Switching from a Merchant Gateway to 2Checkout.. Is this a bad move?

[ramystyle]

Hi,

 

I'd like to have your input on this. We've been dealing with OptimalPayments from some time now but we are not happy with them because there are always hidden or surprise transaction fees, their monthly statement are hard to understand and their support is garbage.

 

We applied to 2CO and got approved. I know you'll tell me that the 0.40$ per transaction and 5.5% are ridiculously high however I compiled an excel sheet with our last year's transactions and had we been with 2CO, we would have saved more money ! The main resons are:

- There are no monthly fees (Currently paying 20$/month)

- The 0.40$ is fixed (OptimalP would sometimes charge us over 0.5$ from some transactions.

- and the 5.5% compared to a 2.5% doesn't make such a huge difference (We're talking of a 2.5$ difference on a 100$ transaction)..

 

Here's where I'm scared.. Some of our clients have over 50 domain names in their accounts.. By doing the switch to 2CO (Third Party Gateway), this would be mean that each time a domain is set to be renewed, the client has to login and pay the invoice manually (the first time only I guess... As the payment will be recurrent for future years).. Doing this for over 50 domain names will become a hastle and I will probably lose some clients to this.. right ? Ideally, their credit card would get charged automatically and no hastle to login and enter your cc info each time (Espacially if the client has many products or domains..)..

 

So I'm sort of stuck here thinking "Should I stay with OptimalPayments, get screwed each month but at least I would have the peace of mind of not losing clients"? or "should I make the switch, save some $$ and hope that each client will login each time to renew their product"..

 

Anybody went through this before and could share their experience or opinion ?

[Data 1]

2checkout does more things in the background if you haven't dealt with them before. They "hold" an amount of the money per transaction in a "reserve" they call it, and release it after 30 days. This can get complicated in recurring payments, there would be some real complicated math to tell exactly what is being deposited and when. It seems to take about 2 days for them to deposit the money in your bank also.

 

I have been with Paypal for over 10 years, working with 2co for 2 years and are moving to a merchant gateway.. today actually I'm signing up. The 3rd party worked for me for a startup, but I feel accepting cards directly is more professional and causes less confusion with customers. I started 2checkout because an array of new customers I inherited simply hated paypal and did not want to deal with them, even though my paypal account doesn't require them to have a paypal account to pay with card (another $19 a month). Most of them I chatted with would have preferred to enter credit cards directly or call me with a card number.

 

So I am where you are thinking of going, and I'm going where you currently are LOL.

[Alex - Arvixe]

"They "hold" an amount of the money per transaction in a "reserve" they call it, and release it after 30 days."

 

Could you verify / go further on this? 2CheckOut has always withdrawn my funds on time, every Tuesday.

[nobaloney]

I can't respond to Alex's post because it's been years since I used 2CheckOut.

 

For many years I've used both PayPal and a traditional Merchant Account, and I've done the math... and yes, It's possible, if you don't run enough business through a Merchant Account, that it'll cost you more. That's a niche that PayPal, 2CheckOut and others cater to. But as you do more with your merchant account you eventually end up paying less.

 

Personally, I don't think the decision should be based on which is cheaper, but rather on which will make your clients feel more comfortable dealing with you.

 

And that's why we use both. We use PayPal for clients who feel more comfortablel clicking to pay us each month, and we use our Merchant Account for our clients who could rather give us their card number once and not worry again.

 

One thing I can address, since I did look at 2CheckOut's rates a few months ago: 2CheckOut is much more expensive than is PayPal; if you can get PayPal, and if your customers will use it (a percentage of mine will; even those without their own PayPal account) it can save you a lot of money over 2CheckOut.

 

Jeff