Merchant Account Blog - Straight Pass Through » E-Commerce

A Little Help With PayPal Please

Robb Lejuwaan — Fri, 12 Dec 2008 01:45:04 +0000

It seems almost every day I get an email or a tweet asking me if my company, Cocard Synergy, has a better solution for accepting credit cards than PayPal. I have reviewed the fees of PayPal merchants accounts many times but I am always left feeling like I am not receiving the full story from PayPal reports. So instead of trying to figure out PayPal on my own I am inviting you who have a PayPal account to leave comments below and share your thoughts, praises and complaints about their fees and service. This way I’ll know for sure if what we have is better than what PayPal offers and so will all the people that ask about it.

So…what do you think of PayPal? What has your experience been with them? How about their rates and fees? Come on, leave a comment blow with your thoughts!

More on Free Authorize.net

Robb Lejuwaan — Wed, 10 Dec 2008 18:42:55 +0000

Back in August of this year I wrote a post about freeauthnet.com offer of Authorize.net for “free;” you can see that post here. I tried to show that a free authorize.net account ended up costing an extra $232.40 more than if you just paid the $15 set up fee for authorize.net through my company, Cocard Synergy. Those numbers are still true today but I have changed my mind on what we are offering. I have decided to pay the $15 set up fee for all our new clients from this point forward and still offer the same pricing on the monthly fees. So here are the two offers side by side:

Authorize.net Fees

Fees	Freeauthnet.com	Cocard Synergy
Setup Fee	$0	$0
Monthly Gateway Fee	$15.95	$12.50
Transaction Fee	$0	First 250 free, then $.05

Not too sexy is it? If you go with Cocard Synergy you would save a whopping $41.40 per year. It’s a good thing that is not where the savings stops! When we compare the merchant accounts offered by both companies the savings jump up.

Merchant Account Fees

Fees	Freeauthnet.com	Cocard Synergy
Base Discount Rate	2.14%	Cost Plus .30 %
Transaction Fee	$.24	$.20
Statement Fee	$8.95	$7.50

As you can see from the chart above the Base Discount Rates differ greatly. Freeauthnet.com uses tiers for their price model, Cocard Synergy uses “straight pass through.” If you do not know the difference between these two price models check out this short video that explains it all – What is Straight Pass Through.

Because I do not know what freeauthnet.com charges for their "mid-qualified" and "non-qualified" tiers I cant figure out the price difference. What I can tell you is it is extremely rare a tiered rate program is cheaper than a straight pass through program. On top of that Cocard Synergy does not have any of the following:

Minimum monthly fee
Annual fee
Early termination fee

Again, I am not sure if freeauthnet.com has any of these fees or not. However, typically when a company chooses to give their customers tiered pricing they have all three of those fees.

Bottom Line: I believe Cocard Synergy has the best free authorize.net program available in the market place today. If I am wrong please leave a comment and let me know; I always invite opposing opinions on this blog.

If you would like to take advantage of this offer just go hear:

Cocard Synergy Free Authorize.net Offer.

Introducing the iPhone Virtual Credit Card Terminal

Robb Lejuwaan — Thu, 20 Nov 2008 23:30:08 +0000

Have an iPhone and desire to run transactions from just about anywhere you go? Then this iPhone application is for you. I have included the link below, just make sure you do not get your merchant account from these guys because if you read the fine print you’ll see their rates are very high – non-qualified discount rate at 3.79%!!

iPhone Credit Card Terminal Application

Free Authorize.net? You Got It!

Robb Lejuwaan — Wed, 27 Aug 2008 06:13:57 +0000

That’s right I, Robb Lejuwaan, have chosen to give away authorize.net for nothing! My company has been charging a small fee of $25 up to this point but I just realized with a free authorize.net account I make more money!! That’s right more money for me if I give you authorize.net for free. Here is a table that shows my original and new authorize.net fees:

Fees	Original Offer	Free Authorize.net
Setup Fee	$25	$0
Gateway Fee	$12.50	$15.95
Transaction Fee	$.05 after first 250 transactions	$.09 from the first transaction

So lets say you process 200 transactions a month and you keep your account for 12 months, how would these two offers differ?

Fees	Original Offer	Free Authorize.net
Setup Fee	$25	$0
Gateway Fees	$150	$191.40
Transaction Fees	$0	$216
Total Fees	$175	$407.40

See what I mean? If you take my free authorize.net offer I make an extra $232.40! The problem is you pay an extra $232.40.

So maybe you are wondering where I am coming up with the free authorize.net numbers. I’ll tell you where from – www.freeauthnet.com. Their gateway and transaction fees are right on their website.

