Why Use a Third Party Merchant Account?

After over a decade online, I still use a third party merchant account. I know people wonder why a "professional organization" would do that, since it is considered by some to be UNprofessional. So, I'll tell you!

When I opened my first website, I researched regular online merchant accounts. Talk about a headache! It was gruesome. There was SO much difference in what they offered – there was SO much hype – and, it was expensive for someone just starting out.

I decided I would wait until my new business was two years old (that was the requirement), and just get a merchant account with my own bank. When the time came, I checked it out, and found that I would still be paying over twice the amount I was paying a third party merchant account to process payments.

That didn't make good business sense to me! And, by that time, I had heard the horror stories of having your own merchant account for an online business. There are major problems.

The main problems are fraud issues. Affiliate programs are especially susceptible to fraud. Any expensive products that can be resold are also at risk.

If you have your own merchant account, you will be expected to check every order for fraud. By this, I mean some thief using stolen credit card numbers. If fraud gets by you, you will be liable to return the money to your merchant account provider, since they paid you. And, you may not have it by the time the fraud is discovered.

Then, what happens?

Your merchant account provider places a "freeze" on your checking account! I've heard of providers leaving this freeze on bank accounts for up to NINE (9) months. You will also lose your merchant account – as if you committed the fraud!

Now, mind you, you may have funds in that account over and above the amounts of the fraudulent transactions. Doesn't matter. They freeze the entire bank account at least until they have every cent of their money back – PLUS the time it takes them to release your account. I've heard of the freeze staying in place for six months, even if they got all their money back in the first 30 days!

Do not believe for a minute they give a damn about any other funds they have tied up. They don't! How are you going to operate your business without money? In fact, how are you going to live without the money they tie up?

I know people who have been completely wiped out because they spent money paid into their bank by the merchant account provider. Then, months down the line, it becomes apparent that fraudulent transactions accounted for some huge amount of the sales, and they had to cough up thousands of dollars – already spent.

Thieves Checking for Good Credit Card Numbers

Then, you have the credit card scammers using your order page to check for good credit card numbers! They use some routine to input random numbers – just like the telemarketers dial random telephone numbers.

They may only put through sales of one dollar, or less. All they are doing is noting which numbers go through. Those they know are valid credit card numbers to be used in one scam, or another.

How does that hurt you? You are paying your merchant account provider a fee for every transaction! When the thieves are running through hundreds, or even thousands, of numbers, that can add up fast.

Do you think your merchant account provider will refund those fees to you when it becomes apparent what's going on? If you guessed yes – guess again! They don't care! The transaction happened – you PAY!

Not So With a Third Party Merchant Account!

Now, I can't actually vouch all third party merchant accounts. And, I'll be honest and tell you that, in two years, I went through four of them that didn't work out. But, since then, I've had the same one - and it works beautifully.

They check for fraud! They have people on staff who do nothing else. If someone started running numbers through, they'd catch it in a flash. We do NOT pay for bad transactions!

They even send us a warning if the machine check flags a transaction., i.e., name doesn't match address, comes from a country known for fraud, etc. They warn us not to deliver until they have checked it out, always within 24 hours – usually much faster.

Now, it's true – they deposit money into my bank account once a week, rather than every day. But, so what? Do I need it every day? Nope. And, for all this protection, I pay less than half what I would pay for a merchant account that gives me no protection whatsoever!

And, last, but certainly not least, the third party merchant account company takes care of all Payment Card Industry (PCI) Data Security Standard (DSS) requirements. I never have to lift a finger!

So, while I watch many of my good friends online pulling their hair out, paying for fraudulent transactions, paying for the scumbags to check credit card numbers, so they can look "professional" - I rest well at night. I'm also protecting my business, my reputation, and my money!

Sometimes, it just pays to outsource certain services! And, your merchant account is one of them!

Yes, I will tell you which third party merchant account I use. Look here:


Silence is Acceptance

It's an unfortunate fact that, when times get economically tough, more people than usual come out of the woodwork to take advantage of others.

I'm sure you've heard the statement, "Silence is acceptance." I think they use it on the anti-drug commercials. And, I'm pretty sure they stole it from me. But, that's okay. At least I know I could be sitting on Madison Avenue instead of in front of this lousy computer.

Ever think about that statement? Ever think about how many things it could apply to in our lives? Ever really think about the number of things we accept by our silence simply because we don't want to make waves? Hey! What's a little wave?

Let's look at it another way. Ever think about the really mammoth size waves we create by our silence? I'm talking tsunami here!

Someone may not want to make waves over the suspicion that a kid is using drugs. What kind of a wave do they have when the kid ODs? Tsunami? You bet! That's what silence will get us.

A tsunami is exactly what is sweeping the Internet. We have a wave of unprofessional businesses drowning the rest of us in the murky water of their race to get-rich-quick. It's a wave of online companies with no concern for the customer other than how to get their money in the quickest way possible.

