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  1. #1

    Merchant Credit Card Account Help & Feedback.

    Hi all,

    I was hoping to get some feedback from the community here as I have recently run into a bit of a roadblock in developing my business and am a long-time lurker although I am not a techie by any means.

    My business is an online one in which we bring together buyers and sellers to buy a specific product located in Canada. We do not hold inventory on behalf of the sellers. The products are completely legitimate, it just that we ourselves will be the venue in which the transaction will take place. Basically we want the buyers to pay us directly and we would take our commission and forward the difference to the seller. Seems simple enough.

    Amazon does it as does dozens or more companies I can think of off the top of my head.

    Essentially the problem is such that in the initial research we have done it looks like none of the Canadian merchant card services do not want to be involved in businesses of these sorts. It was described to me by a sales agent as an 'aggregate' account and one in which underwriters deem too much of a risk.

    It has been suggested that we use an offshore company to handle this, but not only are they extremely expensive (around 5% per transaction (or more!) vs. 2.5%) but also it is somewhat worrisome in having an offshore bank clearing the funds to my business.

    Any ideas? Comments? Etc?

    Thanks in advance!

  2. #2
    Join Date
    Jul 2009
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    Sputnik's World
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    82
    You don't necessarily have to go offshore, but you will likely have to go with a "High Risk" merchant account.

    Then again, you can always check out paypal and see if they allow your type of business.

  3. #3

    thanks!

    im pretty sure that we can use paypal - its just that ideally - i think, that a merchant system that is seamlessly tied to our back-end would look more professional.

    do you have any recommendations for stable high-risk companies whose fees are low?

    also - as this is a start-up, do you think that getting an account will be a problem initially?

  4. #4
    Join Date
    Dec 2006
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    Quote Originally Posted by canadian gal View Post
    im pretty sure that we can use paypal - its just that ideally - i think, that a merchant system that is seamlessly tied to our back-end would look more professional.

    do you have any recommendations for stable high-risk companies whose fees are low?

    also - as this is a start-up, do you think that getting an account will be a problem initially?
    You can look at PayPal's payflow (gateway only)/Payments Pro (merchant & gateway). This is what you are looking for...
    .
    .
    This way, all your transactions are handled only by PayPal! Easier to manage

    As a start up, its a pain to get a merchant account/gateway with low fees. Very difficult.

  5. #5
    interesting. but wouldn't paypal (merchant) also consider my business high-risk? (i have to say - i find this so strange that they are considering my business high-risk)

    also - would just accepting paypal via an external link as a last resort be a problem you think?

  6. #6
    Join Date
    Jul 2009
    Location
    Sputnik's World
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    82
    Paypal does allow "some" high risk businesses (just not mine), that's why I said you would have to check their terms of service.

    As for getting a high risk merchant account. I couldn't give you any suggestions of who to check as I'm still working on getting stuff ready to apply myself.

    If you don't already have it, you will need at least a business license and business bank account, for a startup, it will help if your own credit history (or whomever is considered owner) has good credit, since they will run a credit check on you without a business history. Once you have the business account and license, all you can do is apply and do a lot of reading.

  7. #7
    Join Date
    Oct 2006
    Location
    Pittsburgh, PA
    Posts
    242
    I would check out CDG Commerce, they have an international solution you could use.
    Jon Stephenson

  8. #8
    thanks for the great info everyone.

    quick question - are there consultants that deal with this sort of thing? namely is there someone i could hire to help me navigate this issue and/or help me set up taking payments online? (or working with my developer)

    also - i haven't been able to find any info on CDG high-risk accounts...

    i also located paypal's acceptable use policy and it includes this:

    You may not use the PayPal service for activities that:
    violate any law, statute, ordinance or regulation

    relate to sales of (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety, (b) drug paraphernalia, (c) items that encourage, promote, facilitate or instruct others to engage in illegal activity, (d) items that promote hate, violence, racial intolerance, or the financial exploitation of a crime, (e) items that are considered obscene, (f) items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction, (g) certain sexually oriented materials or services, (h) ammunition, firearms, or certain firearm parts or accessories, or (i) ,certain weapons or knives regulated under applicable law

    relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other “get rich quick” schemes or certain multi-level marketing programs, (c) are associated with purchases of annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card, (d) are for the sale of certain items before the seller has control or possession of the item, (e) are by payment processors to collect payments on behalf of merchants, (f), are associated with the sale of traveler’s checks or money orders, (h) involve currency exchanges or check cashing businesses, or (i) provide certain credit repair or debt settlement services.
    i think they might consider my company to include the bolded part... sheesh this is quite a bit more difficult than i thought.
    Last edited by canadian gal; 08-16-2009 at 02:32 PM.

  9. #9
    Join Date
    Jul 2009
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    Quote Originally Posted by canadian gal View Post
    sheesh this is quite a bit more difficult than i thought.
    Believe me, I KNOW how you feel at the moment.

  10. #10
    canadian gal, if I understand what you are tryng to do, it is not allowed by the card brands. Essentailly you are trying to act as a 3rd party processor for other "merchants". There is a process for doing this but it can be somewhat expensive.

    To start with, you will have to find a sponsoring bank. They will then do a background check on you, your company and verify you are eligible (it gets fairly complicated). Then you will need to pay at least $10,000 in the first year to be registered as an ISO with Visa/MasterCard. That is just the start. There will be issues of becoming PCI compliant and such on top of all the fees also.

    It may be easier to sell "tokens" then let your customers purchase the products on your site with the tokens they purchased from you. You could do this with a simple paypal account or a full merchant account.
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  11. #11
    Quote Originally Posted by zendzipr View Post
    It may be easier to sell "tokens" then let your customers purchase the products on your site with the tokens they purchased from you. You could do this with a simple paypal account or a full merchant account.
    yes - i have seen sites like this before. but why do they allow accounts like this though? and do you think that this might scare clients away?

    i also found amazon fps marketplace, but it seems complicated.

  12. #12
    Join Date
    Dec 2006
    Location
    Netherlands
    Posts
    1,430
    2CheckOut.com uses Authorize.net to process CCs.

    You are going to be basically like 2CheckOut.com; check and speak with an Authorize.net rep and give them an example by stating 2CheckOut. Should work.

  13. #13
    Quote Originally Posted by ganesh-rao View Post
    2CheckOut.com uses Authorize.net to process CCs.

    You are going to be basically like 2CheckOut.com; check and speak with an Authorize.net rep and give them an example by stating 2CheckOut. Should work.
    thanks ganesh. so what do you suggest i do exactly when i call authorize.net?

  14. #14
    Join Date
    Apr 2009
    Location
    Los Angeles, CA
    Posts
    50
    if you go with Paypal, just be prepared at any time to have your account shut off and your money stolen from you for no reason. It's pretty much Paypal official policy.

  15. #15
    Join Date
    Aug 2009
    Location
    Central PA
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    315
    I would recommend CDG commerce or http://www.avpsolutions.com they both seem to work with Companies in Canada, and their rates are competitive.
    Giving my opinions and thoughts the Moxie Way

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