Our merchant account is being terminated at the end of July because we processed a transaction which was almost $16k, and apparently the merchant does not like this and their risk management division has deemed us as not worth their business!

We were with modernauthorize/e-onlinedata, but now theyre shutting us off for this damn stupid reason.

I am looking for a new merchant account provider who is capable of handling transactions in the amount of $15k-$30K or more.

I was talking to someone at e-onlinedata regarding this issue, and I told them we were a webhosting company and I told him our usual sale is $800+ and we just recently had 2x$2150 and 1x$1500 and hes like well that could be a problem most hosting companies are between $10 and $100.. I was like well wtf we arnt a virtual hosting company, we do dedicateds and colocation.

So basically, they cant handle a real business with real revenues, and I need a new merchant account.
We had been customers of theirs for close to a year, and they just come along and shut us off today effective WITH 4 DAYS NOTICE!!


Who can I choose to go with that has prices very similar to ModernAuthorize?
2.15% plus $0.25 per transaction...

Need help ASAP as a large amount of our transactions are done via credit card!


We have had 0 chargebacks in almost a year with them, and they decided to be anal about this $15k charge that I attempted to process last week and required all sorts of documents and then a week+ for "processing" so I decided to just forget CC processing for the client, VOIDED the transaction and had them pay via Wire, but apparently e-onlinedata doesnt like this and is causing these problems now!

Contact Wells Fargo, or whichever bank you use. Most major banks offer merchant accounts that will handle transactions of those amounts.

CDG Commerce (United Bank Card) is a good one.
Also, I highly recommend Nova (Owned by US Bank) and sales
via NxGen3
or Card Service Intl.

We have multiple providers for various brands. All have their pluses
and minuses, Nova would seem best for you as you can get a Nova
account with no or close-to no limit on volumn or average transaction.

Dan

P.S. URLS:

www.cardservice.com - Card Service International
www.cdgcommerce.com - CDG Commerce.

http://www.nxg3.com/index.cfm?id=internet.html

For NxGen/Nova

For NxGen/Nova:


How do I view pricing, or speak to someone?

Only thing I found was: http://www.nxg3.com/contact.cfm

Talk to Chris from CDG Commerce (http://www.cdgcommerce.com) That is a great group of people to work with there.

Yeah, we actually just applied to them just a bit ago... more expensive, but I hope they can handle our transactions.


I've never heard of nxgen/nova, and I have heard bad things about CSI with direct experience through a personal aquaintance, over a large amount transaction.

So lets hope CDG works out

No matter who you talk to - if you are going to process that high of a transaction - get permission. Remember not only you are liable for that money but the CC processor is also liable.

If you are going to process any amount that you think might raise a red flag, contact your processor & speak with them. See what they might recommend.

Wow a charge this big I'd insist on a check or something that can't be reversed on you a year down the road! Or like, buttloads of faxed and notarized documents stating emphatically "yes we <customer> REALLY REALLY DO want to pay <merchant> $xxxxxx for <whatever>" in triplicate!

Good luck with your dilemma I'm a merchant account newbie but a 16K charge would keep me up nights, seriously.

I highly recommend Corey and Russ at Merchant Accounts 4 Less (http://www.merchantaccounts4less.com). Great rates and excellent service!

That is a huge transaction to pay via a credit card. The biggest transaction we've processed was $5k. I'd have to agree with Dixiesys that it might be safer to ask for a check.

The client not only faxed back the contract, but mailed back the original as well.

So we were pretty covered if they did charge back, that wasnt a worry to us.

I dont know why everyone gets all up in arms about a $15k transaction... thats no where near a lot of money...
They were also using AMEX, with which we verified the information as belonging to the card holder.


Theyre also a fairly large distributor of streaming media in a certain market.

They just get upset because what happens if it is a chargeback and the processor tries to debit your account? If there is not enough money in there, they are responsible for it.

Since you did get a fax, the risk department should have taken that into consideration. But in the future, call them & then let them know what it happening. The more communication you have with your processor, the better. Afterall, you are their customer & you want to maintain the communication since this is your business.

