Accepting Payment on Your Website (or banking nightmares)
One of the first things you have to decide as an online business person, is “how shall I process payments?”. There are a lot of options. It depends a lot on who your e-commerce runs through. You could just skip all that and use something like PayPal that processes the money in a safe environment for you.
We use Infusionsoft. When I began using Infusionsoft 7 years ago, they didn’t have their own processing option. My old business had safely used a merchant account that was referred by my bank. At the beginning, Infusionsoft recommended a merchant account who worked in conjunction with authorize.net. That was a year of nightmares. A new business person may not have known better, but I had had 34 years of blissful service from my bank’s preferred merchant account. I knew that it is not normal for a merchant account to wait several days to deposit your money or to hold back a percentage in case of charge backs and not tell you, or to hold money for no reason, or to surprise you with odd fees here and there.
After a year, I abandoned that merchant account and went back to the one I’d been using for my other business. If I would have investigated further, I would have known that a brick and mortar merchant account works the same way as any other as long as authorize.net is there.
nothing stays the same
So, I went back to blissful service from the same company who’d been serving us for years. THEN, the bank switched merchant accounts. My bank selected them, so I went along and continued to do business, naively assuming things would continue as they had. I had a great rate and Amanda had a great report with the back office.
I’ve been telling my customers to use their banks. Every time I checked one of the services the CRM/Marketing/E-Commerce softwares pushed, I’d tell you to be careful and check the rates and stay with their local banks if possible. Of course, PayPal is always easy too. I know a lot of you are using Stripe as well.
it gets worse
So, I’m going on 40 years with my bank and happily paying my fees every month.
In the meantime Infusionsoft came up with their own offering, Amanda checked it out and they were taking 2.9% – “Well! That’s highway robbery. I’m staying at my bank.” A year later, Amanda said, “why aren’t we just running things through Infusionsoft?” I said, “no, local banking relationships are important. It’s safe and comfortable.”
My monthly bills were starting to be higher, and I think great! “Business is good.” Then we had a slow month. The only slow month since this business started. The merchant fees came out and they were at 10% of my bad month. THEN I looked. I gave it to someone to look at and they said American Express was taking out a huge amount depending on the card everyone uses. Okay, so I had a decision to make, do I stop taking American Express cards?
I figured up what it would cost to run our last year through Infusionsoft vs. TSYS (our bank’s merchant account), and the difference ran between $800-$1000 a month! I’d NEVER seen a notice of rate changes. That’s $12,000 – what we could do with $12,000? And is it more like $36,000 over 3 years?
what the bank said
The first thing I did was called my bank. I’m not even going to make you go through those conversations and emails. The bottom line was – I should have been looking at the teeny tiny print on the statements each month. I should have called in every single year for rate evaluations, so shame on me. The good news was – they didn’t want to lose my business (money) and they have a rate matching policy so TSYS will charge 2.9% like Infusionsoft. Blllllaaaaaaah.
I got my statement. It was $1100 less than it normally is. It was $80 higher than what they agreed to, and it had a full page of rate increases to my promised rate that would stay for 12 months. Including a .15 per transaction fee and a dispute clause that would not return the fees once the dispute was accepted or denied. That means if a dispute for 20,000 was put through, even after I refunded it, I would still have to pay the bank $600. I don’t know about you, but I think that’s nuts.
you can’t just take PayPal
My first instinct is to forget the merchant accounts and work only with PayPal. They’re so easy. But not everyone has PayPal. Ashlie’s been using the Infusionsoft processor for a while and has no problems. I put it in a FaceBook group and they’ve had nothing but problems. On FaceBook, you usually get the people who are looking for solutions to problems, not the ones where everything is smooth and easy, so it’s hard to judge.
I learned a long time ago that I have to call the phone and cable companies once a year to make sure they don’t add and add until they’ve increased the bill so high you can’t pay it. It’s really unfortunate the banks have gotten the same way.
why am I sharing this?
I’m hoping my experience can save you the experience.
- Check your statement monthly
- Know your numbers and go over it with a fine tooth comb
- Call them on it
- Move if you have to
- Hold the people you feel you have a good relationship with accountable
my story is not over
I still need to decide what to do with my merchant account. I had bad experiences changing, so I’m still not sure that changing is the right thing to do. Though it may be. I copied my banker on this, and though she was on vacation at the time, she is back now and I haven’t heard from her. I think my next step will be to be sure she gets a copy of this blog. I also think I’ll be meeting with some of my advisors on how to proceed. (See week 2 of Building Abundance, and make sure you have professionals you can rely on.)
Share your experiences with merchant accounts in the comments!
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