What is a reputable, low-cost, non-PayPal merchant account to accept credit cards online?
March 17, 2009 12:19 PM   Subscribe

What are some reputable, low-cost, non-PayPal merchant accounts that enable you to accept credit cards online? Extra credit question: what are the best designed and lowest cost Web store options?

I've been using PayPal for years to sell on Ebay, but want to open up a standalone web store and accept credit cards directly.

So my question is a two-parter:

1) Who out there has a good, reputable, low-cost merchant account to directly accept credit cards online? My business volume will probably be a couple thousand dollars a month to start, but hopefully as I move sales from Ebay to my Web store, it will be several times that. I'm tired of shoveling money into Ebay/Paypal's pockets, so I'm open to any suggestions. My biggest concern, besides cost, is protection against fraud. PayPal does have certain protections for the seller against unauthorized credit card payments, and I'm terrified of losing hundreds of dollars to bad apples if I go to a non-PayPal merchant account. Any insight on that?

2) Can anyone recommend a Web store that's easy to set up, allows for a certain level of customization, and has sophisticated inventory management? I've spent some time trying to set up a ProStore Business-Level account but refuse to open it because their inventory management is a joke if you have more than 10 or 20 items (I generally have 150-200). The entire interfaice is utterly slow and counterintuitive--though maybe I'd need to upgrade to Advanced to get more functionality. The upside is that it synchs inventory with your Ebay store, and it would be hard to let that go, as I'm constantly adding new items to the store. Any suggestions?

MANY THANKS for your help!!
posted by roxie110 to Computers & Internet (15 answers total) 19 users marked this as a favorite
1) www.firstdata.com works well.
posted by darth_tedious at 12:27 PM on March 17, 2009

Amazon has an e-commerce program now that includes credit card processing.
posted by trinity8-director at 1:10 PM on March 17, 2009

1) Google Checkout
posted by mkultra at 1:19 PM on March 17, 2009

Yahoo does all that. Here's one of my favorite online stores. He has his own URL, and you don't see a Yahoo logo anywhere on his very-highly customized site. But Yahoo is hosting it (do a URL lookup and then reverse-lookup the IP and you get "html1.store.vip.mud.yahoo.com") and they take care of all credit card processing when you do an order.

I think this is the portal for setting up your own business site.
posted by Chocolate Pickle at 1:24 PM on March 17, 2009

I'm not sure if your main issue with PayPal is cost, but I thought I'd share my experience just in case. Call PayPal and explain that you want a lower processing rate. Specifically mention that you're considering moving to Google Check-Out. When I called, PayPal lowered their fees by .8%.
posted by joe vrrr at 2:37 PM on March 17, 2009

authorize.net's API is dead simple to tie into.
posted by ook at 3:29 PM on March 17, 2009

I'm switching from PayPal Website Payments Pro to Dharma Merchant Services and Authorize.net. PayPal's Website Payments Pro service lets you accept credit cards without sending people to the PayPal site, and it works, but after only one month I'm tired of their byzantine bureaucracy and frequently-down web site.

I haven't used Dharma yet but for what I do, their rates are close to PayPal's, plus they're friendly and green. The main selling point to me is the fact that I can call and talk to a human being. They also have fewer little fees. For example, PayPal charges extra for cross-border transactions, which are 50% of my sales, while it's all the same to Dharma.

I learned about Dharma through an enthusiastic review on StartupNation and then Googled for more feedback, all of it positive. They fill out the application for you; you just have to read and sign. They have standard fraud protection that sounds like PayPal's, plus you can pay extra for extra protection, just as you can with PayPal.

However, I haven't actually used Dharma yet--I just sent in the application.

For a shopping cart, I'm happy with e-junkie, but it's probably too small for you.

In case you're considering staying with PayPal: on Friday, PayPal locked me out of my account because of a credit agency's error, even though PayPal already had the information to correct the error. I had to scan the same info I had sent them in December (and which they had acknowledged and approved back then) and send it all again before they would let me access my money. There are many similar stories online. I don't trust them anymore.
posted by PatoPata at 3:34 PM on March 17, 2009

You seem to indicate (apologies if this isn't the case) that your main concern with paypal is the cost of the transaction fees. Most companies charge similar fees, paypal really aren't gouging you as far as the market average goes.

Paypal also has an advantage over other payment processors, millions of people with paypal accounts. Just anecdotal I know (though I'm sure PayPal's marketing department will agree its not just me) but I am significantly more likely to buy from a shop that offers paypal as an option. The time it takes me to go get my wallet and type in all my details is long enough to make me reconsider an impulse purchase, or maybe I just can't be bothered to go find my wallet. I'm also significantly more likely to return to you to make future purchase because I know I wont have to go find my wallet or fill in a big form with my address and cc number etc. Make it as easy as possible for customers to give you money.

