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  1. #1
    Join Date
    Sep 2003

    Very Small Business - 3PP vs Merchant ?

    Hi, I was just curious on what people thought would be best in terms of payment processing for a very small business with very low income in the end.

    From perusing this board, it seems on the surface people recommend a 3PP like 2Checkout or PayPal if sales are under $1000/month. However, am I stupid in having the feeling that a full merchant account, if only for customer assurance, may be valid even if making significantly less than the $1000/month threshold? To me, it just seems a bit unprofessional in appearance to have PayPal as the main processor, or really any 3PP, in which you must send the customer to the 3PP's web site in order to enter CC info.

    I'm not trying to insult any smaller businesses here that may use a 3PP as their main blling solution, but I'm just curious since this applies to me also. I've been hosting just a few sites for acquaintances for the past few years, but I intend a more "public" opening soon. My intentions are to remain small, but possibly add a few people along for the ride. I'll be using a partial HSphere server in the end, so I'm limited to what gateways they support. To be honest, I'm not sure if I'd ever turn a profit in the end, but the losses would be small anyway and I don't mind as I need to host my own sites anyway.

    Regardless of staying small, I wouldn't want to look that way. Am I just an idiot for thinking that it may be worth the extra money/loss for something as simple as this? Just curious if it may or may not be worth the $25/month for CDG or whatever the monthly minimum cost for e-onlinedata, or whoever, for something such as this. Possible intrinsic value?

  2. #2
    If you can get a merchant account that is the way to go. The problem for many small operators is that they cannot get a merchant account. This is especially true if you happen to be outside the EU, USA, Canada or Australia.

    We have just obtained a merchant account via or bank in the UK and it was easy to convince them. The word "Internet" has them running for cover.

  3. #3
    Join Date
    Jul 2003
    Castle Pines, CO
    Do you due diligence, and compare what you think you might spend with a 3PP and what you might spend with a merchant account processor.

    With a merchant account processor (MAP) and doing about $1,000, you are looking at probably about 4.8-5.8% in fees. All depends also on any extra services that you might purchase from the gateway or MAP.

  4. #4

    Re: Very Small Business - 3PP vs Merchant ?

    [QUOTE]Originally posted by Tetsuo123

    "I intend a more "public" opening soon. My intentions are to remain small, but possibly add a few people along for the ride'.

    Your intention is little confusing: People want to grow their business and expand accordingly; I quite don't understand actually what you're looking for?

    At this juncture, I think 3PP might be a good solution for you later you can look for a merchant account.
    Last edited by etechsupport2; 10-11-2005 at 11:51 AM.

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