My Merchant Account Blog

Who Is the Worst Merchant Account Provider

Sunday, April 02, 2006

There is really no such thing as the worst merchant account provider.  There are some very large merchant account providers with a large client base. 

Paypal is a pretty large aggregator.  Currently, on their site today they say they have over 96.2 million members.  With that size of client base, you are always going to find problems.  The longer you are with a company and the more you do business with a company, you will increase your chances of problems.

With that type of base, let's say that they one 25% of of those clients in one day with one transaction.  That averages out to about 357 transactions per second.  With this type of statistic, you have to assume that at some point you are going to have problems. 

Some of the larger merchant account providers (MAPs) (Chase / Paymentech, Cardservice, First Data Merchant Services, Ipayment) boast a huge client base.  With these MAPs, they do a significant amount of business per year.  For example in 2004, Cardservice, who is owned by First Data processed $10,270,500,000 in 123,800,000 transactions alone.  The majority of these merchants use the LinkPoint gateway.  This is the same for Chase / Paymentech who First Data owns 50% in.  They processed $254,949,800,000 in 3,448,800,000 transactions and $189,782,500,000 in 3,353,300,000 transactions respectively. 

You hear a lot about Paypal and how bad they are.  One of the larger reasons is they do not check the identity of the merchant.  When it is found out that the merchant is underage or possibly selling something that is against the terms of service of Paypal, Paypal willl suspend or terminate their account.  And usually they will hold any money left in the account for 180 days in case of any chargebacks. 

Cardservice has a very lax policy in their merchants.  They will approve a lot of higher risk clients even if you are on the terminated merchant file (TMF).  They also will approve you if you are just starting out and have no processing history.  This increase Cardservice's statistics of course of hanving unhappy merchants.  And then of course when Cardservice suspends / terminates an account because of chargebacks or potential fraud, people tend to complain.

One individual even created their own site because he / she was very upset with Paypal: Paypal Sucks. That same individual also created Cardservice Sucks, which goes to the same web site which leads on to believe that he / she just likes to complain.  It also goes to prove what I just said above - lax policies with Paypal and Cardservice can actually cause more problems for them.  They try to help merchants start their business, but some merchants take advantage of that help and they try to actually rip off Paypal and Cardservice as well as their merchants.  And remember, you will always hear more complaints about a company than you will compliments.  It is human nature to complain more unfortunately.

Comments

Mala said...

Then who is the best one?

1/28/2010

Corey said...

Good Question. I would recommend a smaller company - those usually will provide you with better customer service in the long run - check out http://www.milehighmerchantaccounts.com

6/28/2010

Name
URL
Email	Email address is not published
Access Code
Please enter the access code
Remember Me
Comments