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  1. #1
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    RevECom (or 2CheckOut) vs. Mechant Account/Authorize.net?

    Okay, I appreciate the feedback on RevECom vs. 2Checkout.

    Now, why would I want to use these services over getting a merchant account through my bank and going through authorize.net?

    --Bruce

  2. #2
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    Im also interested to see whats posted here.
    Matt Wallis
    United Communications Limited
    High Performance Shared & Reseller | Managed VPS Cloud | Managed Dedicated
    UK www.unitedhosting.co.uk | US www.unitedhosting.com | Since 1998.

  3. #3
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    Can only speak for revecom. So far 10/10

  4. #4
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    Revecom/2CheckOut have lower fees and are arguably better for small amounts of transactions. But, with those companies the charge shows as Revecom/2CheckOut instead of your company name, like it would with Authorize.

    I think someone here figured it out a while ago and the income cutoff for profitability was around $1000 per month. Anything under, go Revecom/2CheckOut. Anything over, get a real merchant account.

    I have 2CheckOut and havent had many problems, and no problems that couldnt be rectified quickly.

  5. #5
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    Revecom:

    Payment Processing Fees
    Commission: 3.95%
    Transaction Fee: $1.00

    does that mean EACH transaction has $1 and 3.95% commission taken off.. so if someone is paying for a $5 a month package it works out quite expensive to use this method ?
    Matt Wallis
    United Communications Limited
    High Performance Shared & Reseller | Managed VPS Cloud | Managed Dedicated
    UK www.unitedhosting.co.uk | US www.unitedhosting.com | Since 1998.

  6. #6
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    There are a few distinctions between an account with someone like Revecom and an account with someone like Authorize.net.

    First of all, with Revecom, you do not have your own merchant account. You are sharing their account with all their other customers. So when your customer receives a cc statement, it will say "PaySystems" on it, not your company name. One potential problem is that you may see a higher incidence of chargebacks. People are forgetful. If they have 20 charges on their statement, they may not make the connection between PaySystems and your company name. Even though you may state it on your payment page, people forget. So when they see a charge for PaySystems, they may think it was an unauthorized charge, and then issue a chargeback. With Authorize.net, with your own merchant account, the cc will read "YourCompany via Authorize.net".

    Secondly, and this is a biggie, with Revecom, since you are using their merchant account, if they ever go belly up, you're out of luck for getting your funds. You will not be entitled to any unpaid funds sitting in your account. Although, since they pay out weekly, it may not seem like such a big issue. However, don't forget that they hold back 5 - 8% in a reserve fund for 6 months. If you are doing any kind of volume, this could be a significant amount of money that would always be at risk. On the other hand, if you had your own merchant account with Authorize.net, if they went belly up, you could go directly to Visa/MC/etc and retrieve your money, since you are the recognized merchant on account.

    Third, Authorize.net will have monthly fees, whereas revecom does not. Also, their discount rates and transaction fees are different.

    Here's a little twist for you. It is not on their site yet, but you are now able to get your own merchant account with Revecom. They now make a distinction. A "Billing" account is like it's always been with Revecom. $1.oo transaction fee, 3.95% discount fee. But now they will offer you an "IMA" account where you can get your own merchant account status. With IMA, you can have "YourCompanyName via PaySystems" on the cc statement. You also do not have to worry about losing any of your money if they close their doors since you now have your own account. With an IMA, your transaction fee is $0.35 and the discount rate is 2.50%. However, the kicker is that there is a $25 monthly account fee, and a $25 gateway fee.

    Dollar wise, it is a straight mathematical calculation based on your sales as to which one is best for you. What you need to consider, though, is your comfort level regarding your money always being at risk with a "Billing" account.

    Food for thought.

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  7. #7
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    Aug 2002
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    Rax and vito - thanks for your helpful responses.

    I think I can do the math on these.

    Does RevECom and 2Checkout offer any other service that I would have to pursue another way if I had my own merchant account? Recurring billing is one that comes to mind....

    --Bruce
    Bruce Vander Werf
    ChurchAssist Technologies
    http://www.churchassist.com
    Web Hosting & Software for Churches

  8. #8
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    More food for thought - some automation programs, ie H-Sphere, only have systems in place to process charges throught merchant account gateways, not third-party billing companies.
    Peachtree WebWorks, LLC
    http://www.peachtreewebworks.com

  9. #9
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    Originally posted by bvanderwerf
    Does RevECom and 2Checkout offer any other service that I would have to pursue another way if I had my own merchant account? Recurring billing is one that comes to mind....

