Need merchant account advice - seemless eBay integration!
Hey guys, just spent a couple of hours browsing/searching this forum, and couldn't find the exact answers I'm looking for. So, here goes:
I run an eBay business that does about $25K/month in gross sales, with 98% of my sales coming from eBay, and the rest coming from my website. I'm sure some of you have heard about the growing discontent with PayPal and its new policies (specifically the 21-day hold thing). I also don't like the fact that they clearly favor buyers over sellers when it comes to disputes. I sell high-dollar items (guitars that range from $1500 to $6000 or $7000), so one mishap could be horrendous for me. So far in the last 3 years I've only had a couple of minor incidents involving PayPal and their policies, but I know that the "biggie" is inevitable, so I'd like to switch now. I'm an LLC, I have a business license, business bank accounts, all that good stuff.
I'd like to set up a merchant account, but I want it to have seemless eBay integration. As in, the buyer wins the item on eBay, and they use the "Pay Now" link under My eBay to get to my merchant account. I realize that there are a lot of solutions out there that will let me e-mail an invoice to the buyer, or have them do it through my website, but I would really hesitate to do that, as most people are already nervous about buying a $3000 guitar on the internet. It would make them feel more comfortable to be directed to payment by eBay, rather than an e-mail from someone who from their point of view might not be the real seller. In other words, I need to have something that works just like PayPal from the buyer's perspective...except not PayPal
Another requirement is that I need to have rock-solid protection against chargebacks, since I sell such expensive items. Basically, if I can prove with signature delivery (which I require on all guitars) that the guitar was delivered, will that protect me against most chargebacks? PayPal has its own set of policies regarding this - all of which I follow to the letter - so I know how to avoid most PayPal disputes. However, credit card chargebacks are probably a different ballgame. Does anyone have any thoughts on how dealing with PayPal disputes differs from dealing with credit card chargebacks? For instance, what happens if I receive a payment and everything looks good and the guitar is shipped, then for some reason there's a chargeback and the card was a fraud or whatever. Am I somewhat protected?
A couple of other random requirements:
-No contracts or termination fees
-Fast deposit into my bank accounts - within 48 to 72 hours would do
-Comprehensive online monitoring and account management
I'm also still a bit fuzzy on how merchant accounts, payment processors, payment gateways, etc. all work together. Will a merchant account allow the eBay integration, or will I need some kind of gateway or cart for that? Also, occasionally I will need to manually enter payments that originate from my website - from what I understand, I'll need a virtual terminal for that.
So...anyone recommend anything? I've read good things about authorize.net, CDGcommerce, and a couple others, but I'm not sure how they all work together, or which ones I actually need to accomplish my goals.
I don't believe there are a large number of banks providing merchant services for eBay businesses, so it might be tough to integrate the way you want. Unfortunately, nothing prevents chargebacks entirely, and you can be on the hook for fraud orders. You should be able to reduce them if you can take advantage of things like 3DSecure, IP address match, AVS, CVV2, etc.
You certainly want signature delivery, even better to have signature delivery only by the cardholder and only at the billing address on the credit card.
Yeah, I use UPS's most secure signature confirmation. So, I could potentially ship a guitar to someone, then have a chargeback filed, and I would lose both the money and the guitar? With PayPal, they at least make you return the merchandise before a refund is issued.
I've seen a few of the merchant account providers mention eBay integration specifically, but none of them go into detail about how it works. Some of them mention "modules" or "plug-ins" - but they don't give details, so that makes me a little suspicious.
That's good to know. I didn't know there were any that even offered it. If its purely a point-of-sale that allows the customer to pass from Ebay straight to your own shopping cart and / or gateway, then it might be something that could have a compatible merchant account provider. Particularly if its a cart that works with a conventional gateway. If its an all-in-one, then you would definitely want to make sure that the underwriters are OK with the business type, before you go too far with it.
Forgive me for some of this, it is one of my standard copy and paste replies that usually seem to help some.
If you are in the United States, you have hundreds of processors to choose from and scores of electronic payment gateways.
