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    32 Replies Latest reply on Jan 20, 2008 11:38 PM by alexeig

    Authorize.net

    NatOnline Tracker
      We offer Visa/Mastercards via Authorize.net, but we have the possibility to ad Discover and AMEX as well.

      My question is do you think it worth to offer Discover and Amex via Authorize.net or via Paypal?

      Thanks
        • Re: Authorize.net
          CorpCons08 Ranger
          Hmm.. I have never had a client use Discover, but always have AMEX.
          What does the cost basis look like for each service?

          CC08
          • Re: Authorize.net
            CorpCons08 Ranger
            Nevermind...you just wanted to know if it was worth adding.
            Yes, it is worth adding the service.

            CC08
            1 of 1 people found this helpful
            • Re: Authorize.net
              Lighthouse24 Ranger

              My opinion as a business owner and customer is: Amex yes, Discover no.
              • Re: Authorize.net
                LUCKIEST Guide
                Nat, Go with AMEX, Love AMEX, Don't leave home without AMEX.
                Suprised Discover is still around. LUCKIEST
                • Re: Authorize.net
                  moogrdotcom Wayfarer
                  As a consumer i absolutely LOVE my discover card. It PAYS to discover. I mean, no other card gives me 12.9% interest rates with 5% cash back everywhere i shop. Get discover - give them a call when you get your account and discuss with them in how to join incentive programs if you wish. You too can be on the discover network.

                  AMEX is a double edged sword. Great for business users and expense users but my oh my they're QUICK TO CANCEL/CHARGEBACK and ALWAYS FIND ON BEHALF OF THE PURCHASER.

                  Get all cards and you will be happy. Discover may not be the most used but most merchants just charge a one time setup.
                  • Re: Authorize.net
                    amspcs Ranger
                    Re rates, Discover costs essentially the same now as V/MC. It USEd to cost a few pennies more,but Discover recently changed their business model. They and V/MC are essentially the same.

                    Let me answer your question this way: Assuming costs of V/MC/Disc are essentially the same, why would you NOT accept Discover and instead chose to hassle and argue with the customer over payment options?

                    Here's a better idea: When a customer decides to patronize you, make his experience as positivet and hassle-free as you possibly can. When he/she decided to purchase something, take WHATEVER payment form them offer, put a HUGE smile on your face, then say 'thank you'. Do NOT hassle the customer with 'we don't accept THAT card, we only take THESE cards' and so on. The LAST thing you want to do is hassle your most valuable asset, your customer, who hopefully (if you make the shopping experience pleasant) will return and patronize you again and again, and tell all his friends to do the same, for years to come. Even if the payment type the customer offers you costs you a few cents more, DO IT....a customer is worth much more than a few pennies in the long run.

                    Bottom line: It's all about business mentality. Concentrate on the big picture, you have more important things to do in order to make your business successful then worry about a few pennies here and there.
                    MAKE YOUR CUSTOMER HAPPY AND THEY'LL MAKE YOU HAPPY.

                    Caveot--If your cc processor is trying to charge you a setup fee to add Discover, or if the Discover rates quoted are higher than your V/MC rates, then you're being ripped off. Please reply to me via this forum and we'll talk about dealing with that issue.

                    Good luck
                    BG
                    www.merchantservices-help.com
                      • Re: Authorize.net
                        NatOnline Tracker
                        Customers can pay with their Discover or AMEX cards via Paypal on our site right now, but from my statistics 90% of my customers pay via VISA cards and 10% with MC from my merchant account. The fees are higher for me when people pay via Paypal, and I don't have any statistic from them to know which cards my customers use to pay me. I can only know if they use their Paypal account or Credit cards via Paypal.

                        This is why we offer both Visa/Mastercad on our merchant account, and Paypal (with all the cards their offer to pay with).
                          • Re: Authorize.net
                            amspcs Ranger
                            Dear Nat:

                            Generally, following are the average ratios for credit card usage:
                            Visa/MC is about 60/40
                            Visa & MC/Amex is about 70/30.
                            Discover lags way behind. BUT...if a customer prefers Discover for whatever reason, TAKE IT!!!, why in the world argue with him about it?

                            Re the wisdom of a merchant accepting only Visa/MC and not American Express, let me be as brutally honest as I can be.

                            From MY point of view as someone who makes a living on Visa/MC processing residuals, it's obviously great that a merchant takes only V/MC and refuses Amex. More earnings for me. 98% of my earnings come from V/MC transactions, residual earnings from Amex are insignificant aside from a paltry one-time signup bonus.

