They are a third party processor. You need to compare what you might be processing each month.
For example, 40 transactions at $100 would cost you about $238 a month. If you had a merchant account at 2.44% with a $.30 transaction rate, that would be about $110 a month. You would then pay an extra $20 a month for the gateway, statement, customer service fee combined.
In the above scenario - you would be saving about $100 a month. Of course this is just a very small business account. Usually if you are processing over $1,000 a month, it is best to get a merchant account. With a merchant account, you money is deposited into your account within 48 hours. With the third party processor, your money is held usualy until the 1st & the 15th
Do your due diligence & locate a processor that will best suit your needs. Layout exactly what you want - do you need a virtual terminal? Third party processors do not give you that. Do you need a way to batch out your transactions before they are batched on a nightly basis? Do you want to capture the CC data on your own secure website without transferring your customer to another website?
2CO, PayPal and others are certainly options. It all depends on your specific needs as well as where your business is located.
If you need a virtual terminal, your own name on your cardholder statements (as opposed to a 3rd party's label), the ability to keep folks on your site and true control over your billing - and you intend to grow your business... your own merchant account solution will likely be a better fit.
If you are internationally-based and/or are just testing the waters or just need sporadic ability to process a card here and there and you don't need a virtual terminal... then a 3PP may be a suitable option for your needs.
Just keep in mind the total cost of each solution. The setup fee (if there is one) is just a one-time cost so you need to factor in the transactional and monthly costs as well.
And lastly, as Corey mentions - do your due diligence and check out each company before signing up to see what other folks think and to make sure that you get all of YOUR questions answered by the company, too.
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