounts and how they work, merchant providers (and all the names they call themselves, e.g. merchant bank, merchant services, acquiring banks, ISOs, etc.) and have come across lots of confusing and contradictory information. I wish I could find someone who was an expert on this subject, although i would feel sorry for her/him since I would bombard them with 100 questions.

Anyways, what i want to know is if anyone has got a merchant account from a reputable company for the purposes of what i need and maybe you can explain to me what your rates are (if you want) so that I know what the level of rates and fees and charges I should expect to pay for.

Here's what i am currently thinking of doing as an Internet business:

I want to offer a resume service whereby I help people to either get from me 1) custom developed resume, 2) about 50 sample resumes for their industry to use as a template, or 3) get a subscription to my service that will give them many different benefits.

If you have a business similar to this and have gotten merchant account for it, i would very much appreciate if you contact me and would even consider paying you for your help and advice.

Any information to help me get started and avoid pitfalls would be great.

Kathy

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Old 28th October 2011, 01:05 AM   #40
Victor196
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Kathy, unfortunately I don’t know much about PayPal or internet based business, but there is some info you might find useful.

First of all you should never sign contract with early termination fees or some will call it “reasonable amount of liquidated damages compensation”.
In most contracts it will be pre-printed in the back, so you have to ask for signed Addendum from processor before signing contract. Do not accept verbal promise. Just tell them that there are many processors who believe in keeping business the old fashion way – by earning it. If they refuse, say good bye. Not having early termination fees will give you an ultimate negotiating power in the future. You will need it later. Do not be afraid to be firm. It’s very reasonable request.

In application put twice higher amount than anticipated for monthly volume, average ticket and highest ticket. As soon as merchant account open call processor and find out what exact limits you have been approved for. (It may be different from what you applied) You have to know and stay under your limits. If you need to process higher volume than approved, call processor to get permission. If you don't, bank or processor may hold your funds for a long time. It’s called “Reserve Account”. By signing contract you giving permission to processor to hold any funds at their own discretion, every contract has it and many business owners suffer because they were unaware of this rule. Consult with processor.

In internet business all your transactions will fall under category e-Commerce Basic. For example: if customer buys $100 product using Regular Visa it will cost interchange fee of 1.80% + 10 cents plus assessments of 0.0925% or 9.25 cents plus processor's mark up of ….could be 40 – 50 cents. All together it might cost $2.5 – $4.
Somebody please correct me if I’m wrong.

Another thing to pay attention is Chargeback.

I would go with midsize processor like Payment Logistics or Netcom Pay System.

Hope this helps and good luck.

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