Ugh. Please read through to the end, I'm posting the details on top, and the questions at the bottom.

Cardservice (aka, LinkPoint) just terminated my account, effective on Monday, Feb. 5. I just received the letter on Thursday (Feb. 1) - how nice of them to send it 2nd day delivery (not even overnight it to me, or call, or e-mail)!

When I called to see what the problem is, they said it was because I (allegedly) sold Salvia Divinorum (an herbal plant that is known for its hallucinogenic properties.)

I sell a variety of herbal products. At one point, I did sell Salvia, but about six months ago there started brewing some controversy over the plant, and so I removed it from my website. The timing of the removal also correlated to when I opened my merchant account with LinkPoint/Cardservice.

Fast forward to this past week. On Sunday (Jan. 29), I submitted a (unrelated) support question to LinkPoint, asking about how I can go about changing my DBA name (I'm in the process of changing domain names to something better.) I didn't get a reply to that question - just the termination letter on Thursday.

I called to inquire about the termination, and that's when they told me about Salvia. I replied that I didn't know what they were talking about, as I don't sell Salvia anymore. I asked them to look at the catalog on my website. They said it showed up in a search. At first, I thought they meant Google. But then I realized they meant the search function on my website.

Well, it turns out that when I removed Salvia from my shopping cart, I just disabled the category from my catalog. I thought that was all I needed to do. Little did I realize, the product still shows up if you use the search feature of the cart. Argh. I don't know if that is a bug in the shopping cart (VirtueMart), or if the behavior is as designed, but in any case - it was unintentional. I don't even have any Salvia to sell.

I tried to explain to Cardservice that it was just a mistake, possibly a bug in the shopping cart, but to no avail.

The thing that gets me, is that Salvia isn't even listed as a banned product with Cardservice. You would think that if they decide to ban something, they would at least notify merchants first, and give them a chance to comply? And what's worse, in my case, I wasn't even selling it at all. It was a mistake that it even showed up in the search function of the shopping cart.

My agreement with Cardservice says that they can terminate at any time with no notice, but there is also the implicit understanding that contracts are entered into under the principle of good faith. Given that I haven't violated any of their rules - and don't even sell the thing that triggered the termination - it sure seems like a screwover to me.

And let me add: I have had ZERO chargebacks, not a single disputed charge. Because of this, they did agree not to hold any funds.

--->ANYWAY, here are my urgent questions:<---

Note: I'm fairly clueless how this whole merchant account thing works. Basically, I signed up for a merchant account through MerchantLane.com. Within a couple of days, I had welcome messages from LinkPoint, and then received a welcome kit from Cardservice, followed a few days later with welcome kits from Amex and Discover.

Questions:

1. I at first thought that I could just switch to another gateway provider, like Authorize.Net. So I signed up with them on Friday. Then they asked for my merchant ID and terminal ID. I gave them my LinkPoint info, but they said that wasn't the right information. They said I should call First Data, and also find out if it is the "Nashville" or "Omaha" platform.

2. But then I noticed that First Data owns Cardservice??? So does that mean I'm totally screwed as far as this merchant account goes?

3. Where does Wells Fargo fit into all of this? And how does this affect Amex and Discover? I guess I was thinking that Wells Fargo was the actual "merchant account", but after doing some reading, I'm very confused as to who does what.


Help, I'm desperate!

Mike

First of all, feel lucky they gave you any notice. That usually doesn't happen. Plus the fact that they didn't seize your funds for 6 months or more is a nice break. They could hold that money to cover their butt for chargebacks if they wanted to even though you haven't had any yet.

1. I at first thought that I could just switch to another gateway provider, like Authorize.Net. So I signed up with them on Friday. Then they asked for my merchant ID and terminal ID. I gave them my LinkPoint info, but they said that wasn't the right information. They said I should call First Data, and also find out if it is the "Nashville" or "Omaha" platform.If they are closing down your account you need to establish a whole new merchant account fast. The information you are trying to give Authorize.Net will be void on Feb 5th. Without a new merchant account you're screwed.

2. But then I noticed that First Data owns Cardservice??? So does that mean I'm totally screwed as far as this merchant account goes?Yes. You need to find a non-CardService International company to establish a merchant account for you.

3. Where does Wells Fargo fit into all of this? And how does this affect Amex and Discover? I guess I was thinking that Wells Fargo was the actual "merchant account", but after doing some reading, I'm very confused as to who does what.Amex and Discover will be unaffected. Just give your merchant IDs to your new provider and that will be a seamless transition. Not sure how Wells Fargo came into play for you. Did you sign up through them?

Needless to say you have to get started on establishing a merchant account. Come Monday you will be shut down and out of business until you do.

First, nothing terrible has happen. I see no reason for panic. CardService Int. is not the best merchant account provider. I'm sure you can find something better if you shop around.
If they closed the account, there is no point in switching gateways since your associated MID is also closed and you won't be able to activate it anymore.
LinkPoint is a proprietary gateway of CSI/FirstData and store number that you have there has no system value for any payment gateway. You need a real MID and TID numbers from your acquirer.
Basically you need to start from the beginning and shop around for a new merchant account.

I'm sure Corey here will shed some light and expertise of handling this situation.
If you want to know my opinion, getting out from merchant account relationship without any funds held and at no cost is a very rare case this days. I'd say "thank you" and moved on.
Good luck with new merchant account.

I agree - no held funds is a good thing. And actually - depending on the rates you were paying, this might have been a sign to look for better things :-) I used to have a CSI account in 2001-2004 and I was paying way too much through it. Major changes now.

