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No Minimum Merchant Accounts
by Yisroel Goodman

What about CCnow and Propay? Aren't these merchant accounts?

Not really. Companies like CCNow and ProPay allow merchants to pretend to have a merchant account. I will assume that CCNow (which I haven't used) works similar to ProPay (which I have used). The merchant validates the customer and enters the transaction at the site. There are no monthly fees, statement fees or minimums; it is strictly pay-as-you-go. Payments are not automatically accepted; the merchant must enter them. The merchant uses his own judgement and does not rely on a third-party to validate the customer. Charges appear on the statement with the merchant's name. However, there are still some disadvantages. The transaction fees are high. Propay has a fee to open the account (currently $35), a 3.5% percentage and a transaction fee of about 70 cents (35 cents on the acceptance and another 35 cents on the withdrawal. You can make one withdrawal which encompasses several transactions.) CCNow's rates are even higher. There are limits. Propay limits individual transactions to no more than $250 and no more than $1,000 per month, unless the merchant signs up for a different account and sends in a hefty deposit. Even though it appears to be real merchant account, it really isn't. Propay is acting as the middle-man. Charge backs are reported to Propay, who may or may not contact the merchant in time to dispute them. As for validation, in about 20 transactions with Propay, it reported a zip code mismatch every single time. I even charged my own card and it reported a zip code mismatch, though I have been living at that address for over 12 years. When I contacted Propay, they blamed it on typos, on the issuing bank, on the AVS system and would not for a moment entertain the notion that there might be a problem with their software.

Why shouldn't I just find the cheapest merchant account?

The drawback to getting your own merchant account is that it can get expensive. There are application fees, statement fees, gateway fees, transaction fees and a monthly minimum which you must pay even if you don't use the account. If you are a new vendor starting out or a vendor who only wishes to offer credit card processing to a small percentage of your customers, these fees can steal all your profits. What you really need then is a merchant account that only charges you for what you actually use. I call this the low minimum merchant account. I found two merchants offering such accounts. Shortly after I signed up for Intelli-collect, their processor not only stopped offering it, they told existing accounts to switch to a regular account or cancel. I then switched to Payquake, the only company I know currently offering such an account.

Payquake.com
Even though their rates were higher (3.75% plus 50 cents per transaction), I liked the idea of having my own merchant account. Unfortunately, Payquake neglected to mention a few additional charges. There is an additional 1% charge for Internet merchants, bringing the percentage to 4.75%. There is also a 50 cent charge per batch. If you enter 3 transactions together, that is one batch. If you enter each transaction separately so that they are processed individually, that would be 3 batches. Most small sellers enter each transaction a few days apart. So effectively, they will be paying 4.75% plus $1.00 per transaction. I therefore chose to close my Payquake account before the $49 annual fee would be charged.

Note: Payquake claims that the extra 1% is only charged on transactions involving foreign or business credit cards or transactions where AVS was not used. All I know is that on my statement, 1% was added to the total, evan though all of my transactions were personal credit cards and AVS was used. Whether it is charged on all or most, if you use Payquake, you should be prepared to pay as much as 4.75% plus $1 per transaction.

E-OnlineData offers competitive rates and they have temporarilly waived the $79 set up fee for merchants we refer to them. Since I don't personally use them, this is not a personal endorsement, but they have been recommended by others. E-OnLineData.com

If you want more information about merchant accounts or shopping carts, use the email link below:

     Email sales@ccs- digital .com.