                            From YOUR point view as a merchant, I sincerely feel most merchants who accept V/MC but refuse Amex are being shortsighted and somewhat foolish.. Reasons:

                            #1, the LAST thing you want to do with a customer is hassle him when he tries to patronize you...see my previous post on this subject.

                            #2, contrary to popular myth, in many interchange scenarios (particularly for ecomerce vendors) Amex is NOT much more (if any) expensive than V/MC, you're probably talking about mere pennies either way in any event.

                            #3 There are many many reasons why consumers strongly prefer to use their Amex card, such as corporate reimbursement requirements, rewards points, security and protection reasons, etc. As a business owner trying to make sales, why would any merchant intentionally eliminate these folks as potential customers? Their money is as good as anybody elses'.

                            Those are my honest opinions, even to my own detrement. Hope this is of value.

                            BG
                            www.merchantservices-help.com
                            amspcs@juno.com

                              • Re: Authorize.net
                                xenopod Adventurer
                                I did not think of it that way. I defintely think you have valid points!
                                • Re: Authorize.net
                                  NatOnline Tracker
                                  Thank you for your input,

                                  I think I will leave my merchant account like it is. AMEX and Discover customers can use their cards on Paypal.

                                  The AMEX rate is almost the double of Visa/MC and Discover even more with a setup fees. I will just give the option to pay with these cards on Paypal only.
                                    • Re: Authorize.net
                                      amspcs Ranger
                                      The statement about Amex rates being double that of Visa/MC rates is absolutely _in_correct.

                                      Accurate statements would include:: Amex rates are double of V/MC QUALIFIED rates. These days, few
                                      (and decreasing every year) Visa/MC transactions qualify as "qualified'.

                                      Truth is: Amex rates are about the same, maybe even a little less, than many V/MC NON-QUALIFIED rates*.*

                                      Unfortunately, for internet and mail/phone order merchants, every single one of their transactions will fall into this non-qualified realm by virtue of being non-swiped.

                                      This is very easy to ascertain. If you're a non-swipe merchant, simply do a little math with your monthly merchant statement. It will tell you what your total V/MC volume was for the month. Then look at the total amount of the bill. A lot more than the 1.59% or whatever you thought you were paying, isn't it. That's because mid-qual and non-qual surcharges were tacked on.

                                      If anyone would like to learn a little about how Visa/MC rates (qualified, mid-qualified, and non-qualified) work, may I suggest you review the following page:

                                      http://www.merchantservices-help.com/nonqualrates.html*
                                        • Re: Authorize.net
                                          NatOnline Tracker

                                          I am not talking about qualified, mid qualified, and non qualified.

                                          This is the info I've got: 2.39% (Visa, MasterCard, Discover) 3.85% (American Express)

                                          I might be exaggerating a little bit when I said the double, but still that's higher than V/MC.

                                          I've got more than 90% of qualified transactions, so the mid qualified or non qualified are insignificant.
                                            • Re: Authorize.net
                                              amspcs Ranger
                                              Good morning, Nat,

                                              Don't mean to sound argumentative, but if we're talking about Visa/MC, we ARE talking about qual/mid/non.
                                              That's the way it works.

                                              In your case, 2.39% IS your mid-qual rate. Since you are a non-swipe merchant, they are callling it your 'qualified' since they understand none of your transactions will fall into a 'true' qualified bucket because none will be card-in-hand swiped. That's commendable--at least they're being straight with you. I might add 2.39% non-swiped is a pretty decent rate. The lowest mid I've ever soon is around 2.09%, which translates to $2. out of your pocket for every $1000 you process. So unless you're processing mega-bucks, (say $25,000 per month or more VMC) you've probably got pretty fair numbers there.

                                              I still take issue with your statement that 90% of your sales fall into this qualified 2.39% bucket. That would be very very unusual in today's market, since that would mean you almost NEVER get paid with a V or MC classified as a corporate card, foreign card, B to B card or several others, all of which would fall into the higher non-qualified rate bracket. That's almost impossible to do these days. And that non-qualified rate would be much closer to the Amex rate you are quoting (which @ 3.85 also sounds about right).

                                              More likely, you ARE having a bunch of your sales fall into non-qual, but you just don't see it on your statement. Very undersandable, most statements by design are very difficult to make heads or tales out of.

