Money In Transit - Papal and BOA - Someone is holding onto my funds!

Today, I'm focusing on the fact that when I transfer money from my PayPal merchant account to my Bank of America checking account, it disappears for a surprising amount of time.  On Thursday Sept 2, 1pm PST, the money left my Paypal account. It's hard for me to imagine why it was not in my account on Thursday afternoon. It's really hard to imagine why it's not there on Friday, Sept 3. Or Saturday Sept 4.  Yesterday was  Sunday, Sept 5th (not there) and today is  Monday Sept 6th  (Labor Day). Still not there?  Who thinks it'll be there on Tuesday Sept 8th when it opens for business? End of Day?
September Transfer

Withdraw Funds to a Bank Account (Unique Transaction ID #45P018402U20xxxxx)
Total Amount:		-$26,000.00 USD
Time:		13:20:56 PDT
Status:		Completed
Subject:		Bank Account
Transfer to:		Bank of America (All except WA and ID) Checking (Confirmed) x-5119 -------------------------

Looking back at August's transfer...I see that the funds left on Aug 6th from Paypal in the morning and arrived three days later on 8/09. During those three days, who had the funds!

Withdraw Funds to a Bank Account (Unique Transaction ID #5TJ79122Y2******)
Total Amount:		-$4,000.00 USD
Fee amount:		$0.00 USD
Net amount:		-$4,000.00 USD
Date:		Aug 6, 2010
Time:		11:14:12 PDT
Status:		Completed
Subject:		Bank Account
Transfer to:		Bank of America (All except WA and ID) Checking (Confirmed) x-5119

BOA reported receipt of the funds:

Description:		PAYPAL DES:TRANSFER ID:5X8J24DC******* INDN:SPELLINGCITY.COM INC. CO ID:PAYP
	Posting Date:		08/09/2010
	Amount:		$4,000.00
	Type:		ACH Credit
	Account Number:		Business Economy Chk-5119

July:
left Paypal on July 4th, 10:32 am PST.
Arrived BOA on July 7th.  No time indicated.
Again, three days to transfer.

So why is September so slow, 8 days? It is Labor Day? Is it that it is a larger sum and so they'll hold it longer?

PayPal Merchant Account Reliability

Frankly, over the last month, my Paypal Merchant account has been a lot less reliable than I expected. I keep getting this message:

History Search is currently unavailable. Please try again later or call us at 866-837-1851.

Sometimes Paypal gives me a security message about verifying the ownership of my account. I called once but it was time-consuming. Usually, I just wait a few hours until the message disappears.  IS the paypal merchant account getting flaky?

Passing the credit card expense directly to the consumer

I wondered if some company would start passing the cost of credit card processing onto the consumer. I just paid a bill online and it appears, although I'm not sure, to be the first time that I've seen someone pass the credit card expense directly onto the consumer. I notice that they don't take Visa, does Visa refuse to participate?
**************************

Thanks for making your tuition payment through US Tuition, the easy way to pay.

To get started, just enter the name of your school and click the MAKE A PAYMENT button. Note: MasterCard^®, Discover^®, and American Express^® cards are accepted for tuition payments.
Visa^® does not participate in the tuition payment program at this time.

When you use this service, they charge a 2.8% "convenience" fee. In their FAQs, they say:


Does the School profit in any way from the fee charged?
No, the convenience fee is paid to USTuition LLC. The School receives no portion of the fee.
 

Will a parent who is entitled to a refund and who paid using USTuition LLC receive all or a portion of the convenience fee back?
No, the convenience fee is non-refundable.

American Express AcceptPay

I got this in the mail:  At American Express OPEN, we value you as a Cardmember and understand that collecting payments and managing cash flow is crucial to running your business. We're always working to find new solutions to help our Cardmembers and business owners run and mana ge their businesses even better. That's why we're proud to bring you AcceptPay, an online payment acceptance solution built for business.

Then there's some stuff about free for 60 days. It's not clear to me if this is a full merchant account or what.  They certainly don't provide any pricing info in their mailer (I got two of their mailings this weekend).

I went to their website http://www.acceptpay.com/pricing.html and I found the pricing. It's a traditional mode which does not match the Paypal system for simplicity.  I would think that Paypal would start driving the others down to their pricing level soon.  Or out of business. I wonder what moved Amex to start something (is this new?) and to not go with the simple pricing of PayPal?

