Internet Payment Gateway

I’ve had limited experience with 2CO and it’s fine for some people. They take the highest percentage of any gateway that I know about. Actually, they’re not a gateway because they don’t run credit cards on YOUR merchant account...they’re actually kind of a payment clearing house. The charge on the customer’s card says 2CO, not your company name.

For my ecommerce customers, I usually make 2 recommendations. First, if they’re low tech, just want it to work, don’t want to take a lot of time understanding it, and their average dollar sales is sizeable (over $50) then I recommend that they use PayPal. Some people may not realize it yet but you can use your credit card when you pay with PayPal. Also, they can take a check, debit card, direct draft, wire transfer, etc, etc. PayPal takes a % of the total dollar sale. It varies on the amount but I believe it is about 5% for low dollar sales all the way down to 2-3% for $200+ sales. You can research on their site to find out for sure. The drawback of PayPal is that they “take control” of your customer. That is to say, your customer will leave your site and go to PayPal to finish the transaction. Although you can customize it somewhat, it’s a PayPal branded site. But, they’re the best I’ve seen for fraud prevention. Another great thing is that there is no monthly fee. This is great if you’re doing infrequent sales.

If you don’t like PayPal, you’ve already got a merchant account, you do a lot of transactions (more than 2-3 per day) and you want to control the entire checkout process OR you are selling a lot of low dollar products then I recommend...PayPal. Huh? Yep, about a year ago PayPal bought the credit card gateway business of Verisign. (I hate Verisign domain name service, but they’re a terrific credit card gateway.) So, you can have a gateway with PayPal Payment Services which is NOT the same as regular ol’ PayPal. In fact, my company’s ecommerce site was Verisign and PayPal and now that they were acquired we take PayPal and PayPal.

The main difference is that, like a traditional gateway, you control the entire checkout process. The customer never leaves your site, you just pass some key information (like the cc#, expiration, zip, etc.) to PayPal Payment Services and they pass you an approved/disapproved notification. When you’re checking out on many websites and they tell you to wait up to 2 minutes, that’s what is going on. Gateway’s are nice in that they don’t charge you per transaction but they do charge you a monthly fee. So, if you aren’t doing very many transactions then it can be costly...somewhere in the neighborhood of $20-50 depending on the plan.

Final recommendation: Without knowing your specifics, consider starting with PayPal and then “upgrade” to a full merchant account when you start doing more than a handful of transactions per day.