It's not about the amount of money. It's more about the fact that a lot of people use chargebacks all the time because a year down the line they decide that they didn't like the service.

As for the faxed contract it is a very smart move, unfortunately most companies here don't use contracts which is a shame since most chargebacks occur as a result.

Why would you want to accept a $15,000 transaction using a credit card?

1) The customer can issue a chargeback even past a year... even with signed documents, there is a risk you could lose.

2) 2.15% of $15,000 is $322. Why would you want to give this much money away to your processor, especially given the risk of #1.

For this amount, you are better to request a check or wire transfer from your client.

I would never even attempt to process such a large amount using credit card, even if it was possible. I don't blame your processor for not accepting this risk, although I think cancelling your account is a little harsh and it makes me wonder if there was some other reason.

Anyway... good luck! Most reputable processors listed in this thread aren't likely to allow you to process such a high amount without some pretty serious money backing your business. Remember that THEY are at risk, too....

Im sure some processor will setup a reserve account just in case a charge back happens. Thus it'll protect the processor if a chargeback does occur. However, anything above that amount its a good idea to use bank wire or cashier's check.

2.15% of $15,000 is $322
Either way you look at it, 2.15% is 2.15%. Doesn't matter if he charges the $15,000 at once or over one year, virtually same processing fees. I agree though, such a large transaction is best to do by certified check or a bank wire.

- Matt

Originally posted by mainarea
Either way you look at it, 2.15% is 2.15%. Doesn't matter if he charges the $15,000 at once or over one year, virtually same processing fees. Ya, but the point is that he doesn't have to do it by cc over multiple transactions.

He isn't processing 100 small transactions with 100 customers where he has no choice but to accept cc. He is processing 1 big transaction with 1 customer. If I have that option, I wouldn't throw away $300+.. especially given the fact that the customer can issue a chargeback for whatever reason he feels like. I sure hope it isn't on Amex.

Originally posted by mrzippy
I sure hope it isn't on Amex.

Originally posted by IdealBandwidth
They were also using AMEX, with which we verified the information as belonging to the card holder.

It was :)

Amex = not good for merchants.

I have a friend who had a customer issue a chargeback after 1.5 years.

1.5 years!!!

Amex just went ahead and issued the chargeback. They never even contacted my friend. He had a signature (faxed) and a signed TOS, and when he contacted Amex they told him it was their policy to allow the chargeback since he did not have an original signature. Pretty stupid, considering they never even asked him if he had an original in the first place...

:angry:

Amex has terrible "protection" for merchants. I always use amex when I buy something online.

Originally posted by mrzippy
Ya, but the point is that he doesn't have to do it by cc over multiple transactions.

He isn't processing 100 small transactions with 100 customers where he has no choice but to accept cc. He is processing 1 big transaction with 1 customer. If I have that option, I wouldn't throw away $300+.. especially given the fact that the customer can issue a chargeback for whatever reason he feels like. I sure hope it isn't on Amex.
Well most people just pay by CC these days - easy eaccounting practices. I am sure that he would much rather have the business since the processing fees are just a cost of doing business and most people figure the processing fees into their charges already.

Originally posted by coreybryant
Well most people just pay by CC these days

I disagree. Depends on the company, etc.. I would say that the majority of our corporate clients pay by paper invoice and check. In all cases, they contacted us and asked for this option. (We allow this only for corporate customers who are paying over a certain threshold.)

Originally posted by coreybryant
I am sure that he would much rather have the business since the processing fees are just a cost of doing business and most people figure the processing fees into their charges already. If I had to choose between accepting a $15,000 credit card charge on Amex or not keeping the client...

.. I would tell the client to go elsewhere. While the transaction cost might be part of the expense of business... the risk cost of having a $15,000 transaction that might get reversed by Amex at any moment even after 1.5 YEARS is just crazy. Risk management is also part of business, and that is one risk no smart business owner should take without some serious protection in place.

Especially when there are so many easy alternatives. (Like wire transfer, send a check, etc..)

Seems you do not like AmEx :) Guess they are not one of the cards you accept? Everyone is different. Most business plans I have seen usually take the CC charges into consideration.