Most of these gateways (LinkPoint / YourPay, Authorize.net / Cybersource, Payflow, Quantum, Yahoo!®, etc) that will connect to a transaction processor (First Data, Nova, etc). Some of the transaction processors that have a relationship with the issuing bank and acquiring bank can complete the transaction instead of sending it to the card associations (Visa, MasterCard, American Express, Discover, etc). You might even remember the lawsuit that Visa was suing First Data because Visa was getting cut out of a lot of the transactions because First Data was completing the transaction. Fortunately, that was settled.
The transaction can be broken down into about seven steps
Interchange (V/MC Only)
Interchange (V/MC Only)
The electronic payment gateway will virtually connect your website to a transaction processor.
If you are in the United States, you have a number of options. Getting a merchant account is pretty good if you are doing more than $1,000 a month. One of the bigger reasons is getting your money. Some think this is not important but I have to object. Getting your money is usually the best thing, right? And with a merchant account, your money is deposited into your bank account within 48-72 hours usually after the batch is completed. If you do the math and look at what you might earn if the money if in your interest bearing account you might make money with your money.
The IPSP (Internet Payment Service Provider) like (some versions of) PayPal are relying on your money to earn interest. Some of them will send your money weekly or twice a month, while some will send it only when you request it.
The electronic payment gateways will also offer you an API to process the transaction on your website. This helps with the flow of the checkout process. The user is never directed to another website. You can get a test store from most of the electronic payment gateways but some of the skilled developers think this is unnecessary. And others think it is a great option to have. Now, even some members of Paypal can get this as well.
Now, if you are in the United States, there are some very important pieces of information must be on an ISO / MSP / Agent's website. Let's take a look at CDG Commerce's web site and look at their footer:
CDGcommerce is a registered ISO/MSP for First National Bank of Omaha, 1620 Dodge St., Omaha, NE
and Merrick Bank, Salt Lake City, UT - Members FDIC.
This tells you CDG is a registered ISO/MSP and what bank he is with. An agent will have something like "independent agent office" with a certain ISO.
If you are a member of Sam's Club or Costco, you might check their programs to see if they are suitable. Just make sure to read the fine print and all the legalease.
The electronic payment gateways might charge you a transaction fee - some based on a fixed fee and some a percentage. Some gateways will give you XXXX number of transactions free per month and then charge you. And some gateways will just charge a flat fee (similar to AOL giving away their software so you will use service). It is the gateway that is really important. When the gateway is down - your ecommerce site is basically shut down. Although some gateways offer a way for you to still send the transaction and once the gateway is back up, the transaction will be processed.
Now keep in mind that Authorize.net is not a merchant account provider but an electronic payment gateway. You still need a merchant account to accept credit cards.
The one thing that I wonder about is why no contract? Sure, there are a lot of them out there that are month to month, but it seems that your business is secure. Get a contract to help lock you in a pretty decent rate.
If I were selling on eBay and I was in the United States, I would check out PayPal. They have options set up so that it is a seamless checkout. Now of course, you would need a merchant account and not use their IPSP (so you get you money). This is one of the bigger reasons I tell people to get a merchant account if you are in the United States and are selling more than $1,000 a month. But as previous stated, some don't think it is a decent number. But you can do your math and see how much time you waste going into PayPal and telling them you want your money. Or how much time you have to wait for some other IPSPs wait to send you your money. They are working on that float and having a few million merchants can make for some decent interest.
And most merchant account providers in the United States have an online system that you can use, reply to chargebacks, check when you were paid and how much. Also, you might even see if you can get all your money and pay all the fees at the end of the month. This would mean that if you sold a $100.00 item, you get $100.00 in your bank account, vice something like $97.00. And that might mean you will be able to earn interest on all your money.
Friend, I do not believe what you want exists outside of Paypal really, as least not for the same cost, which is why Paypal blew up so huge. Also, Paypal is now an Ebay company, thus the easy integration standard.
Your best bet is to guide them to a payment page hosted on your website that is tied into a payment gateway linked to your merchant account, but honestly, nothing will protect you like Paypal. that is why they can charge those crazy high rates.
There is little protection for internet merchants from chargebacks. Just being honest. It is tough out there for merchants on the net.
As was said before, your best bet if you must get a merchant account, is to make sure you only accept the signature of the Billing Cardholder at the Billing Address for the Card, and be sure to collect and verify the AVS and CVV when processing the transaction.