On 12/15/05, swill <sillewille / gmail.com> wrote:
> Sorry this is so far off topic, but there are a lot of smart,
> experienced people here.
>
> Anyone have thoughts about using credit card gateways vs. something
> like the PayPal merchant solution?  It seems like the gateways just
> pick your pockets clean.  Experiences?  Recommendations?  It seems
> like the PayPal solution might be a little cheaper to start with.
>
>

Granted my opinion is biased as I work for a payment processor, but if
you are starting a real business as opposed to a hobby then get
yourself a real merchant account.  If it's a small home based business
then there isn't anything wrong with Paypal at all.  I set my wife up
with a paypal business account and it works great for her.

Spend some time shopping around.  Different payment processors are
good in different areas.  For example the company I work for
specializes in membership sites and recurring billing, and we don't
have nearly as many features for shippable products.  Authorizenet is
good for shippable products but sucks for recurring billing.  Verisign
is pretty good at both but you will pay a lot by the time you get all
the features you want.

You should not pay more than $50 or so setup fee on a merchant
account, and total monthly fees of around $25.  A good discount rate
for an internet merchant account is around 2.5%.  2.1% is about the
best you can find, and if you see rates below 2% it's a lie.

One of the main things to be aware of with any third party billing
company is that you don't own your customers.  Technically the
customer is a customer of the billing company.  This is especially
important when in the future you might grow out of a solution like
Paypal, and you find out that you can't take any of the credit card
info with you.  If you run a subscription based site this is a bad
thing.  If you sell shippable products it's not so big of a deal.

And lastly, always read the contract.  Most people don't, and they should.

Chris