Paypal, I'm hoping, will bring some rationality and value to the merchant account business. Right now, it seems like the vendors just run amuck promising all sorts of things and then not delivering.

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American Express Merchant Rate 2.89% + $0.15 per transaction2 Merchant Rate For Other Major Payment Cards1 Starting at 2.29%3 Processing Fee For All Payment Cards $0.29 per transaction4 eCheck (ACH) Check Rate $0.55 per transaction
	1. PaySimple, a registered ISO/MSP in association with First National Bank of Omaha, Omaha, NE is offering and shall provide all AcceptPay enrollment and payment services. American Express is not providing or acting as an Agent for the solicitation of any product for or on behalf of First National Bank of Omaha.  2. Alternate merchant rates may apply based on industry and charge volume. American Express reserves the right to make adjustments to our merchant rate tables and other pricing policies and will notify you of pricing changes in advance. Other fees may apply.  3. For non-American Express payment cards, the merchant rate is determined by PaySimple. Minimum base rate of 2.29% applies to qualified MOTO rate transactions. Alternate merchant rates may apply based on card and transaction type. PaySimple reserves the right to modify its rates and pricing policies and will notify you of changes in advance. Other fees may apply. If you choose to link your pre-existing merchant account to AcceptPay, you will be subject to additional fees of $10 per month + $0.15 per transaction.  4. Processing fee is charged by PaySimple for all American Express, Visa, MasterCard and Discover transactions.

Merchant Account Fees Higher than Paypal

I run a series of websites so I'm now in a position to compare the use of Paypal as a merchant account credit card vendor with a commercial old style online one that I use.  Here's the deal.

PayPal charges a fixed 2.5% cost for processing credit cards.
My bank along with the fees from visa, mastercharge, and amex for credit card processing total 3.8%.

This is a pretty significant finding. I'm wondering, since I process in the millions, whether I should switch entirely to PayPal.  The 1.3% difference is $13K per million per year.  On a five million dollar business, thats $65K per year.  That's a lot.

New forms of payment...cellphones for parking !

I was in DC the last few weeks and I was amazed to see a number of parking meters which said that you could pay by cell phone!

I think this is incredible and an insight into the future.  It is often said that the future is here with us now, it just hasn't yet taken its place center stage.  It's lurking in the corners, incubating for its big moment.

So will cell phones become a standard way of making payments? It certainly makes sense to me.  And this isn't an isolated example of how you can use your cellphone.  I've heard solicitations before to make donations via your cell phone so the system must be in place for payments via cell phone.  Maybe this is about to sweep in and become widely popular.
Of course, it might not take off.  For instance, in the past, there use to be a 1 900 business where vendors would get paid based on how long the user was online.  I'm not sure why that was never developed  further so you could just call up and key in a number (and a password) to charge it to your home phone number.
So, anybody know if cell phones are about to take off in the realm of payment? What do you think?  And would it affect online businesses like ours?

The Future of Credit Card Payments

In the past five years, there have been many innovations in the merchant account industry. As the world becomes increasingly connected through wireless networks, these networks are proving vital to the development of several industries. A few industries that are directly benefiting from the development of the wireless grid are obviously mobile phones and credit card processing. There are also companies making the transition from retail to wireless and ecommerce. At the opposite end, a company that has traditionally been an online credit card payment provider is moving into the brick and mortar sector. You might have heard of them: PayPal.

What if I was to tell you that mobile phone and merchant account providers are teaming up to allow you to accept payments on your iphone? What if I told that this is already happening? You shouldn’t be surprised, because it has been a long time coming for this service to be available. The next development that the founder from Twitter, Jack Dorsey, is working on is a system where you can touch two phones together, resulting in a credit card transaction. This will certainly speed up the amount of time spent on transactions and create a better shopping experience.

As the internet grows, companies have to adapt to the innovation by providing what their customers expect. For example, North American Bancard, which traditionally provided  credit card processing for brick and mortar businesses, has been accommodating more and more e-commerce businesses every year. It will be interesting to see how much business shifts to the internet in the coming decades. Paypal has teamed up with MasterCard to develop a credit card that can be used online and off. I believe this is Paypal’s first move toward the brick and mortar market. Keep your eye out on how this plays out.

