Third party billing vs. doing it yourself
 

What are the advantages and disadvantages of using a third party card processor (i.e. ibill, websitebilling, paycom )for a paysite vs. setting up your own merchant account and ssl server etc? (Aside from the upfront cost of doing it yourself.)
1) What have you guys experienced as an average processing cost as a percentage of billing with third parties vs. doing it yourself? Taking into account chargebacks..
2) Do a higher percentage of transactions clear using your own merchant account or third party?
3) What has a better charge back rate?

Thanks,

Jules.

good luck at acquirring an e-merchant account for porn business

its not that hard....they'll limit your monthly at first, plus will hold a reserve to cover risk... check out humboldt bank, they hooked me up....even when my credit wasnt that great.

I don't know about difference in chargeback rates, etc, but I can tell you this... We use our own merchant account, and Netbilling handles our transactions. We did this because we had 2 3rd party billers go out of business on us in a row, without paying us. The downside is that you have to be even more careful about chargebacks. They'll terminate your merchant account in a second. Definitely less worries with a 3rd party biller, but then you're putting a lot of faith in them.

That probably didn't help a bit. Sorry.

I do have my own merchant account, I was just wondering on what was better...

while you can use your own merchant account, some things you will need to consider:
can you handle the customer service and billing inqueries?
can you keep your site clean enough to avoid chargebacks
can you handle your own scrub database (this is the biggest argument for using a third party processer: let them handle the scrub, while that can suck when they turn it up high, it beats the risk of putting through bad cards and/or customers (people with a history of charging back))

so while you can use your own merchant account, you need to ensure you can provide the proper support.

what is scrub?

Jules180,

Using a processing gateway that offers the proper tools will heklp you avoid the pitfalls of having your pwn merchant account but will increase the benefits. So many people think that if you have your own merchant account, you need to do your own customer service, scripting, fraud scrubbing, etc...
That is not true. If you process with a company like Netbilling and others using your own merchant account, you can still have many of the same features that 3rd party processing offers but you maintain control.
We will handle all of your customer service 24/7/365, do all of the back end fraud scrubbing, and give you full control over all setting, email customization, form customization, free trials if you wish to offer them, no scriptming needed as we will handle the complete implementation and provide you with exceptional support as well.

A few facts to consider....

Lower credit card transaction costs. Having your own merchant account will allow the lowest overhead costs associated with accepting credit cards.

Get paid faster. Having your own merchant account will allow you to receive funds transferred directly into your checking account within 2-3 business days.

Promotes a better business image. Customers tend to place more trust and confidence in companies that have their own merchant account. When customers receive their credit card statement, your company information is displayed online and on thier credit card billing statement.

However, if you do not provide what you promise for content, do not deliver goods on a timely basis, or cancel customers when they ask to be cancelled, you are surely asking for trouble whther you have your own merchant account or not.

I am not knocking third party processing as it is a viable soution for many. However, having a merchant account especially when you team up with the right processing company, offers many, many benefits that many are not aware of.

Have a great day everyone!

If you want to learn more about the differences or wwhat we can offer you, please contact me. We will take good care of you and your business.

Mitch :2 cents:

By the way....


Scrub refers to Fraud scrubbing or how well you clean under your fingernails You were kidding? :Graucho

jules180,

Did you speak to our sales department about getting setup?

If not, call me on Monday and I will make sure you are well taken care of.

Toll Free within the US: (888)357-8166
Outside the US: (661)252-2456

Thank you, Mitch Farber :thumbsup

I think it would really depend on the volume of business you do, and/or the amount of responsibilty you'd like to hang with. Personally, I like not even being connected with the customers credit card number... plus the time gained from the things that you don't have to do make the fees the 3rd party processors very realistic, in my opinion.

But... when I get huge I will definitely look into my own merchant account.

:winkwink:

A lot of merchant account providers require that you pay a $1000 online merchant fee. The per transaction fees are higher as well as some other items [gateway fee, etc] Plus, chargebacks can be hell--both in terms of time and effort, but also money. Wells Fargo charges $15 per chargeback.

If you have a strong customer support infrastructure and have decent cash reserved, then Merch account may be the way for you to go. Just make sure to not get off the ball though.

You should use both ways if you can, that way all your money is not in one place.

Hey Netbilling Mr...

I mailed your staff this week to get some info on specific questions, and all I've got is a stupid copy and paste of a fact, is that how you do support for everyone and members too? thanks.

PS. I am still interested on getting a merchant account, if you can provide more info than Karen Campbell, please mail me at: pther(at)adultbouncer.com

Thank you

Hi Freako,

I'm sorry that you feel you questions were not answered specifically. If you would care to resend them to me, I will make sure each answer is very specific. Better yet, email me your phone # and we will call you to discuss over the phone on Monday.

Thank you, Mitch

That was fast, thank you :)

No problem...

We will take good care of you. Please understand that we get many inquiries each day and we do try to be specific but sometime some of the email responses are partially formatted. We are a very personable, service oriented company.

Mitch