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NETbilling · 01-17-2003, 12:40 AM

Quote:

Originally posted by Rand
If you are selling a tangible (shippable) good then you "must" have your own merchant account and you should not mix online transactions with that biz.

But I will tell you, my experience has observed that most WM's start out processing 3rd party and some try their own merchant account. Some, a few, are able to successfully continue their business that way. The vast majority cannot.

Over 90% of those who try to process high risk trans to their own merchant account fail within a year. Then, return to 3rd party.

This possibility has changed. The recent Visa reg's have made "returning" to 3rd party impossible. --Not a good risk model.

If you can make your own merchant account work, great. The costs, however, won't be much different from 3rd party in the long run and you assume all of the risk.

Not to mention that the number of banks willing to take that biz has greatly reduced since November 1, 2002.

I know Mitch will disagree. But, for high-risk digital content, especially in today's market, you need to process with a 3rd party processor.

Knowing how hard this is to be a 3rd party processor, I would say that allowing someone who knows processsing to handle that aspect of your biz is the wisest decision. Focus on building your business and marketing and let an entity with experience in the online processing field keep you out of trouble.

If you don't think it's tough to process trans in this areana, I invite you to think about why people complain about 3rd party processors in the first place. Then, decide if you think you could do any better. If you think you could, you should give us a call. We might have a position for you.

Rand,

You are correct... I do not agree. If it were true, Netbilling and other gateways would not be in business. We setup new merchants every day and help establish new high-risk merchant accounts every day as well. The banks are a bit more strict than before. However, we almost neverever lose a merchant for begin TMF'd. Also, if a merchant does get terminatede having theor own account or with an IPSP, they eill hasve a hard time processing in the future for their "donut shop". You arer also not coprrect about the cost being the same.

Netbilling merchants pay about 8% on average for credit card processing total, and they pay 3.25% and 40¢ for check processing. What does Epoch charge again? I am not saying that the merchant account model is for everyone. Neither is the IPSP, especially now that you can no longer protect the merchants under your unbrella.

Rand.... No disrepect meant to you at all. Epoch is a great company. The 3rd party IPSP model is just not as viable as it once was. Merchants demand and deserve more control these days, and we give them that ability while handling all of their customer service and all of the other aspects that IPSPs provide.

Mitch