You also may be wondering if I am being serious about offering free authorize.net and I am; however my transaction fee will stay the same as it was originally which is $.05 after the first 250 transactions. Yes the gateway fee will be the same as freeauthnet.com but I am paying the setup fee out of my own pocket so I need to make sure I at least break even. On the other hand, if you want my original offer you are free to choose that as well.

Oh there is one other thing you will not receive if you sign up for my “free” authorize.net account, that is a merchant account with hidden fees inside the famous tiers of “mid-qualified” and “non-qualified.” In other words we will set you up with a straight pass through merchant account.

I wrote this to show you that when the word “free” shows up in any marketing, at least in the merchant account industry, that is code for “your overall cost will be much higher than if you just paid for what you were receiving”. This applies to free terminals, gateways and anything else that has a real cost to it. So beware of the word “free” and use your brain to figure out what the real cost are. If you’re lazy and just want the easiest path to take, contact me and I’ll get you your stuff for free and I’ll let you know what “free” is going to really cost you.

Authorize.net – Moving in the Right Direction?

Robb Lejuwaan — Wed, 20 Aug 2008 18:37:49 +0000

I just got off a conference call with authorize.net and a new client of mine. Our mission was to switch their merchant account provider within their authorize.net account. I happy to say the whole process took about five minutes and was almost painless (the hold music was brutal!).

I have previously written on this blog that the weakness of authorize.net was their customer service. I believe I even mentioned 30-45 minute hold times for customer service calls. Well I know this call was only a single experience with them but they sure seem to be moving in the right direction.

Thank you Brian of authorize.net you did a good job today!

Note: I feel I need to note that my company is an authorized reseller of authorize.net.

Update: I had three more calls to authorize.net for this particular client of mine; each of them also went well. On one call the authorize.net agent, Irwin, was on the phone with us for over 30 minutes and ended up fixing our problem. So now I have a total of four calls that confirm what I wrote above – that you can expect quality customer service from authorize.net.

What is a “Third Party Processor?”

Robb Lejuwaan — Wed, 20 Aug 2008 15:01:39 +0000

A Third Party Processor is an independent processor that is contracted with by a Acquiring Bank or Processor to conduct some part of the transaction processing process.

-Some of these Third Party Processors specialize in running and hosting networks of Point Of Sale (POS) terminals connected to their Host via dial out modem; they produce the software in the POS terminals as well as in their host, and route authorization requests to Visa or MasterCard as needed (MAPP, MDI, FDR, for example).

-Other Third Party Processors specialize in the Settlement of credit card transactions with Visa and MasterCard so that merchants can be paid (FDR for example).

-In the world of Internet Credit Card Processing, the Secure Payment Gateway Provider, such as authorize.net, is another type of Third Party Processor.

What is up with the CVV2 Code?

Robb Lejuwaan — Sat, 26 Apr 2008 22:50:56 +0000

Many merchants believe that adding a cardholder’s three or four digit CVV2 code for a “card not present” (CNP) transaction will help qualify the transaction for a lower discount rate. However that is not the case; the CVV2 code is only valuable to protect against credit card fraud and has nothing to do with rate qualification.

CVV2 stands for Card Verification Value and was introduced by MasterCard in 1997 and Visa in 2001. For ‘swiped’ transactions, the value is referred to as CVV1. Each of the card brands has its own acronym:

Visa: CVV2 – Card Verification Value
MasterCard: CVC2 – Card Validation Code
American Express: CID – Unique Card Code (and 4 digits)
Discover: CID – Card Identification Number

Merchants are able to configure payment processing systems, like payment gateways and Point of Sale software, to accept or decline transaction requests based upon the match or mismatch of CVV2 information. For example, if a merchant creates a rule to decline all transactions where the CVV2 value does not match, the authorization request could be successful with the issuing bank, but the transaction will be denied by the merchant. Even though the transaction was denied by the merchant, the consumer’s card will still be authorized.

One thing to know about this code is that PCI DSS compliance prohibits merchants from storing the CVV2 code. For recurring billing, merchants can accept and validate the CVV2 value during the initial authorization but cannot store it for additional transactions. This should not be problem since after the initial validation, there really is no value in storing this code.

Your Payment Engine ISN’T Your Processor!

John Robinson — Wed, 23 Apr 2008 04:23:26 +0000

By John Robinson

It seems like everyone’s using the internet these days to run transactions. Even brick-n-mortar businesses are using web-based software with USB magnetic strip readers, making their laptops into swipe terminals.

As fantastic as that is, it can confuse even the most sophisticated internet geek when something goes awry. Who should you call?