As you can see, there are exciting times ahead for the merchant account services industry. My prediction is that they will be able to scan eyes for credit card transactions by the year 2030. What is your prediction for the future?

Three sites, three experiences with online payment processing

I have three sites that accept money.


The large one, has its own merchant account: the cash flow is monthly recurring billing. We also accept Paypal but only under certain conditions.

Site number two only accepts PayPal. That seems to work fine. It's single payments for $100.
Site three has a Paypal merchant account. It also works fine and the costs seem lower than on my other merchant account. It is primarily $25 and $50 payments.
I'm trending towards doing it all on Paypal.  The big problem with them is the reporting is so poor so far. I assume that they'll get better at it.

Accepting Credit Cards Online - Fees & Hassles, Three Analyses

I run a small online dot com consumer online services company that has three major sections that accept credit cards. By small I mean that we have around twenty staff and revenues under five million. Most of that comes from one subscription business.

For each of the three major business areas, I'm going to review this month my credit card arrangements. This blog will allow me to record my thoughts, to structure them, and perhaps to get useful feedback.  Maybe other similar businesses might send me their info so we can share and compare.  My email is creditcardsonline101 and it's a Gmail account (yes, the idea is that stating it like that the spammers will not harvest my email address. I gather that they have learned how to skip the spaces and to interpret the "at" and "com" so that "name @ domain.com" and "name at domain dot com" no longer provide much protection.

I am intending, btw, to revitalize this blog as a general business issues blog for small dot com businesses where we can discuss issues for benefits, high level marketing (no, this won't become an SEO or online marketing blog), staff, operations, in and out sourcing etc etc. Feel free to subscribe and join in. I'm hoping to have a small group of people to chat with.

The metrics and info that I'm going to look at for each business for its credit card.
1. Revenue 2009 and the nature of the revenue (recurring or not, size of average transaction)
2. Total credit card processing expense. Merchant account fees, processing fees, credit card fees etc.
3. Marketing & UI issues.
 - How good a UI and API for building sales funnels.
 - How good a UI for my staff for management
 - How good a API for all the complex functions - declines, recurring, change credit cards, pull reports automatically, refunds
4. Stability, reliability
5 Support
6 Nature of our vendor - ISO,  size, merchant account, PCI compliance, software, gateway etc. I need a better summary of these issues so I'll research this a bit more before I start.

The three businesses:
- One has revenues into the seven figures (that's over a million) and is based on recurring revenue with the average transaction being in the low twenty dollars range. We use a classic small credit card processor hooked into

Credit Cards Notice

Although this blog is focused on my issues and research as a small business owner accepting credit cards online, I'm also a big user of credit cards. As much as possible, I try to run as many expenses as possible from my 15 person company through my American Express Gold card. Frankly, my wife LOVES the miles which gives my life a very pleasant feel.  At one point, the major software that I license, that I pay tens of thousands of dollars for every month, was run through my credit card. That was great.

This post is to point out how messed up the credit card industry is.  It's ridiculous that there isn't a simple summary of Terms and Conditions associated with every credit card. A truth in labelling if you were. If the industry doesn't do it, the government should.  I started thinking about this when I opened this morning's mail and found:

Important notice about prime rate. As a result of new federal credit card regulations, we are simplifying the way that the Prime Rate is dermined for a variable interest rates. Accordingly, effective April 8, 2010, the secon and third sentences of the subsection about the Prime Rate in you Cardmemember Agreement are deleted and replaced with: "The Prime Rate for each billing period is the Price Rate published in The Wall Street Journal 2 days before the Closing Date of the billing period. The Wall Street Journal may not publish the Prime Rate on that day. If it does, we will use the Prime Rate from the previous day it was published."

Am I the only one who wants to fix those last two sentences into:

If the Wall Street Journal may not publish the Prime Rate on that day, we will use the Prime Rate from the previous day it was published."

A trivial point but still, given the millions of people receiving this notice and the number of lawyers and marketers that saw it, shouldn't they write clearly? It feels like I put more effort into this blog (which nobody reads) than they do into their text.