It isn't just the new online business owner - who may still be an inexperienced amateur. It's even the giant corporations. In the past, they handled their business professionally. They bent over backward to make customer service a top priority. I guess when you can market to the whole world you don't need to bother to take care of the individual customer, eh?

How did this become a tsunami? How did it get out of hand? You guessed it! We've gone along with it - especially if we were new to the Internet - because we didn't want to make waves! We've accepted it by our silence.

Every business owner on the Internet is also a customer on the Internet. If you're struggling to run a professional company, I know darn well you keep running into service - or product - providers who don't appreciate your business. They often act like they don't even need the customer in order to their keep their company afloat.

Fair enough. If that's what they think - let's tell other potential customers about it. These companies will no doubt thank us when they NEVER have to think about another customer!

It's time to stop staying silent. In fact, it's past time! Let's spread the word. Maybe a little pressure will push back that tsunami that's threatening to drown us all. Maybe a little pressure will encourage some of these people to start running their companies in a more professional manner.

We have several ways to do that ...

First, we need to pay attention. Never mind what their PR says - never mind what their affiliates say - are you getting what you're paying for? And, are you being treated like a VALUED customer, as you should be?

If not, we can begin - by stopping. STOP accepting unacceptable treatment from online companies. STOP doing business with those who promise one thing and deliver something less. STOP doing business with those who have no regard for considerate customer service.

And finally, we can start. START realizing that silence truly is acceptance! START telling everyone you know why you stopped doing business with these companies.

Here's where they think they have us. They think we're afraid to do anything other than stay silent. Me? I knew years ago that silence is acceptance. It's time we all made some noise!

New Data Security Regulations

We just get past the deadline for compliance with new U.S. Federal Trade Commission (FTC) guidelines and something else rises up ...

The State of Massachusetts has passed a LAW imposing new minimum data security standards on companies that collect, store or transmit personal information concerning Massachusetts residents.

By October 1, 2010 similar requirements will be imposed for all customers by the credit card industry. But, right now, we need to deal with Massachusetts.

To be sure I don't misinform you, I would prefer you get the full information from a more official article here:


All these new rules are making folks wonder if they should even be in business on the Web. Yes! You should!

iCop members have always been required to adhere to regulatory agency guidelines. It's right there in our guidelines and always has been. I changed the wording a bit with the new regs, but it's nothing new.

Twitter has shown me how pitifully many people are out there still trying to make a killing with quick buck money-making schemes. They simply never end - and people just don't get it!

If you're going to have your own business - have it! Just follow the rules like you would down on Main Street. People have been doing it for generations.

Nobody ever said, "Here's the Internet, go out and do whatever you please with no regard for the law or ethical business practices!"

This is exactly what iCop has always been about: high online business ethics and excellent customer care! Now, finally, the Wild, Wild Web is being tamed. The crapola is on its way out. 'Bout bloody time!

Getting Your Ezine Delivered

I'm asking all my newsletter subscribers to validate their subscriptions, this week. It's a simple matter of clicking a link in an email. It effectively causes the subscriber to RE-subscribe.

Those of you who have done this with your own ezines, in the past, may wonder why I do this. Especially since we all know my numbers will decrease by anywhere from 50% to about 75%.

The reason is this ...

From Mark McCreary of www.Mail-List.com (my email delivery service):

“It improves our reputation at the ISP's, where they know how many emails we deliver and how many are opened. Having a poor ratio of opened mails can cause delivery problems for all of our lists.

Some ISPs take old abandoned accounts, and consider them spam trap addresses - meaning that any email received is labeled as spam. So even though that person joined your list using the confirmed opt-in process, and never bothered to unsubscribe, we get blamed for being a spammer.

It also reduces the amount of times people report your email as spam. Since they are no longer getting it, so they can not click on the "Report as Spam" button. Again, this improves our reputation at the ISPs, as they monitor the ratio of deliveries to email reported as spam.

The industry wide average for email addresses going bad is 3 to 5 percent per month. That means over the course of a year, half of your subscribers have abandoned that email account. And since most ISPs now have very large or even unlimited mail boxes, we do not get back bounce messages telling us their mailbox is full.”

In addition, my total number of subscribers has no meaning. The only meaning is in the number of my readers! Cleaning the list makes delivery to those readers even more assured.

I've also shortened the email version of the newsletter. AOL only delivers an email up to 15KB in size. It used to be 20 KB. And, they didn't even bother to consult me when they changed it! Umph!

BTW - if you need a new email service, I HIGHLY recommend Mark and www.Mail-List.com. I've found I don't NEED all the bells and whistles of some of the other services. What we ALL need is DELIVERY!

Nope - not an affiliate of this service. I simply recommend it. Did YOU know about this information from the ISPs?

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* dr. jl scott is the Founder of Chamber of Commerce - on the Web™ http://www.ChamberofCommerce-ontheWeb.com - and also the publisher of the Online Business Trade Journal™ - the blog that keeps you up to date with online business coming of age. Visit: http://www.OnlineBusinessTradeJournal.com

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