I just jumped through a bunch of hoops to fix a problem caused when a merchant didn’t realize their gateway wasn’t their processor. (If you are wondering what the difference is, I’m getting there! ) A batch failed (something that happens on occasion), probably because of a single, corrupted transaction. The merchant called the gateway, who offered to resubmit the batch, and then promptly resubmitted an already successful batch from a different day.

The result? A bunch of annoyed customers who’d been double-charged, chargebacks for the merchant (that we’ve since refunded and stricken from the record), and the merchant didn’t get paid for the failed batch. Sadly, the gateway probably wouldn’t have been able to identify the faulty transaction, as that’s a processing thing, much less fix the problem, and didn’t refer my merchant back to me.

This has all been fixed now, but as you can imagine, it was a bit painful. This was the worst issue I’ve dealt with regarding this misunderstanding. But I’ve talked with plenty of people who should know better who didn’t know who the processor was versus who their payment engine was. Even after multiple explanations.

It became clear this article needed writing.

Authorize.net , PC Charge , PayFlow Pro , CyberSource , etc., are not credit card processors; they are payment gateways.

The payment gateway is responsible for taking the card information and the transaction information and sending that over a network to the acquiring bank. When the acquiring bank gets its okay to authorize the transaction, they send that information back to your gateway, which then tells you it’s authorized.

The simplified analogy: Whatever you’re using to take payments, it functions as a terminal. Yes, some software has all sorts of things that are far more functional (recurring billing, detailed reporting, exporting to other software, etc.) than a terminal. However, ‘processing-wise’, it’s just a terminal.

To call them rather than your processor for authorization and settlement issues is a little like calling your terminal’s manufacturer. (Yes, I’m being blunt here, but it’s important to remember.)

I’ll save the differences between gateways and PC-based engines, etc., for another post. Or maybe Robb will beat me to the punch. My point here is: Once a transaction has asked for an authorization, problems with that transaction are now a processing problem, and the processor is usually not the creator of the payment gateway.

Fraud Prevention Report

Robb Lejuwaan — Fri, 21 Mar 2008 18:16:26 +0000

Cybersource which is the company that owns authorize.net has just come out with a report about web based transaction fraud. This is the eighth year they have come out with this report that includes benchmark data by company size and best practices you can use to prevent or reduce fraud.

Go here and fill out the form and they will send you and e-mail link to a .pdf version of the report.

Options for QuickBooks Users

Robb Lejuwaan — Thu, 20 Mar 2008 14:57:05 +0000

This week I have had the pleasure of analyzing two merchant account statements from businesses that were running their transactions through the extremely popular business accounting software QuickBooks . Both businesses were with the same merchant account provider and both were paying significantly more in fees than they needed to.

Statement Confusion

What I found interesting about these two statements was how difficult they were to comprehend. On the cover page of the statement, in bold letters, there is a summary statement that reads "TOTAL CHARGE TO YOUR ACCOUNT IS…" The amount that was shown on both statements I analyzed equaled about half of what the business actually paid. Then when I reviewed the summary of the types of transactions my confusion increased. Now I review merchant account statements for a living and I’m confused? So how is a business owner or an account supposed to decipher this stuff?

Options

The good news is that there are a few solutions for businesses that desire to run their credit card transactions through Quickbooks. The first is from a company named Skipjack . They have developed a plug-in you can download and install on your computer. Once installed the plug-in produces a payment window(see below) from within Quickbooks for you to enter your transactions. What this means is you can pretty much use any merchant account provider and still enter your transactions through Quickbooks. Go here for more details on this product.

The other option is from authorize.net . This is the most popular online payment gateway for small to mid sized businesses in North America. They do not allow you to run transactions from with in Quickbooks but they do provide the ability to download your transactions and upload them into your ledger.Both of these options charge a monthly gateway fee and a per transaction fee. However, those fees become insignificant when you realize how much money your business can save by getting out of Quickbooks merchant account jail.

Take Action

So if you want to use Quickbooks, maintain an accurate records of your credit card transactions and lower your merchant account fees what should you do? Go ahead and take a look at the websites I have linked to above and then give me a call . I will answer any questions you may have and then analyze your current merchant account and show you how much we can reduce your fees by. Go ahead take some action – the jail door is wide open. You are free to leave!

Merchant Account Blog - Straight Pass Through » E-Commerce

A Little Help With PayPal Please

Related Posts

More on Free Authorize.net

Related Posts

Introducing the iPhone Virtual Credit Card Terminal

Related Posts

Free Authorize.net? You Got It!

Related Posts

Authorize.net – Moving in the Right Direction?

Related Posts

What is a “Third Party Processor?”

Related Posts

What is up with the CVV2 Code?

Related Posts

Your Payment Engine ISN’T Your Processor!

Related Posts

Fraud Prevention Report

Related Posts

Options for QuickBooks Users

Related Posts