Fortunately, the risk part is trying to be handled by other companies & hopefully will be able to prevent a lot of these types of chargebacks in the future.

First, thanks for the mention, Dan & Mark. :)

With respect to the topic at hand... a $16,000 sale is a very big liability for ANY merchant processor to take on. It is also the kind of transaction that will raise red flags with just about any risk department.

The reasons are as follows:

1) If that sale is charged back, it would likely lead to a $16,000 loss for the processor if (a) there weren't sufficient funds in the merchant's bank account to cover it and (b) there weren't any funds in reserve that could offset it in part or full.

2) The merchant processor doesn't control the merchant's business... so the merchant processor has no clear cut assurances that the products/services will be delivered to the satisfaction of the customer for the duration of the contracted amount.

3) There are always unexpected situations and factors that can arise in any situation. A business supplier could go out of business, there could be a connectivity issue that causes the customer to become upset and charge it back, any number of possibilities.

4) A single major hit can wipe out the profits generated from many hundreds of accounts. Merchant processing is NOT a high margin business, with a majority of all revenue being paid back to the issuing banks, VISA/MC dues & assessments and network/service costs.

Thus, adept risk management is important in order to run a profitable and successful ISO/MSP or bank acquiring division.

In terms of underwriting accounts with large ticket sizes, the financial strength of the company and principal(s) are usually going to play key roles in determining if a merchant could absorb the loss of a chargeback of the max ticket amount being requested.

It is also important to always check in advance before you run through a huge sale that is above your established parameters.

This way you can avoid a lot of the common issues that can otherwise happen with just about all merchant processors. It isn't that these companies want to hassle you or hold funds - they are just trying to protect themselves and minimize the inevitable losses that they take each month due to chargebacks.

Anyways... the last point that is worth mentioning is that personally, I wouldn't want to take a $16,000 sale on credit card.

You will save a LOT of money by taking it via check, wire, etc. and you won't have the possibility of a chargeback looming over you in the event that your relationship with that customer goes awry at a future date.

It may sound odd for someone in the credit card processing business to say the above - but that's my advice to you on any sale of that size.

Originally posted by coreybryant
Seems you do not like AmEx :) Guess they are not one of the cards you accept? Everyone is different. Most business plans I have seen usually take the CC charges into consideration.


Actually, I love amex.. as a consumer. As a merchant, I hate it.

I currently still use paysystems for our cc processing, so I do accept amex... but if I had a choice I would not.

I am not just talking about the cc charges.

I am talking about the ongoing risk of having a $15,000 credit card charge reversed simply because one customer decides he doesn't like you any more. Amex has a "no questions asked" policy of chargebacks requested by the consumer, and that is a MASSIVE risk to any merchant.

While I trust most business plans have contingency in place for evaluating and carrying such a risk... if it is possible to avoid the risk altogether, then why not? (ie: simply ask for bank check or wire transfer instead.)

It isn't just about the credit card fees, as to why I would not accept this transaction. it's about the $15000 that could be yanked from you at any moment.

I agree with you on that fact - never said I didn't. I was just trying to put it into prospective for IdealBandwidth. I see both sides clearly. I do not blame him at all for accepting that payment. But the lesson learned & something I have said over & over, if you are going to process something out of the ordinary, call the processor first. Most will work with you.

mrzippy, we had the original contract postal mailed back to us, so we had the original contract.

also, a lot of our clients pay via amex, we arnt a cheap company, and the people buying services from us, are the ones who have money to throw around... with personal amex bills in the range of $60k/month ... so we have to cater to them.. my own personal american express bill is usually $10-$15k, so i know the benefits of offering amex processing.

in anycase, we found a processor who is willing to take us on and let us take these transactions via cc.

Originally posted by IdealBandwidth
in anycase, we found a processor who is willing to take us on and let us take these transactions via cc.

Excellent. I'm glad there was a good ending to the problem for you! Do you mind if I ask who is the new cc processor? I'm sure anyone who has a similar problem in the future might like to know this information.

:)