Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : Merchant Account: no yearly billing?

[2Grumpy]

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 or maybe

[insiderhosting]

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

[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.

[Tina J]

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

[2Grumpy]

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".

[netfido]

My merchant allows yearly billing.

Card Service

[KelownaHost]

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

[AlaskanWolf]

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.

[akashik]

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

[xtraordinary]

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

[akashik]

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

[BurstNET]

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

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


Sean R.
BurstNET
System Administration

[AlaskanWolf]

your link doesnt go anywhere....

[labzone]

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.

[Comm1Biz.net]

burstnet meant this link:

Click to go to that specific thread 94417