Best payment processor for $100,000+ a month

Hi everyone,

Let me first outline our current situation. We're selling very popular IM software products, most of them come with a yearly subscription. We made over $100,000 in sales last month alone. On average, we make approx. $50,000 in sales per month and the numbers are growing steadily.

So far we've been using PayPal to process these payments, however a "PayPal horror story" happened to us 5 weeks ago.

Even though our refund rate has been 1.5% ever since we opened our PayPal account 14 months ago, PayPal has imposed a $50,000 fixed reserve and a 30% rolling reserve on our account. Currently they are holding $70,250 of our money (68% of our current balance) and they WON'T release it even though our refund rate is 1.5%.

They know we cannot close our account and claim these reserved funds because we have thousands of active subscriptions tied to our account, and these are very valuable for future business. They are basically abusing their power and holding our money without any explanation and without even paying any interest on it.

Bottom line, we need a new payment processor.

If this payment processor comes with an integrated affiliate program that takes care of everything for us and brings in an active network of affiliates, that's even better.

What option would you recommend? ClickBank? JVZoo? Click2Sell? PayDotCom? Commission Junction? ShareASale? Anything else?

How do these compare in terms of:
- transaction fees
- affiliate program handling
- rolling reserves
- fixed reserves
- signup fees and other costs
- payout (withdrawal) methods for our EU-based company
- other upsides and downsides
- potential horror stories

For instance, I've heard ClickBank usually means higher-than-average refund rates because of their 1-click refund system. People are also supposedly buying products through their own affiliate links on ClickBank, etc. It might still be the best option, though - that's why I need your opinion and your experience with these payment processors.

I would sincerely appreciate all your help and suggestions.

Thank you very much in advance,

Aaron

Try CDGCommerce, tell them bluearctic sent you. Otherwise paypal pro is not bad for high monthly transactions.

How many chargebacks are you getting hit with? Probably north of 2% of your "refund rate" is 1.5%. That may be what's causing your problems.

I have a company doing $300-$500k/mo in revenues all through merchant accounts. Hit me up if you want some names.

jesus thats a huge reserve. Good on you for leaving those dirt bags.

How are you going to retain your subscribers, though? I assume quite a few wont resubscribe after the migration

Use your local bank and get a merchant account. If they don't have a full solution for processing online orders you can tie it to authorize.net.

Yeah never do big business with paypal. Just migrate away from them. Do keep your account going so you can get the subscriptions. Chances are if you are doing annual subscriptions many will have updated their paypal account for cc expiration where if you have the cc in your database you will have a large volume expiring annually. You will need to have a method of updating this.

teeniegenie said:

How many chargebacks are you getting hit with? Probably north of 2% of your "refund rate" is 1.5%. That may be what's causing your problems.

I have a company doing $300-$500k/mo in revenues all through merchant accounts. Hit me up if you want some names.

Click to expand...

I included both requested refunds and chargebacks into the 1.5% figure. I'd certainly love to hear more about the merchant accounts you're using, and your experience in this field in general. (Can't send you a PM, though, I just created my personal Black Hat World account.)

phatzilla said:

jesus thats a huge reserve. Good on you for leaving those dirt bags.

How are you going to retain your subscribers, though? I assume quite a few wont resubscribe after the migration

Click to expand...

I figured we'd just have to keep the existing subscribers tied to our PayPal account. All new signups and all expired subscriptions will be processed by our new payment processor, though - we just need to pick one.

Is there a reason no one recommended one of those I mentioned, e.g. ClickBank? Some of these come with their own network of affiliates, which might be a big plus for our business right off the bat. Any thoughts on this?

Thank you in advance,

Aaron

70000 bucks ! Paypal has a load of horror stories. I think I can help you but I have to ask my friend.

Alternative merchant processing

Why not use a payment processor such as: payproglobal.com , plimus.com or avangate.com ?

They are all really great solutions, especially when you are selling software, as it makes it all automated. That means once a user has paid and the payment has been confirmed, he automatically gets the software sent to his email. What's also great about them is that they have a great fraud protection.

The only disadvantage: Some of them only pay-out bi-weekly, or even monthly. And they even charge a 5% fee. And there is VAT added to buyers from the EU (which is needed by the law).

But I'm pretty sure you can lower the waiting time to pay-out, since you are making so much money.

If everything else fails, try only receiving bank wires. But that's a lot of hassle actually.

whats you're website? and what software are you selling?

if you have charge backs above 1% eventually paypal will cancel. Also you may beed to put up a reserve. Alternativemerchantprocessing. can help

Is this really possible?

the best option would be an agregator, not a Direct MID.

Try with: plimus.com. click2sell.eu , g2s.com , 2checkout.com , asknet , cleverbridge , kagi.com etc...

if you are still looking for a processor I can have you setup quickly and with out much of a hassle. I have a good set of contacts in north States, Canada and a few in Europe as well.

I have can provide a wide range of platform support as well to allow full integration within e-commerce solutions.

if you're interested let me know.

@compil003 can you name a few of the payment processors here or could pm me some..

senior said:

Use your local bank and get a merchant account. If they don't have a full solution for processing online orders you can tie it to authorize.net.

Yeah never do big business with paypal. Just migrate away from them. Do keep your account going so you can get the subscriptions. Chances are if you are doing annual subscriptions many will have updated their paypal account for cc expiration where if you have the cc in your database you will have a large volume expiring annually. You will need to have a method of updating this.

Click to expand...

Exactly. With a volume like this and a low refund/chargeback rate there is no sane reason to use a third party processor. Merchant accounts offer MUCH better fees and terms in general. And PayPal, obviously, is the worst solution of all.

Aaron Sustar said:

I'd certainly love to hear more about the merchant accounts you're using, and your experience in this field in general. (Can't send you a PM, though, I just created my personal Black Hat World account.)

Click to expand...

You need to speak with the bank that you're with. It will not be much help for you if others recommend the banks they have their merchant accounts with as odds are that these banks a) aren't in your jurisdiction; b) don't know you. Most high street banks offer merc accounts so just drop yours an e-mail and ask them about it. It helps to have some history with the bank as well.

Aaron Sustar said:

Is there a reason no one recommended one of those I mentioned, e.g. ClickBank? Some of these come with their own network of affiliates, which might be a big plus for our business right off the bat. Any thoughts on this?

Click to expand...

The main reason why no-one would recommend Clickbank for this sort of volume is that their fee structure is terrible (7.5% + $1) and they also have a 1-click no-questions-asked refund policy which often hurts your bottom line quite a bit. Clickbank do have a network of affiliates, though, but it's up to you to figure out if your product is the kind that would benefit more from access to these affiliates than you'd lose out on paying CB's horrendous fees.

Also bear in mind that affiliates won't just magically appear, even if you are listed on ClickBank. You STILL need to work hard to get the initial bunch of affiliates promoting your product as it will only be found "organically" on the ClickBank Marketplace once it's already got traction.

I don't know what's the best payment processor but please be carefull with Paypal. That guys can be a great pain in the a**! Sad but true

I recommend getting a official CC merchant account for the best processing rates. But if you don't mind high rates, I highly recommend 2checkout-- they have way better support than PayPal and fewer horror stories.

As previously stated you need to go with a merchant account with your local bank. Using a 3rd party payment processor is like having sex with a Thai prostitute with warts around her lips.

ask your bank for a merchant account most of them have its better for that