I've seen a lot of debate on this, and I'm not worried so much about the issue of a couple % on transactions, but rather what's actually better. The way I see it, 2checkout isn't emailing me when I get orders until a day or two later, my system lets me know when I have a signup and I have to refresh the orders page in 2CO to see when the customer actually paid. Next is of course the issue of late payments, and what-not.

A real merchant account pays via ACH every day, which is great. You don't have to worry about late payments as it's pretty much automatic. I guess my biggest concern is fraud. 2CO already found a fraud for me, and believe me it was fraud. The guy signed up and spammed like no other, signed up for my most expensive account AND had me buy a domain for him. I took a loss on it, but it sure beats a chargeback! With fraud numbers like this, I'm afraid I might get booted from a merchant account. I think their fraud rate limit is around 2%. Also, of course, fraud not found and resulting in a chargeback is a serious concern 3 months after the fact. I know there are systems you can sign up for fraud protection, but then you're paying the same price as with a 3rd party and you're still not guaranteed safety.

I guess my main question is... those of you that have real merchant accounts, was it worth it?

I guess my main question is... those of you that have real merchant accounts, was it worth it?
Yes I have a merchant account and would have it no other way. If you have problems you just call you bank and explain, my bank has been great to deal with.
Yes merchant accounts cost more but I belive its more then worth it.

Another thing regarding charge backs, I havn't had one yet! What I do is check the order info, if it looks alright I set it up if a lot of feilds are blank I either call or email the customer.
I also run checks on US customers, and I normally require a phone number, or I don't setup the account. I have only had one billing problem with a customer, and they paid by cheque! :)

Definitely go with your own merchant account with an address and/or phone verification system (AVS). Do the best you can on verifying the customer information - call whenever possible and make sure billing information matches up. If you have a method in place for "pre checking" against fraud, your chargeback rate will be minimal (so you wont get the boot from the merchant provider)

I find PayPal just as effective as an actual merchant account plus you get better fraud protection then jumping out there with a new merchant account.

Monies are instantly transferred and they verify the information on the customer for you.

A real merchant account, without a doubt. Just take a look any given day at these forums regarding 3rd party merchant accounts -- save yourself/company and your customers the hassle from the start.

Definitely go with a real merchant account! You'll have no worries about what's happening with your money with a real merchant account, compared to having to worry about what problem or what excuse one of these 3rd party companies are going to come up with next while holding your money.

Originally posted by kneadingu
I find PayPal just as effective as an actual merchant account plus you get better fraud protection then jumping out there with a new merchant account.

Monies are instantly transferred and they verify the information on the customer for you.

I think PayPal is an even bigger risk because of their account verification policy. I personally do not have any problem with it, but they do verify your account randomly and after you've processed X amount of dollars. They do ask for some records and will freeze your account until they are made available.

IMO, Paypal should be used as a secondary means of payment.