My Merchant Account Blog

Internet Payment Service Providers

Wednesday, August 19, 2009

Internet Payment Service Providers (IPSP) or Third Party Payor (3PP) is another option for some merchants.  Most of the IPSPs require the merchant to direct the customer over to its secure webserver to handle the transaction.  The IPSP will scrub the transaction for you, since it is their merchant account you are using.  Probably one of the more well known IPSPs is Paypal (owned by eBay).  Depending on the country the business owner is in, he might qualify for their "Website Payments Standard" which will allow the merchant to process the transaction on his secure web server, allowing the consistency during the checkout process.

Paypal's fees vary per country and per type of account.  For the most part, the fees are similar to Checkout by Amazon and Google Checkout.

There are a number of IPSPs available to merchants worldwide.  Some are reputable and some might not be.  Do your homework before enlisting in any of these services, and make sure you understand their terms of use and acceptable use policy.  For example, most IPSPs will not support a Ponzi / MLM scheme.  If you sign up with an IPSP that does not support a Ponzi scheme, sooner or later the IPSP will find out.  When they do, your agreement will be suspended or terminated.  Any funds that are in your account with the IPSP will be frozen.

Other Internet Payment Service Providers

I will take the time and list out a few other third party payors in this section.  Keep in mind that we do not support any one service listed.

Checkout by Amazon

Checkout by Amazon was founded in 2007 and headquartered in Washington, United States.  Checkout by Amazon has a varying price structure.  For payments under $10.00, the discount rate is 5.0% and the transaction rate is 5¢.  In most cases, the transaction rate (fixed rate) is higher and the discount rate (percentage) is lower.  A $5.00 transaction would cost the merchant about 30¢.  If you have a merchant account / electronic payment gateway, the transaction would cost about 41¢.  For transactions more than $10.00, the discount rate is 2.9% and the transaction rate is 30¢.  A $20.00 transaction would cost about 90¢ with Checkout by Amazon and about 74¢ with a merchant account / electronic payment gateway.

Checkout by Amazon also offers volume discounts.  If you are processing between $3,000 and $10,000 a month, the discount rate lowers to 2.5% and the transaction rate stays the same at 30¢.  For volume between $10,000 to $100,000 a month, the discount rate lowers to 2.2% and the transaction rate is still 30¢.  If you are processing high volume more than $100,000 a month, the discount rate lowers to 1.9% and the transaction rate is still 30¢.  While this might seem to be a good deal, you can get a merchant account in the United States for probably the same and maybe even a lower transaction rate.

High Risk ProcessUSA

High Risk Merchant Services is another merchant service provider option available its headquarters are in Maryland, United States.  It offers customers the opportunity to get the merchandise but billed in installments.  ProcessUSA underwrites high risk transactioons at each purchase at the time of the transaction.  The line of credit is not revolving - it's for that purchase.  The customer might be able to purchase your goods and not make a payment for 90 days, or maybe no interest for six months.

Click and Buy

Click and Buy was founded in 2000 and is located in London.  For United States merchants, there is a $19.95 registration / set-up fee and $19.95 monthly service fee.  The discount rate is 2.9% and the transaction rate is 35¢.  So if you only had one transaction that month, let's say $100.00, your monthly bill would be about $23.29.

Google Checkout

Google Checkout was founded in 2006 and based in California, United States.  Their rates seem to be comparable to Checkout by Amazon.  If your merchant average monthly volume less than $3,000 a month, the discount rate is 2.9% and the transaction rate is 30¢.  If the monthly volume is between $3,000 and $9,999.99, the discount rate is 2.5% and 30¢ per transaction.   Volume between $10,000 and $99,999.99 will lower your discount rate to 2.2%, while keeping the transaction rate at 30¢.  If your volume is over $100,000.00, the discount rate is lowered to 1.9%, but the transaction rate is still at 30¢.

Some merchants who were using Google Checkout from the start were not happy when Google Checkout raised their rates (discount rate was 2.2% and the transaction fee was 20¢.  Some even wondered if Google would keep this business model, but their post back in March 2009 (Google Checkout Fees in 2009) let's the readers know that upcoming enhancements are to be expected.

Revolution Money

Revolution Money was founded in 2007 and headquartered in Florida, United States.  One of the founders is Steve Case (American Online Founder).  It offers several payment products: RevolutionCard, RevolutionGift prepaid card, and Revolution MoneyExchange.  The RevolutionCard is an alternative to Visa / MasterCard brands.  The interchange rate is low (.5%), compared to the discount rate of an Internet Merchant Account. 

The card is accepted by about 650,000 merchants currently.  Right now, the RevolutionCard is supported by the merchant account providers:

• Chase / Paymentech
• RBS WorldPay
• Fifth Third Processing Solutions
• Cardinal Commerce
• Keystone (Petroleum Processing-Pay at the Pump)
• Auric Systems

Share-It / Digital River

Share*It! is a service of Digital River, established to help merchants sell their digital goods online.  It offers two plans: share-it! VALUE and share-it! FLEX.  While the discount rate is a bit higher, ranging from 4.9% - 8.9%, its services should be considered if you are selling software / scripts online.  Share*it! will complete the transaction on its secure web server.  They will scrub the transaction for you, even offering the consumer the chance to create an account with them.

They also can manage the downloads, registration sign-ups, backups, and licensing.  Selling downloadable goods can be very high risk, but share*it! assumes that responsibility so you don't have to. 

Obopay

Obopay was founded in 2005, located in California, United States.  Obopay is a bit different in that it focuses more on mobile payments.  You can buy, transfer money, or pay with any mobile phone using Obopay's mobile application or through text messaging.  You can also access Obopay's website through a PC or on your Internet ready mobile device.  You can fund your Obopay account with a credit card or a bank account.

Paymate

Paymate was established in 2000 and they are based in New South Wales, Australia.  Their services are available in 57 countries.  In the United States, buyers pay 3% plus 50¢.  There is also a $15.00 chargeback fee imposed on the merchant if you lose dispute.  Paymate will first respond to the initial inquiry from the bank when a chargeback happens.  You do not need to register with Paymate to make a purchase.  The seller though will be put through a process before he / she can use Paymate to accept payments and should be able to project a least $36,000 in volume for the next 12 months.

Comments

Andy said...

Nice site - keep up your proper work.

11/4/2009

Steve said...

Thank you for nice article.

11/15/2009

Name
URL
Email	Email address is not published
Remember Me
Comments