E-Commerce Gateways

[eitai2001]

Hi.

I am looking at accepting credit cards on my online shop.
I haven't got a merchant account, so I was looking at either mygate.co.za who have a supermerchant account, pricetag.co.za or setcom.co.za ... which one would you guys use.
I see pricetag's maximum is 5.7% but I'm not sure how good they are with graud detection, but they offer negotiable rates once you achieve over 40k a month.
Mygate is 6%, and they have a fraud module, but I'm not sure if they are negotiable.
What are my risks ITO fraud with these providers ... and do you know how much they refund you in case of a charge back?
Also, how long does it take to access the funds from these gateways as I need the funds to purchase and send the products.
Do you guys think that customers will object to paying 3% extra on the fees to use a credit card, otherwise in some cases, I will make a loss.

Regards

Itai

[Dave A]

The only one I can give some sort of an answer on is

Do you guys think that customers will object to paying 3% extra on the fees to use a credit card, otherwise in some cases, I will make a loss.

It's not the customers you have to worry about. Normally the merchant agreement specifically states you may not charge a different (higher) price because the bill is being paid by credit card.

You would have to change your base price regardless of payment method to solve the "loss" problem.

[eitai2001]

I have seen some sites where they do that ... can't remember which ones though. If I remember correctly, there was an argument (loophole) around that ... I can't remember how it worked though. Something to the effect that you are charging them extra for the convenience of having credit card facilities and not for the fees. But I'm not sure.

[duncan drennan]

Just watch out, for some of them you have to have a merchant account with a bank (I know mygate is like this), so you will also have to pay extra merchant fees to the bank as well (unless they already build this into their pricing).

[eitai2001]

Mygate has something called MyGate Express which is a super merchant account ...
My biggest questions with them and Pricetag is fraud risk, chargeback risk and amount of time to collect the cash.

[IanF]

Eita
When I got the speedpoint machine I was told that you can't charge more for using a credit card, but you could discount for cash cheque etc.

[Chatmaster]

I used Setcom on one of my sites before. They are pretty good but expensive. Haven't used any of the others. Can I ask you what you are selling? Also is it aimed only at the SA market?

[Karenwhe]

We have merchant account with bank directly. We negotiate with them prices and then use VCS for clearing which is pretty cheap.

Maybe there are better solutions out there but we found at that time this to be the most cost effective while preventing fraudulent transactions.

For us cost was important at that time (and still today) as some of our sites resell electrical hardware and the margins are small.

If there are better solutions today, as I have not re-checked for a while, I would love to know also.

The other option that we found (but not used as yet due to trust management break even point), is to set up an offshore trust, which can cost anywhere from 16K and you can then add many more payment systems including PayPal and costs are ridiculously cheap compared to what is offered right now in SA. The cheap cost of transaction does make up for the management costs of such trust with the right amount of sales. We did not use it as we trade in SA only, but I did see one SA person that is doing this as his product is information and appeals to a very large international market, which makes this worth while for him.

Hope this helps.

[Chatmaster]

I have converted all my sites to use moneybookers.com and one is using Neteller but then, they are all international sites and must be able to take payments from most countries, including South Africa.

[Karenwhe]

We tried moneybookers and had some very unpleasant surprises in terms of process administration and stuff like that which resulted in money going well, lost. We still await money they have to pay us from some 6 months back. Luckily it is not that much, needless to say, we don't want to do anything with them again.

I hope you have a better experience and they improved their processes.

I have not tried Netteller, can you tell us more about your experience with them from SA (the good and the bad) and for how long you used their service?

[eitai2001]

Hi.

I sell computer hardware on my site to the local market only.
Another big concern of mine is that the money must be available either immediately or within 1 or max 2 days as I need the customers money to buy the stock seeing as I don't keep it in stock.
At the moment I'm not ready to go for a merchant account with a bank as their costs will work out more as my sales are not high enough as yet. I first want to get a super merchant account so that my sales increase a lot and then from there, I will use those figures to propose a forecast to the bank.

[Chatmaster]

Well been using them for nearly 2 years now, can't say that I had any serious problems. I have a fixed product sold at a single price on each of the sites perhaps that is making the difference?

I used Neteller the first time, mmmmmm I think 4 years ago, they even have a little bank card you can draw your money with from most ATM's, so it is fairly easy and user friendly. They are very reliable and my experience with them was that they are very helpful. I sold my site that we used them on June last year, but I was happy with them. They do a FICA and once that is done you receive your card and documentation within about 3 weeks time.

[Chatmaster]

Hi.

I sell computer hardware on my site to the local market only.
Another big concern of mine is that the money must be available either immediately or within 1 or max 2 days as I need the customers money to buy the stock seeing as I don't keep it in stock.
At the moment I'm not ready to go for a merchant account with a bank as their costs will work out more as my sales are not high enough as yet. I first want to get a super merchant account so that my sales increase a lot and then from there, I will use those figures to propose a forecast to the bank.

Why do you not just ask for an EFT, open a business account with FNB as a soletrader and you will receive your payments immediately from another FNB or the next day from other banks?

[Karenwhe]

Hi.
I sell computer hardware on my site to the local market only.
Another big concern of mine is that the money must be available either immediately or within 1 or max 2 days as I need the customers money to buy the stock seeing as I don't keep it in stock.

This is exactly what we also do with hardware (just not computer stuff). We say on the site that "your order will be processed only upon proof of payment". Which enables you to use EFT and ask them for proof of payment before you place your order with your supplier and pay them.

At the back end of the website software we mark "confirmed" when we get proof of payment. With credit card is fast with EFT you need a fax or whatever to check for the customers proof of payment. We use fax to email for convenience (not a real fax).

At the moment I'm not ready to go for a merchant account with a bank as their costs will work out more as my sales are not high enough as yet....

I agree 100%. But you can negotiate with them cheaper than you think. This is why we went to the bank. We managed to negotiate them so much more down that they became cheaper for us than any other solution. Don't take their advertising for granted. Go in, speak to them, tell them about your business, your margin and what you can afford to stay in business. Lets just say you can get even 75% below their advertising rates.

They are likely to give you much lower rates. And I mean far lower than you can imagine, but will most likely put you on a trial of a few months. Then you need to go in again and ask them to keep your rates the same, if you did not reach their required transaction volumes.

We did this until we reached their required margins and it worked. But we knew it would take a year so we had to keep going in the bank to keep the rates low every 3 months.

If you don't think you will ever reach their required margin, then this may not be an option at all.

Hope this helps.

[Karenwhe]

I used Neteller the first time, mmmmmm I think 4 years ago, they even have a little bank card you can draw your money with from most ATM's, so it is fairly easy and user friendly. They are very reliable and my experience with them was that they are very helpful.

I must definitely check this. Thanks for that.