    --Bruce
    I'm not sure, but are you asking if you can set up recurring billing with a Revecom account? If that is your question, the answer is yes. When looking at different companies, keep in mind that they oftentimes have different settings. For example, with a Revecom account you can set up recurring monthly/quarterly/semiannually/annually. On the other hand, with someone like MultiCards.com, you only have a monthly/quarterly option (at least that's what it says on their site: http://www.multicards.com/services_offered.html ).

    Hope that helps.

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  10. #10
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    Also keep in mind that if you have an affiliate program or a shopping cart, it is best to first find out if they will easily integrate into the system that you choose for processing cc transactions.

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  11. #11
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    Aug 2002
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    Okay Gadget - it looks like you've introduced another variable into the equation.

    What do you mean by 'automation program' and where can I find out more about 'H-Sphere?'

    --Bruce
    Bruce Vander Werf
    ChurchAssist Technologies
    http://www.churchassist.com
    Web Hosting & Software for Churches

  12. #12

    2checkout.com is good!

    I have used 2checkout.com for about 8 or 9 months now. I use them to bill for my hosting accounts with recurring billing. I would recommend them to anyone. It seems to work out ok for hosting, but if you have larger ticket items, you end up losing too much.

    Very easy system to set up and manage. You can login anytime to view reports on billing and your charges.

    Hope this helps!

  13. #13
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    By automation, for example, I mean a hosting billing program. H-Sphere is a total control panel package that includes billing. It can automatically charge customer's accounts. ModernBill is another example.

    These programs run the server and can send out charges via gateways. Some of them can use third-party processors like 2CheckOut, but others require a real merchant account.

    I guess just make sure whatever your total solution involves that all the pieces can fit together!
    Peachtree WebWorks, LLC
    http://www.peachtreewebworks.com

  14. #14
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    any comments on hostcharge?
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  15. #15
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    I'm currently doing research myself and something else to note with RevEcom is that they charge $10 US for each wire they do (to bank accounts outside the US). You can set up your account though, so that you only receive money once a certain limit is reached.

    Can't tell you much about hostcharge.

    - Kurieuo.

  16. #16
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    They do charge $10 for every wire transfer. But I guess you can always opt for a cheque by regular mail. I suppose it depends on where you are located geographically as to how mail delivery will affect you. If I were to set up with them, it wouldn't bother me as I am in Toronto, Canada and they mail the cheques out from Montreal, Canada (about 300 miles away), so I would likely get it in a couple of days after mailing.

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  17. #17
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    Jul 2002
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    Hello All.....

    Are there any other companies besides 2checkout.com or Hostcharge that DO NOT charge a monthly statement fee, gateway fee, or whatever else... For small plans or with little revenue, I'm sure those fees can add up...



    Secondly.. what happens when you want to close your account with them? Are you able to get your funds (including the reserve funds) quickly?

  18. #18
    Join Date
    Apr 2002
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    32
    [QUOTE]Originally posted by vito
    With an IMA, your transaction fee is $0.35 and the discount rate is 2.50%. However, the kicker is that there is a $25 monthly account fee, and a $25 gateway fee.


    Vito
    [/QUOTE

    Hi Vito, you said that this info wasn't on the site, so I didn't look. Can you tell me what a gateway fee is and if it is monthly or a one time charge.

    I've learned more about merchant accounts from this one thread than I did doing my own research. Thank you to everyone that contributed to this thread.

    Thanks
    Indera

  19. #19
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    Companies like Authorize.net and Revecom provide a gateway which is needed for you to be able to process orders online. When Revecom charges you a gateway fee for your IMA, it is a monthly recurring fee, just like the account fee. So you're paying $50 per month flat fee regardless of the # of transactions. It may seem high, but considering their low transaction fee and discount fee, if you're doing a larger # of transactions per month, you could really save alot.

    And you're right, it is not on their site yet. Brand new product. I was talking to someone at Revecom a couple of days ago and they explained the new IMA to me. If you want to talk to their sales staff, call them toll free at 866-699-9022. They're located in Montreal, Canada. I think they start answering phones at 9AM EST.

    Hope that helps.

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  20. #20
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    Originally posted by Layzee
    Hello All.....

    Are there any other companies besides 2checkout.com or Hostcharge that DO NOT charge a monthly statement fee, gateway fee, or whatever else... For small plans or with little revenue, I'm sure those fees can add up...