                                              I suggest you do the following. Look at your statement carefully. Take the bottom line fee amount you were charged that month (this is probably the sum of TWO separate numbers on your statement--the discount deducted from each daily batch, and the overage amount debited from your business account at the end of the statement period). Then, divide that number by the total V/MC volume you did that month.
                                              By this means, you arrive at the true discount percentage you actually paid, which you'll find is probably in excess of the 2.39% you expected. If you'd like a little help in this regard, let me know and I'll help you out.

                                              Incidentally, here's another thing to look for on your monthly merchant statement: I'm positive you're getting some (probably a lot) of business on signature debit (aka check cards) cards. Are you being charged the same 2.39% or more on those too? If so, you're being overcharged. Signature debit discount rates should be less than the 2.39% you're charged for credit cards since interchange cost to the processor is much less for these cards (remember the big Walmart lawsuit w/V/MC a few years back??--this is what it was all about). If the processor isn't giving you back the difference and is keeping it for themselves......tht's not fair. If that's the case, you might want to question your processor on this since you're being overcharged a tad.

                                              Have a great weekend.
                                              BG

                                              BG.
                                                • Re: Authorize.net
                                                  NatOnline Tracker

                                                  Hello Amspcs, how are you doing this morning?

                                                   


                                                  Thank you for your explaination, you are probably right like you said:
                                                  "More likely, you ARE having a bunch of your sales fall into non-qual, but you just don't see it on your statement. Very undersandable, most statements by design are very difficult to make heads or tales out of".

                                                  Anyway, there is not much I can do, beside paying my bills :-(
                                    • Re: Authorize.net
                                      xenopod Adventurer
                                      We are launching a site tonight for a client (www.bigdietclub.com) for their site we implemented aMember Pro and they use authorize.net via CDG Commerce. Who are you going through for Authorize.net?

                                      You asked about PayPal versus Authorize.net I would say since you already have the authorize.net account although there are more upfront fees involved if you expect to get a lot of customers using either of those cards you will make more through your merchant account then by having PayPal handle transactions for you.

                                      As many have said AMEX over Discover card between AMEX and the MC/Visa you have for your merchant account you should be able to handle a wide enough variety of incoming customers.

                                      Maybe for Discover card you should run those customers through PayPal if you ran into someone who could only pay with a Discover card! ;) :)
                                      • Re: Authorize.net
                                        LUCKIEST Guide
                                        WOW, Twenty Eight (28) posts before this one AND "Not Answered"??


                                        • Re: Authorize.net
                                          Wayfarer

                                          In my experience, neither Discover nor AmEx have start-up costs or statement fees: they are "add-ons" to your existing merchant account, and thus - yes, they are totally worth adding. You can also establish Discover and AmEx merchant accounts directly with issuers (Discover/Novus and American Express Merchant Services, respectively), and in my experience, the rates are 2.2% for Discover and 3.5% for AmEx, non-swiped. Neither of two ever had "non-qualified" rates, and thus, costs of accepting Discover and American Express are more straightforward than Visa/MC.
                                            • Re: Authorize.net
                                              amspcs Ranger
                                              Alexeig--

                                              You are basically correct. Discover USED to be a separate entity. However, very recently (last quarter 07 I think) they have changed their business model and most V/MC processors now include Discover with their VMC offerings at no additional charge. Amex remains separate, their rates are 2.75-2.95% depending on volume, average ticket, and industry type. You are correct, they do not have mid and non-qualified upcharges as do Visa and MC; they have one rate which is approximately the same as V/MC mid and nonqualified.

                                              Traditionally, the only disadvantage to accepting Amex and/or Discover in addition to V/MC is the necessitiy of having to deal with and reconcile the additional separate statements from Amex and Disc in addition to the V/MC statement. It also sometimes creates confusion when reconciling the daily batch statements with the bank deposit summaries. However, from a pure businesss standpoint, it certainly makes sense to accept all cards and not put yourself in the position of having to turn down a customer trying to patronize
                                              y ou because you 'don't accept that card'.

                                              Incidentally, most merchants don't know this, but there IS a way to avoid Amex per item fees, but most processors don't tell their merchants about it since it is a 'profit center' for the V/MC processing network they aren't willling to sacrifice. If you are a business doing significant Amex volume, .20 to .25 cents a pop adds up fast. If anyone wants to know how it works, respond to this post and provide your email contact info, and we'll talk about it.

                                              BG
                                              www.merchantservices-help.com