OK, once and for all, I need to wrap my head around the various options for an ecommerce site. I'm hoping you can help me do that.

This month I will be building a site for a local client. We're in Canada, BTW. He wants to sell online with real time transactions. He has been a ground level retailer for many years, and he has his own merchant account for (until now) strictly off-line credit card transactions. And he has a very good relationship with his bank.

So here's where I need advice. I would think it's obvious that this person should not be looking at options like 2CO or Paysystems. After all, he's already got his own merchant account. So what is the next step? Does he approach his bank and ask to be allowed to use his existing account for online transactions? And then what? Once I set up a shopping cart solution for him, what's next? Does he buy his own SSL certificate? Or should I put a shared certificate on my server for him? And which gateway do I use? Is this dictated by his bank if he's using his current merchant account?

Questions, questions, questions...

Vito

Originally posted by vito
Does he approach his bank and ask to be allowed to use his existing account for online transactions?

May help to say here what bank he is using. Some banks are a lot more flexible than others.

Hmm. I would have to find that out. Not sure at this point.

Vito

It is not recommended to mix his brick & mortar account with an internet account. One is a qualified swiped account & one woud be a qualified keyed account. The keyed account would have a higher discount rate because of more risks involved. He needs to check with his bank to see what type on keyed merchant account they offer. And then check around.

2CO & Paysystems are primarily a third party merchant account. Keep that in mind as well.

OK, I'll get him to ask him bank about his options. After he does, I might come back to the thread and ask some more questions based on the answers he gets.

Vito

Originally posted by vito
I might come back to the thread and ask some more questions based on the answers he gets.

Vito Please do. I'm also interested in what happens as I have a few clients about ready to look into the same options.. (also in Canada)

you cant actually mix the accounts, but he may try and get a second account from his bank.

Hi Vito,

Heres the scoop in Canada...

Any of the major banks will issue your client an Internet Merchant Account, but they ALL require a deposit (which is usually VERY large).

Your customer should not and cannot combine their Point of Sale (POS) Merchant Account with an Internet Merchant Account. Whether they get an Internet Merchant Account from their bank or from another provider, it will be a separate account. If they got an account from their bank, they would still require a gateway.

The best provider in Canada for an Internet Merchant Account and Gateway is PSIGate. They have some interesting conditions you should make your customer aware of. Feel free to contact me and we can review in greater detail.

Hope this helps...

Originally posted by Gargoyle
The best provider in Canada for an Internet Merchant Account and Gateway is PSIGate. Why? What makes them the best?

To expand a little bit - being based in the US here, you can combine a brick & mortar (swiped) with an internet / telephone (keyed) if you did check that on your merchant account application. The biggest problm is that on your brick & mortar account you might be paying about 1.55%. But when you key in a credit card number, your discount rate might jump 1.82% - making that 3.37% instead of something like 2.30% for an internet account.

We are still waiting on one company actually to help bring us into Canada. Dealing though with Visa/Mastercard is not easy - you have ti jump through about 100 hoops - only 50 more left.

Hopefully though since you have been processing with your bank - they can waive that deposit.

Originally posted by mrzippy
Why? What makes them the best?

PSIgate

Pro's

- 2 major banks on the backend (BMO for Visa & Citibak for MC)
- Offer Direct, live connection to Amex
- Very competitive rates for Canadian merchants
- Thorough and complete control panel
- excellent fraud filter
- First Canadian Internet Merchant Account provider (most experienced)
- Publicly traded company
- above average support


Con's

- no consolidated reports (1 for Visa, 1 for MC and 1 for Amex)
- 2 different control panels (very inclusive, but would be nice to have on a single consolidated panel)

Boy, I'm sure glad I started this thread. I have a feeling I'm going to learn quite a bit by the time it's over. And I have a suspicion there will be several others clicking the "subscribe" link, as a lot of this stuff is fairly elusive, and many of us do want/need the knowledge.

Vito

In Canada I would stay away from the chartered banks for an online merchant account, the reason being that as far as I know they have exclusive contracts with either Visa or MC. Royal Bank and TD for instance only offer Visa. RBC and BMO have created Moneris to get around this problem.

Another problem is that many of the banks will only process in $CDN, which could be a problem for a merchant retailing to the States. This has been a major headache for a number of my clients as the rates change from day to day.

