US online shops - advice needed!

[Tjobbe]

I'm just dealing with someone from america who is looking for me to provide them with an online shop. I have a couple of qustions about online shops in the U.S.

In the uk, you need a Merchant bank account set up to allow you to recieve money from online transactions and also a payment service provider who takes the money from the shop and processes it to your bank account.

Whats the score with the US, does anyone know?

This client says they accept all cards but not amex or diners, and that they already have a "Thawte" secure server.

can anyone give me any advice?

 

[Corey Bryant]

You do need a merchant account of some sorts. There are third party payors & the discount rate is higher than if you would get your own merchant account. Plus it depends on what they are selling. A buddy of mine was getting one & one processor wanted to have a reserve rate of 25% for 6 months. I set him up with one without a reserve rate. Most are going to be aroun 2.25-2.60% discount rate & .25-.50 transaction fee (charged everytime you hit the gateway).

As far as processing them - you do want it to be on SSL so they seem to have that part already taken care of.

Let me know what else you need - sorry not too sure what 'score' meant - I took it to mean something like the lowdown LOL - or rather you wanted to know what the procedures might be?

 

[Tjobbe]

score = lowdown, good guess Corey! ;o)

ok, so heres the scenario,

My client in the U.S, want to sell tickets for entrance to theme parks. Sometimes with accomodation included.

What is the exact procedure for when the customer types in their CC details on the shop, untill the money goes into the bank account?

Not sure what you mean by reserve rate, but in the uk you would get charged a percentage (of around 2%) for the payment service provider, who take the CC details and pass them onto a merchant account, and then a further 2% for the merchant account to pass it into your bank.

It's not fair ;o)

So in short, I need to know exactly what to say to my client, i.e "you need to get a merchant account from your bank and we will both find a payment service provider together"

Thanks for any help Corey..

 

[Corey Bryant]

The discount rate would be equal to your 2% & 2%, but over here it is about 2.30% total. No extra charges for transferring the money over to the acquiring bank.

The reserve rate is a lot different - usually it is not needed. In the scenario that you prodided, it does not seem to be needed. Basically the reserve rate is an amount of money that is held in a separate bank account for a determine about of time. It can range from anywhwere from usually about 10%-25. Meaning that if your clients sold $1,000 a day, then at 25% - $250 would be held for say 6 months. And then after 6 months, that money would start to be returned to you. This is usually for high risk (porn, gaming, psychic, & a few others depending on which processor is used).

The transaction rate is basically the fee to access the gateway. (And not I am talking about the one that I know A batch is ran every night between midnight & 8a to close out the previous day's charges. That is when the money is going to be transferred. But once your client gets the OK from the bank (say @ 1p) - they know that the money is theirs.

There is something also called a pre-auth(orization) which verifies the customer has the money & then dedicated that money to the merchant. The merchant can come back within a few weeks (time depends on the issuing bank) and do a post-auth(orization) & sale to actually get that money transferred to the acquiring bank.

Now that I re-read it for the accomodations part - that is usually handled differently because of the risks involved. A lot of times what happens is the customers cancels the trip & a chargeback might be created. This would be where the customer calls the bank & tells them that they did not make the purchase after all, or something like that. The issuing bank makes a requests to get the money back & the merchant is fines usually about $25.00. So maybe they can re-think their options on that or they just set it up & go thr another process to book the reservations.