Robert,
Whatever software you choose to use for your store will have a list of
gateways/processors that they work with. So, you will have narrowed down
the choices there.
You have 3 parts to the system. The software, the processor/gateway and
the merchant bank account.
The software you will choose based on the features you need. Any
configs related to the OS are here. The cost and license is dependent
upon what solution you choose.
The software will communicate to/from the gateway/Payment processor.
The software will be configured to communicate the way the processor
works.
The processor or gateway is the entity that does all of the
communication between institutions to determine if the transaction is
authorized. These are the guys that you'd get the the terminal from in a
traditional brick and mortar store. Often you get a "Virtual Terminal"
with your account now (a web interface to run cards that you have in
hand). For their part they get a little piece of the action.
The merchant account is a special bank account for dealing with the
credit card payments. Usually, the funds that are settled in this
account are swept to your business account automatically. For their
part, the merchant bank gets a little piece of the action.
The requirements to have a merchant account are about the same as
having a business bank account, perhaps a bit more strict. You will need
your fictitious name statement and/or business license to prove you are
that business and are legally able to use that name and the only one
that has that name in your locality. You need to also be a "good risk"
for the bank. If you have bad credit you may not be approved. When you
are approved you will be approved for a certain max transaction size and
max transaction amount total per month.
I can't recall, but I think it's the processor (maybe the bank) that
also has restriction on the stuff you can sell. Most will not process
sales for high fraud stuff. This is mostly because of chargebacks. If
they have to charge back much $ it means additional costs to them and
you, and risk to the bank that you may have already spent the $ and they
might be out the $ if you fold because of major chargebacks (the reason
for the max per transaction and per month). Also there are opportunities
for you to do less than legitimate stuff, so they want to know that you
are on the up and up.
Your business bank account will not charge you anything special to
receive these funds from the merchant bank.
My solution for M5Hosting.com is ModernBill as the software. It is
specifically designed for the hosting business. I paid them to set it up
and do some integration with the payment processor. They had a deal on
rates arranged with a particular processor. So, I went with that
processor, figuring that they must have an easier time integrating with
them than others. True or not, that was the logic behind that decision.
I also didn't really have experience that told me that one was better
than another, so I was an easy sale there. :o)
Our web site currently still has a PayPal subscriptions checkout, not
the ModernBill software. The reason is that when I bought ModernBill, I
bought the latest version at the time (version 5) it was not even close
to ready for production use. I felt completely cheated at the time. It's
been more than 8 months now, and it's most of the way there... just
about ready for production use. I take phone orders in the ModernBill
system and any orders that need to be customized, and don't fit neatly
in to one of the pre-packaged SKUs on our web site or that are
multi-server orders.
Overall, the whole system of getting up and running selling stuff on
your own site with your own merchant account is so much more painful and
complicated than it needs to be, or should be. It's this way because of
the way the banking system is, which is the way it is because it existed
before computer and communications technology (pure conjecture there).
Good luck !
Mike
On Tue, 2007-08-07 at 16:01 -0700, Robert Donovan wrote:
> > I think we began to outgrow PayPal at around 100 transactions per
> > month. At that time we began the search for a solution with everything
> > we wanted. We still offer PayPal as an option, but have set up a real
> > merchant solution for it's flexibility and tracking features. Now we are
> > doing about half on PayPal and half on a different solution specifically
> > designed for hosting business.
> >
> Mike,
>
> Would you mind elaborating a bit on the procedure for setting up a
> merchant account? I have been meaning to do this for a while, but have
> only just recently gotten to the point where the business needs really
> justified it. Most of my clients up to now simply paid me by check as
> soon as the job was signed off. I've heard a few misadventures in this
> area where Linux was concerned and was looking at Authorize.net. What
> payment gateway do you use, and is there anything Linux specific
> needed to get one's site to accept CCs this way?
>
> Thanks,
> Robert Donovan
>
>
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