Many shops offer PayPal, Google Checkout and another payment processor to give the customer the most options.

Also, this might just be a UK/Europe thing but as of May this year, Google Checkout and Paypal transaction fees will be identical.
posted by missmagenta at 3:46 PM on March 17, 2009

First Data is the worlds biggest payment processor. I think their eCommerce solution is now called Global Gateway. I think they have the lowest rates, though i'm not 100% sure.

authorize.net is another choice to look at.
posted by chunking express at 7:33 AM on March 18, 2009

And I agree with missmagenta, that a lot of shoppers will be more inclined to buy from a site that offers paypal, since they already have the account set up. I know I am.
posted by chunking express at 7:34 AM on March 18, 2009

Response by poster: hi! thanks for all the good advice... to clarify, paypal's rates are satisfactory (I'd have to move to Website Payments Pro so buyers could pay right in my site instead of going to PayPal all the time, which for them wouldn't be much of an improvement over buying from my Ebay store), i'm just worn out from years of paying the ebay/paypal conglomerate more and more each year for less in the way of service on the seller side. right now ebay's probably getting 12% on each sale, plus listing fees, and plus paypal's 2-3%. so i'd love to put my money in a more reputable company's pocket, and more in my own as well!

i checked out amazon webstores--they take 7%, which is too high to justify a switch, though it was a good suggestion.

can google checkout be your ONLY checkout option, or does it have to be a second option, as their site seems to indicate? if the latter, then i'd still need another merchant account.

haven't checked out first data and authorize.net yet... i have to say i find all this ecommerce lingo baffling! first setting up the webstore, then trying to link it to some payment provider, AND hope that i don't end up getting killed by fraudulent cc payments. any more advice on all of the above would be very welcome!
posted by roxie110 at 10:22 AM on March 18, 2009

First Data does credit card issuing, processing, etc. I wouldn't be surprised if many of these front ends end up talking to some First Data host on the back end. (i.e. I don't imagine fraud is a bigger issue switching to them.) I'm not sure they are any less greedy and evil.

Shopify is also probably worth a look.
posted by chunking express at 10:59 AM on March 18, 2009

(Shopify is good because it probably does the lionshares of the work for you. You can just sell your junk, and not worry about ecommerce this and that. There are probably other hosted solutions like it.)
posted by chunking express at 11:00 AM on March 18, 2009

i have to say i find all this ecommerce lingo baffling!

There are really only three moving parts in this machine:
* the storefront / shopping cart
* the credit card authentication
* the merchant bank account

What a lot of these services -- including paypal -- are doing is offering two or three of those as a package deal, and skimming a percentage off the top for the convenience. Much of the complexity you're seeing is because everyone uses different terminology for the same things (or in some cases because they're taking advantage of people who don't realize how simple this really is.)

The most cost-effective approach is to handle all three of those items separately. This involves some extra hassle, so it's only worthwhile if you've got a pretty steady income stream, but it sounds like you're already at the level where this would be worthwhile.

* Opening a merchant bank account is pretty much the same as opening a regular bank account. Just go to your bank and ask. Easy enough. All this is is a bank account into which the credit card authorization company dumps your money when they run a card.

* The credit card authentication is just, you say to (for example) authorize.net, here's a card number, charge it for this amount. And they do, or else tell you that the card's bad. (Authorize.net's simplest API is pretty much just that simple: you send them form data containing the card number, the amount, and a few other bits of information, and they send you back a code which either means yes, it's done, or no, it failed and here's why.) Buying this on its own is relatively cheap, I don't remember exactly the rates as it's been quite a while since I did this, but it's FAR less than the 7% the bulk operators like paypal and google take.

* The shopping cart is your website; this can be as simple or as complicated as you want to make it. This doesn't have to cost anything at all -- there are plenty of open source cart systems out there -- but you'll likely have to hire a developer at least to get it up and running and tie it into whichever authentication system you've selected (and to whatever your order fulfillment process is.) That's a one-time expense, though, it doesn't have to be ongoing.

I think the amount that paypal charges is frankly obscene for what they provide; it's really not that difficult to handle this stuff a la carte for a lot less money. (Even if you set aside that their system is such a complex PITA both for purchasers and sellers. I really truly don't understand how they stay in business at all.)
posted by ook at 12:07 PM on March 18, 2009 [5 favorites]

Shopify is good, but don't you still need a merchant account?

Paypal also has merchant accounts (they bought out Verisign & a few others).

But then you get shopify taking a piece of the action & your merchant account (which is really unavoidable).
posted by Muffy at 3:01 PM on March 18, 2009

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