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:
http://i-Cop.org/creditcards
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