Also, many of the banks that do process in $USD will automatically exchange the money into $CDN at a 1.31% brokering rate. Any Canadiaan companies accepting $USD would be wise not to exchange it for a little while- at least until the exchange rate starts to dip.

From what I have been told Moneris is one of the more complete solutions, however the application process can be fairly lengthy and involved, and from personal experience the Canadian banks are heavy on the backend rates.

With Moneris you will also need to setup your own gateway and SSL.

I would suggest looking into a service provider like Moneris, PSIGate or Internetsecure.com.

Paul
Paysystems

Originally posted by pablo514
Any Canadiaan companies accepting $USD would be wise not to exchange it for a little while- at least until the exchange rate starts to dip. Ugh. Tell me about it.. there's nothing like getting a 15% increase in "expenese just from the exchange rate. :angry:

I'm thinking about opening up another paysystems account just for my canadian clients, but I have some concerns:

1) Inability to have everything in one control panel. The MCC is hard enough to use (like tracking deleted orders is almost impossible), etc.. and having to log into TWO panels would double my waste of time.

2) Paysystems wants to charge me another setup fee to open the "second" account. I am against this, by principle, because I already have an account with them so I don't see why I should have to pay again.

3) I'm considering just opening a merchant account and getting rid of paysystems altogether. I'm tired of the many "little" problems that pop up, as well as the many problems (IMHO) with the MCC that are never fixed. Even simple features such as the ability to list transactions by a different column (like expired date for example in the deleted order listing) are totally ignored by the dev staff when I make the suggestion... Or how about that I have 1 "pending" order that has been stuck in this status for about 2 months now, despite 5 tickets to their helpdesk to get it either resolved or removed. I have many examples, but this isn't the place to complain. It is just adding up to enough problems/concerns that I'm not certain I want to stake my business on paysystems any longer.

Originally posted by mrzippy
Ugh. Tell me about it.. there's nothing like getting a 15% increase in "expenese just from the exchange rate. :angry:

Not to mention the 15% decrease in profit from each American Customer - Also, Canadian pricing isnt quite as attractive to US customers with the current exchange rate (though its still pretty nice)


3) It is just adding up to enough problems/concerns that I'm not certain I want to stake my business on paysystems any longer.

Eventually you need to switch to a true merchant account. The benefits are just too many to list - 3rd party payment processors have their place, but IMHO they are not appropriate for running a business - the costs (particularly the indirect costs) are just too high.

Originally posted by Gargoyle
3rd party payment processors have their place, but IMHO they are not appropriate for running a business - the costs (particularly the indirect costs) are just too high. I really like the ability to "outsource" the billing aspect of my business... paysystems has been a good thing up until now.

I would like to continue with them, but the "intangible" expenses and headache of using them is just becoming too burdensome.

For example, when it takes 30 minutes just to go through the list of deleted transactions to "maybe see" if someone was dropped.. that is rediculous. It should take 10 seconds if they could just allow me to "sort" the list by deleted date instead of making me manually check against a list I keep on paper in my office, etc...

It's just silly. :rolleyes: Silly enough that it's now "costing" me more in time than I'm willing to spend.

I thought I'd post with what my customer has finally decided. I will be building 2 retail sites for him - one is a .com (US$) and one is .ca (Cdn$). And he will be using InternetSecure.com to process payments. I.S. is certainly not the cheapest around, but I think he made a good choice. I've used I.S. for almost 4 years now and am very happy with them. They are rock solid and have great support.

Besides, they're the first (only) in Canada to participate in "Verified By Visa" which is great protection for the merchant.

Vito

Yes Verified by Visa is fantastic. We are rolling it out to all our high risk clients. It is one shift that I thought I would never see in the industry.

Now just wait til MasterCard & American Express catch up hopefully by the end of the year

Originally posted by coreybryant
Now just wait til MasterCard & American Express catch up hopefully by the end of the year There's certainly pressure on them now to catch up. I'm looking forward to it. :)

Vito

Vito - After many discussions with PSiGate, they have mentioned that they will be introducing Verified by Visa and the M/C equivalent within the next fews months (probably Summer '04).