    Secondly.. what happens when you want to close your account with them? Are you able to get your funds (including the reserve funds) quickly?
    I don't believe Revecom charges a monthly statement fee for "Billing" accounts, do they? I don't have an account with them, but I'm pretty sure that with a "Billing" account (not an IMA where you have your own merchant account), you just pay a transaction fee and the discount fee when you actually make a sale.

    Regarding what happens when you cancel, the only experience I have with that is with a merchant account that I closed about 5 months ago. I owned a retail gift site for a couple of years. I sold it in March, so I cancelled the merchant account for it. Normally, your cc processor will keep 4-10% of each sale for 6 months (to protect against chargebacks and refunds). After 6 months, they release it to you. So after your first 6 months, each month you start getting the holdback from 6 months prior. When I closed the account in March, I figured that each month for the next 6 months I would get a payment for the holdbacks as they matured. Was I surprised to hear that when you close an account, they hold everything for another 6 full months!!! That means that Oct 2001 holdback, that I should've received in April, was going to be held for another 6 months! Keep in mind I use InternetSecure, so other companies may have different regulations.

    I really put up a stink, but it did me no good. When I signed the contract, I didn't see that clause, but it's there. So I have to wait until the middle of October for a pretty large sum of money (about $6000.00) that I expected incrementally over 6 months.

    Lesson: Read the fine print.


    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  21. #21
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    Jul 2002
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    Thanks for the response Vito... and that really sucks that they held all your funds after closing your account. 6 months is a long time to wait....

  22. #22
    Join Date
    Dec 2001
    Posts
    539
    From the perspective of the processing company:

    Once you close your account, all the sales you've had for the prior 6 months become a liability. If they were to pay out all your sales on account closure, and then 5 months down the road your hosting company closes (for whatever reason), or you fail to provide the support you agreed to....the customer is going to request a refund from their CC company, and the processor is left with the expense.

    Our policy is not the same as Revecom's, but I understand their reasoning.

  23. #23
    Join Date
    Mar 2002
    Posts
    154
    I think someone here figured it out a while ago and the income cutoff for profitability was around $1000 per month. Anything under, go Revecom/2CheckOut. Anything over, get a real merchant account
    Actually it's much lower than $1000, especially if you have a lot of little $5 monthly transactions:

    Most Authorize.net resellers are currently offering something like this:

    $0-$100 Setup
    % 2.15-2.35
    Per Authorization Fee $0.20-$0.31
    $10 gateway fee
    $10 statement fee
    $25 monthly minimum
    *careful of hidden charges: $5-100

    Since a lot of the Authorize.net resellers are currently offering free setup as opposed to $50 from 2checkout or Revecom you'll realize that a real merchant account is in most instances better.

    Example calculations:
    $100 = 10 items @ $10 each

    2checkout:
    $100 - (100x0.055) - (10x0.49)= $89.60
    Revecom:
    $100 - (100x0.0395) - (10x1.00) = $86.05
    Wells Fargo Authorize.net:
    $100 - $29 - (100x0.0235) - (10x0.31) = $65.65

    $200 = 20 items @ $10 each
    2 $180.20
    R $172.10
    W $160.30

    $300 = 30 items @ $10 each
    2 $268.80
    R $258.15
    W $255.00

    You can see that at $300 the Authorize.net merchant account starts leveling out with the others. In this case I used Wells Fargo, which may be a more expensive option than other Authorize.net resellers, because they have a simple $29 monthly rate (no real hidden fees except that AmEx, Discover + $0.30 per transaction) http://www.wellsfargosecure.com/wpa_pricing.html . I talked to a salesrep at charge.com who was adamit that I pay $195 for a virtual terminal purchase, which I did not need, so be careful of hidden fees.

    Also, I used a fairly large package (compared to your avg. WHT host) @ $10 dollars if you lower that to $5:
    $300 = 60 items @ $5 each
    2 $254.10
    R $228.15
    W $246.00

    you are pretty much level with 2Checkout and already bettter than Revecom. (The $1 transaction fee really hurts smaller transactions with Revecom.)

    The one thing to remember with a merchant account is that they require a business checking account and to get that your bank requires a business license, so this may add to the initial investment.

    If you are looking for a cheaper merchant account with a few less features you might want to checkout http://www.echo-inc.com .

    Good Luck with your new venture!

  24. I like ProPay... as long as their weird fees don't hit you, they are good! I am still deciding but I have a friend with them and he says they are good... very good / fast support...

    http://www.propay.com

  25. #25
    Thanks Jazz for the calculations! ;o)
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