I'm getting ready to get a merchant's account. I sent an app to (see AlaskanWolf's sig) and talked to a guy on the phone, and he said that they (Visa I think he said) will absolutely not allow me (or any small web host) to bill for YEARLY web hosting.

Is this typical? I don't truly mind, I much prefer monthly as it keeps the cash flow a bit more steady, but I feel like it's just a de facto standard to offer yearly billing.

I'm a total newb to merchant accounts so if this is a stupid question feel free to use the appropriate smiley :stickout or maybe :rolleyes:

Greg-
Yes I believe that this is standard now a days for the smaller hosts out as well as the smaller companies in general who don't have any kind of repore with their banks and merchant providers. They do this to help insure that little to no chargebacks are issued against your account. Once they see a pattern of stability they will usually allow you to accept payments on a quarterly then semi-annually then yearly basis. Initially this looks to be a disadvantage to the smaller companies but as you said in your post, it is an advantage because of the chargeback issue along with the cash flow issue. By the way Gary's rates look very good, good luck.

Hope this helps
Steven

Couldn't you just charge them the price for the quarter or year? It wouldn't be recurring but I don't see a problem in that.

Yes, this is typical and its also the reason why I quit using ECHO.

I am now paying a bit more in fees/discount rate with EMS, but overall it ends up being cheaper. With ECHO (who has some of the cheapest rates in the industry) I was getting socked with a per transaction fee...and they required that I charge my customers monthly. Since some of our packages are barely $2 per month...you can imagine how devastating that policy was!

Anyway, EMS is more expensive, but they allow annual charges and I have been totally happy with their services (been with them for a little more than a year). I had too many chargebacks (1.8%) and EMS froze my funds for about 2 weeks until they could review my case...other than that, no problems.

--Tina

Originally posted by Andyc
Couldn't you just charge them the price for the quarter or year? It wouldn't be recurring but I don't see a problem in that.

The yearly is no big deal, just use 2checkout for yearlies until they let me do it through the merchant account. Just wondered if this was "normal".

My merchant allows yearly billing.

Card Service

Originally posted by netfido
My merchant allows yearly billing.

Card Service

I am able to do recurring billing on a 360 day cycle with my Revecom account. Also I can do 15, 30, 45, 60, 90 and 180 day cycles.

DPerley

Hi Gary

The specific company in question is called Total Merchant Services, I will be talking to Chad tomorrow about the issue of maybe sending hosting companies to another bank aside from TMS.

There is a simple way of getting around it (during the merchant account process) because unlike maybe Echo, normal merchants could care less what you do each month after the initial account is reviewed and setup, which is self explanatory ;)

Email me tomorrow and I should hopefully be able to talk to Chad to send you to another bank if that's what you prefer instead.

pretty normal I think. I buzzed Planet Payment about it when we applied and got the same as the above. Monthly for a period of time till you show a record of transactions, then you can apply to have the periods extended.

We actually changed our pricing from 1,3,6,12 month to just monthly in preparation for the move to them, but haven't gotten around to it yet. Revecom just makes billing too easy. They do make some things painfully difficult from a merchant's point of view though, so will be making the move soon

Greg Moore

The reason they are doing this is that if a hosting co. takes an annual payment and then goes bust the credit card company is on the line for providing a refund for the rest of the year's service.

Given the multiplicity of small hosting companies, some of which will inevitably go out of business, this would seem to me to be quite a high risk area!

While this may be a pain, in the long run I'd rather be with a merchant provider that's managing its risk properly.

Andrew

Originally posted by xtraordinary
I'd rather be with a merchant provider that's managing its risk properly.

Exactly. When it comes to billing and payment processing it's not a good idea to go for the first and cheapest solution you can find. At the end of the day, if your billing gets roasted you're in as much trouble as having your servers start to smoke in the racks. I feel a little more confident in their ability when they decide to err on the side of reason rather than letting things get out of hand.

Greg Moore

Run away from Total Merchant Services as fast as you possibly can:

http://www.webhostingtalk.com/showt...&threadid=94417


Sean R.
BurstNET
System Administration

your link doesnt go anywhere....

Originally posted by AlaskanWolf
your link doesnt go anywhere....

Sean.. another reason why you shouldn't repeat the same message over and over again. Now you have to go through all those threads and do some editing. :emlaugh:

burstnet meant this link:

Click to go to that specific thread 94417 (http://www.webhostingtalk.com/showthread.php?s=&threadid=94417)

If you want to charge people the amount you want for the timeframe you want why not simply sign up for a real merchant account and gateway (ie auth.net?) It might cost a little more in terms of monthly costs (though less, per transaction), but you are in control.

-David

Er

that's what I'm talking about, TMS (using auth.net as you mentioned) made me remove ALL yearly links from my web site and not do yearly billing for web hosting.

2checkout etc are only too happy to let you bill by the year or whatever you want :)

Many do not allow you to charge 1 year in advance as they get too many complaints from people who pay for a year and 4 months into the provider goes out of business then they go back to the credit card company.

One way to get around this is say if you want to charge $10 per month. If they pay 1 year up front they get a free month. This means a year will cost them $110. You could charge them $110 for the first month and then offer 11 months free. This is just symantics but should get around that rule.

Just a thought.

> TMS (using auth.net as you mentioned) made me remove ALL
> yearly links from my web site and not do yearly billing for web
> hosting.

Sorry, I'm not familiar with TMS, but they don't seem to offer the kind of auth.net account I am suggesting? I hope I'm not confused here, but you said that they are telling you how you can charge people. My auth.net account doesn't come with any such restrictions. I charge who i want how i want when i want. I use the billing code i wrote to charge people, using the auth.net gateway. I control the entire purchase experience.

This sounds different from this TMS service, no?

-David

I believe he means it is not an actual restriction on the authnet gateway... It's a restriction on the actual merchant account. You can still charge however much you want through the virtual terminal and there is no way for them to tell if that is a monthly / yearly amount.

The thing that some merchant banks do is check your web site to make sure you don't offer yearly payment. They'll not let you process transactions untill you remove all yearly payment options from your site.

Note - authorize.net is a completely different company from any merchant bank. Authnet just does the gateway... it is up to the merchant bank to set rules regarding what you can and cannot charge through the authnet gateway... :D

OK that makes sense.

The system I resell comes with a Wells Fargo merchant account. They don't "check up" on you as far as I know. Maybe if you got a bunch of chargebacks they'd give you a call, for your own good. ;)

-David