I have heard many things about InternetSecure, some good, some bad. Hopefully, they can charge in USD/CAD without the exchange problem.

Just to clarify for the rest, PSiGate will/can in fact process in both USD/CAD funds and keep them in their respective currencies throughout the process.

I have a US merchant account as well as a Cdn one. Each account deposits into my bank accounts and maintains currency. In other words, US account deposits into my US bank account, Cdn account deposits into my Cdn bank account. It's then up to me to decide when or how I exchange currencies.

Vito

Glad to hear it Vito. Please keep us posted on how your client makes out with your project ;) Take care.

As it turns out, customer gets an unexpected bonus. Normally, each account requires a $199 set up fee. That would be $398 for the 2 accounts. But InternetSecure has a promotion until the end of February. $99 for the first account, $0 for the second account.

:banana:

Vito

Does he really need to process online? I ask because I work with a company who process offline for a number of reasons.

They have a mail order contract with their MS provider who agreed that as they were processing offline, and with an added security level in place, they were free to continue using their mail order PDQ.

They maintain a very very low %age payment but their CC turnover is up in the millions mark so that sure helps.

They've been trading online for a year and have had one chargeback in that time, thats through a combination of excellent staff training, relying on staffs intuition to reject anything that just doesnt feel 'right' and a healthy dose of luck I guess.

They had their system audited for security in order to secure the contract but the costs involved there were again worth it over the mid-long term period.

I suppose they could process offline. But there is something to be said for the "immediacy" of online cc approvals. While the product he is selling doesn't really invoke "impulse buying", he prefers to have a transaction completed/approved/done while the visitor is online.

Vito

Nickki,

I'm pretty sure that I know what industry your client is in and there are a number of similar operations.

From what I understand the major Canadian providers are no longer accepting MOTO merchants that wish to use POS machines to process their orders. They are in the midst of deciding what to do with the clients that have already have on that platform.

I think alot of the businesses that have decided to move from a POS solution to an automated online solution have done so for the following reasons:

1) Fraud protection- it is on the rise in Canada.

2) Simplicity and efficiency- Online systems cut the amount of paperwork required to process orders and they also cut down on the amount of man power required to handle the payments. If you are able to move your employees into other areas of the operation you are able to decrease the turnaround time and increase your sales.

3) Most providers in Canada only offer MasterCard billing in CDN$- If you are targeting the US market you are going to see alot of headaches because of this.

--------

Paul

Just wondering what industry you think is involved? Its high value low volume...

1) It really depends on what fraud protection measures they use, the offline system involved here has more inbuilt protection features than are available with any online processing they have available in the UK at present.

2) The difference in offline and online processing was sufficient in cost to ensure that its worth the manpower involved.

3) Not something I can comment on although I can see it would be a problem.

I wasnt suggesting for a moment that its the right scenario for all, I would imagine its actually right in a very small minority cases. I was just asking if it was applicable for this business model. All your points are perfectly valid and I imagine in this case its more commercially viable for online processing.

Originally posted by pablo514
3) Most providers in Canada only offer MasterCard billing in CDN$- If you are targeting the US market you are going to see alot of headaches because of this.


I agree with everything you posted, except this, so I felt I would comment on this. This comment in flat-out untrue. You say "most" providers. There are 4 major ones in Canada, 2 of which (Moneris/PSiGate) I KNOW will process a M/C in both USD/CDN. It IS true that a seperate merchant account is required for each, however, they are able to integrate them and usually give you a break on the fees for doing so.

At any rate, I just thought I would clarify.

It comes down to the industry- I figured we were looking at online pharmacies because of the extremely high volume and the fact that they were using POS terminals.

It's true that some companies can bill in USD for MC- but they don't accept pharma anymore (as far as I know)

Originally posted by pablo514
It comes down to the industry- I figured we were looking at online pharmacies because of the extremely high volume and the fact that they were using POS terminals.

It's true that some companies can bill in USD for MC- but they don't accept pharma anymore (as far as I know)

Fair enough - I didn't realize you were assuming a certain kind of business when you mentioned this. I think I'm on track with you now ;)

I'm just interested, you say that people are moving over to online processing for 3 reasons, one of them being fraud prevention.. what I'm not sure of is why online processing would be a benefit for that?

i haven't caught on to what business you're in yet... :)