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Large volume e-commerce - don't want client or server based

Posted on 2005-03-07
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Looking for the most economical solution for this.  Paypal takes too large of a percentage.

The company wants to integrate a their site to include e-commerce in the range of about 50,000 items per week.  They do not have control of the server that their site is on, but are purchasing space right now.  This leads me to believe that third-party credit processing would be the best option.  Such as Paypal, but they aren't happy with the percentage that Paypal takes out.

Does anyone have ideas for more economical solutions, and what it would require to get them running?
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Question by:BradB3030
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8 Comments
 
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Expert Comment

by:coreybryant
ID: 13482892
Well it really does not matter who has control of the server, etc but what matters is what country the merchant is located in?

-Corey
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Author Comment

by:BradB3030
ID: 13484565
US.

It does matter.  If they owned the server, they could install some things on it to take care of this...
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by:coreybryant
ID: 13487485
BradB3030,

If the merchant is in the United States, and they expect to do more than $1,000 a month, they should get their own merchant account with an electronic payment gateway (like LinkPoint, Verisign, or Authorizenet.com).  Most shared hosting plans will support the LinkPoint and the Verisign API.  (and if they do not - time to find another one.)  And even if they do not, all three gateways also have their own secure SSL to capture and process the credit card transactions.  

Third party processing for a United States merchant is usually only recommended when the company is going to be doing less than $1,000 a month or only need processing for a few months.

What do you think the average ticket and monthly volume will be.  You can do a little comparison to see what might be the best option.  Usually for what you have described so far, Paypal in conjunction with a merchant account is usually better, depending on the type of business, etc

-Corey
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by:BradB3030
ID: 13490304
I'd estimate $20k in sales per week to start out, expected peak at $200k per week

by this merchant account (LinkPoint, Verisign, Authorizenet.com) -- that's sorta what I meant by third party processing.  I just didn't know of any of these or their reputations.  I understand that under this system, all of the customer's credit information and shipping information would be stored by the merchant account, and this company would just get notification every time there was a sale?

Would like to hear a bit more about the reputations/strengths & weaknesses of these merchant accounts you listed (and possibly others)
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by:BradB3030
ID: 13490324
Cost as well, for those of you that have dealt with it already...?
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coreybryant earned 800 total points
ID: 13490422
Well with that type of volume, you definitely do not want "just paypal".    When you mention third party processing, this usually means you are using another company's merchant account (like Paypal, 2Co, etc) to accept and process credit cards.

The three companies I mentioned are electronic payment gateways - not MAPs (merchant account providers).  

The LinkPoint payment gateway is probably one of the strongest out there.  It is owned by the First Data Corporation.  First Data has been doing electronic money transfers since 1871 and they were the first processor of both VISA® and MasterCard® bank-issued credit cards in 1976.  First Data processed 12.2 billion transactions in North America alone in 2003.  It has been down once in January 2003.  There are not extra charges for transactions or to use their recurring billing module.  Monthly gateway charges - you are looking at about $15-$30 a month.  it also gives you a virtual terminal as well to process credit card transactions if taken via the phone.  

Authorize.net is probably the most advertised electronic gateway.  A lot of people think they can sign up with them and immediately start to accept credit cards.  They do not release you need a merchant account as well.  Authorize.net even uses the First Data platform to help facilitate transaction processing.   This gateway has been down about 8 times since November 2003.  There is usually a $.05-$.10 transaction charge on top of what the MAP will charge you and their monthly charge is usually about $20-$35 a month.  They also charge for their recurring billing module.

Verisign also has a payment gateway.  Verisign is probably the most recognized name because they also offer other services and products for the internet (i.e. SSL certificates, domain registration, hosting, etc).  You do not need to purchase everything from Verisign to have a successful e-commerce business.  This gateway has been down once since January 2004.  Verisign's monthly package is around $30-$50 a month.  They give you 1,000 free transactions and then charge you $.05-$.10 per transaction on top of what the MAP will charge you.  They also charge for their recurring billing module.

Yes - I try to monitor the gateways somewhat since that is my business.  

All three gateways listed above are CISP compliant.  They do store the CC number when needed.  We use the LinkPoint gateway ourselves.  It really depends on your transactions etc.  With that type of volume, I would recommend the LinkPoint.  Everytime the gateway is down, it is like locking the doors.  

The electronic payment gateway is the virtual connectivity between your site and First Data, Visanet, AmEx, etc to help verify the transaction.  Think of it as similar to the POS terminal in the commissary.  

The MAP is the other component - this is the company that is basically responsible for getting the money from the issuing bank (the consumer) to the acquiring bank (the MAP) to you, the merchant.

The gateway does send out an email to the merchant as well when their is a sale.

-Corey
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Author Comment

by:BradB3030
ID: 13492199
Very good answer and information

So they would install Linkpoint's code into their current site for CC verification.  I feel good about that recommendation.
But they need contact with a MAP that's separate?  what would that consist of?
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Expert Comment

by:coreybryant
ID: 13492226
Well basically when you get a merchant account, they set you up with a gateway (LinkPoint, Authorizenet.com, Verisign).  LinkPoint is owned by Carsdservice (a map) which is owned by First Data.  As you can see, a lot of MAPs and gateways actually rely on First Data's platform to verify the transaction.  

Cardservice does not sell merchant accounts.  They rely on agents, consultants, etc to offer their services / products.  

If you need a test store to do a test transaction from LinkPoint, let me know. I have one from them.  Authorizenet.com does not provide test stores, only unless you have an account already with them.  This is the same with Verisign.  This can be a bit of a pain at times - paying to test their services.

But yes - you are right and getting it :) - there are two companies involved: a MAP and an electronic payment gateway

-Corey
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