I also just finally dropped my Merchant Account with United Bank Card. (CDG Commerce Sells for them, but I had a direct account) Now all my dead weights gone and my new processor has been flawless thus far.

Hi all,

Thank you for the replies, it is very much appreciated. A few follow-up questions:

1. Since First Data (aka, Cardservice) is one of the payment processors that Authorize.Net uses, does that mean that I should apply for a merchant account through someone else (to make SURE that First Data isn't used)? And then just give the merchant info to Auth.net when I'm all setup? (The reason for wanting Auth.Net is that it is better integrated with my new shopping cart system.)

(To be clear: Auth.net offers to setup merchant accounts, and they use multiple processors - including First Data/Cardservice. If I tried to get a merchant account through Auth.Net, then they might try to use First Data and find out about my termination - is that a reasonable fear?)

2. Regarding Amex/Discover - Are you guys saying that my 'account' (or whatever) with them is unaffected by this termination? Will they 'know' about my termination? If Amex/Discover is unaffected, then would it be possible to setup Auth.Net to use Amex/Discover ONLY? (At least temporarily?)

3. Where does Wells Fargo fit into all this? I originally applied for my merchant account through MerchantLane.com, which appears to be a Cardservice reseller. I only know that in my Cardservice welcome kit, it said that Wells Fargo was the 'Member Bank'. Bear in mind that I'm rather clueless here, but I guess I thought that Wells Fargo was the 'real' merchant account provider, and that Cardservice/LinkPoint was just the 'pipes'. So my thinking was that couldn't I keep the Wells Fargo part of the deal? But I guess it doesn't work that way!

Sorry for all the questions, I'm just paranoid now. I'm actually afraid to do anything (apply for a new merchant account), for fear of rejection...

Thanks,

Mike

Hi Mike,

In answer to your questions:

1. Yes, you will want to setup a new merchant account with a different processor. Simply ask each processor that you interview whether they work with First Data or not and to ensure a fresh start, sign up with a company that is not affiliated with First Data.

In addition, the simplest thing is to sign up with someone who can establish a new Authorize.Net gateway account for you at the same time. Then you just replace the old info in your shopping cart config with the new AuthNet access info and you are back in business.

Two caveats here - first, I assume that you were not placed on the TMF/MATCH list by Cardservices. But you may want to call them and ask them to be sure as if they did - this will make it very difficult to obtain a new account... but hopefully they did not. Second, make sure that any new processor you are about to apply with takes a look at your Web site to make sure it is an acceptable business type for them. You don't want to spin your wheels applying for a company that will ultimately decline the account anyways.

2. Yes, your Amex/Discover account will not be affected by this. Your termination on the VISA/MC side will have no impact as long as you have not been placed on the TMF/MATCH list.

Unfortunately, I do not believe that Authorize.Net supports an Amex/Discover-only setup as you need to have a VISA/MC merchant account. The VISA/MC merchant account then acts to transport the 3rd party (Amex/Discover) data through to the back-end systems over at Amex or Discover for processing.

It is possible on some systems such as landline terminals with "Reverse PIP" that you can separately transmit your Amex card data, etc. but I do not believe this is supported by Authorize.Net.

3. Wells Fargo shouldn't fit into the picture at all unless you started to sign up with them for a merchant account.

To give you a little background on how it all works:

- ISO/MSP - companies like Cardservices are an ISO/MSP. ISO stands for Independent Sales Organization and MSP stands for Member Service Provider. These companies solicit new business and manage merchant accounts.

- Member Banks / Acquiring Bank - every ISO/MSP works with one or more sponsoring banks, called Member Banks. Member Banks are the entities that work in coordination with the ISO/MSP and actually handle the transfer of funds and the settlement of the financial end of the equation for merchants.

- Issuing Bank - these are banks that issue credit cards to cardholders along with their corresponding lines of credit. These banks handle the financial end of the equation for cardholders.

- Internet Payment Gateway - this is the system that accepts transaction requests on the customer-facing part of the equation and is often integrated into a shopping cart or billing system. This system then passes the data to a Front-End Authorization Network.

- Front-end/Authorization Network - this system takes the transaction requests and routes it to a Visa, MasterCard (or Amex/Discover/JCB) authorization switch which queries the Issuing Bank for an approval or decline. The sales for the date are put together in a "batch."

- Back-end/Settlement Network - this system is the system that then takes the merchant's daily batch and then sends the necessary information through the Visa/MasterCard/etc. clearing systems on the back-end... these systems then ultimately result in the Issuing Banks funding the Acquiring Banks for the net amount of the purchases and then the Acquiring Bank will deposit it into the merchant's local bank account less the agreed upon fees.

Hopefully that info is helpful for you. The best step for you right now is to look for a new merchant processor who is not affiliated with First Data, who can provide you with Authorize.Net and who is willing to look at your Web site to make sure the content is something that can be approved... and once done, you should be good to go very quickly!

You might want to check about the Discover process though. Currently First Data now groups Visa / MasterCard / Discover into one since First Data signed a deal with Discover. You might need to get a new account with Discover.

If you know your agent, contact them - a lot of times they can help you with this matter. Since some processors won't even support herbal products

I looked throught the postings here and didn't see the question answered, so I figured I would ask. When CSI terminated your account, were you placed on the TMF / Terminated Merchant File?

Based on the situation it doesn't seem like they would have any authority to put you on this list, however it's a question we would need to know prior to being able to recommend a proper strategy for you to get setup with another account.