Best payment processor for $100,000+ a month

24 replies
Hey Warriors,

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 PayPal 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
#$100 #month #payment #processor
  • Profile picture of the author Dan C. Rinnert
    Why aren't you using a merchant account? Build your own affiliate system if need be.
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  • Profile picture of the author mosthost
    With this volume of sales you should have stepped up to a merchant account already.
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  • Profile picture of the author KirkMcD
    What option would you recommend? ClickBank? JVZoo? Click2Sell? PayDotCom? Commission Junction? ShareASale? Anything else?
    Most of these are just affiliate programs. They don't process your payments.
    Talk to your bank and get your own merchant account.
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  • Profile picture of the author Kal Sallam
    I would also suggest a merchant account.
    You can also look into: 2chechout & Plimus.
    They accept Paypal while It's not mandatory
    for the seller to have a Paypal to receive payments.
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  • Profile picture of the author Michael Oksa
    Yep. A merchant account.

    Also, have you talked to a qualified lawyer about your situation?

    All the best,
    Michael
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  • Profile picture of the author micromike
    that kinda volume? talk to authorize.net, for sure
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  • Profile picture of the author Lorraine Parker
    The best option to Paypal is Clickbank. You can also try 2checkout.
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  • Profile picture of the author hvalentino
    if you want to do JV with me I have 100k a month Merchant account that you can use let me know ok
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  • Profile picture of the author Trev81
    Speak to a lawyer on that. Mostw definitely.
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  • Profile picture of the author DaveW82
    No idea why people are trolling your thread with 2checkout stories. If you're doing 100k/month I would speak with your bank -- they will either partner with a merchant processor or own their own.

    The thing that you need to know is you need to lay out facts to them in the beginning. They will probably want $xx,xxx amount of money to hold as a security deposit until you build a relationship with them. This is the reality of processing credit cards online. It takes time to establish credibility with the payment processor.

    Good luck with your venture.
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  • Profile picture of the author Converting
    DaveW82 said it best here. This is good monthly sales revenue. Definitely need a merch act for this one.
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  • Profile picture of the author Guru4u
    You talked about your refund rate but what is your chargeback rate?
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  • Profile picture of the author dsiomtw
    Problem is that, just like Google, PayPal pretty much doesn't like anything that has to do with "make money online" stuff. Definitely get a merchant account and slowly transition over. If you have no relationship with your bank, don't have verifiable accounting, good credit, etc. you might also want to think about partnering with someone or some company that can help you process some of the transactions until you build up your merchant relationship in order to do that level of sales with decent terms.
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  • Profile picture of the author polomasta
    Take a look at Braintree. They have a really good reputation and have committed to data portability for merchants (ie, they make it easy for you to switch to them or move away should you chose).

    I also highly recommend Stripe. Fee structure similar to paypal but MUCH MUCH more friendly and super easy for developers to integrate payment processing into your existing system. Also, I bet you could negotiate better rates with them given your volume.

    Hope this helps!!
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    • Profile picture of the author iAmNameLess
      Originally Posted by Dan C. Rinnert View Post

      Why aren't you using a merchant account? Build your own affiliate system if need be.
      Originally Posted by mosthost View Post

      With this volume of sales you should have stepped up to a merchant account already.
      Originally Posted by KirkMcD View Post

      Most of these are just affiliate programs. They don't process your payments.
      Talk to your bank and get your own merchant account.
      Clickbank can process payments, and probably the best option out of those.

      Originally Posted by Deji View Post

      As others have said, get a merchant account. A good one is Payment Gateway to Accept Online Payments - Authorize.Net
      Originally Posted by micromike View Post

      that kinda volume? talk to authorize.net, for sure
      Originally Posted by Lorraine Parker View Post

      The best option to Paypal is Clickbank. You can also try 2checkout.

      First off, I'm surprised at some of the advice given because obviously a lot of you guys aren't familiar with how merchant accounts work.

      1.5% refund rate is not acceptable with any authorize.net reseller or any wells fargo, BOA, first data ISO.

      What he will need is a high risk merchant account which will be higher in fees than paypal. Some qualified cards you'll be at 2.9% which isn't bad, but mid and unqualified rates will be 5-7% and a chunk taken out at the end of the month, or beginning depending on which you go through.

      It's VERY difficult to get a merchant account immediately with a ceiling that high. I had money held by paypal, and then I had another merchant account hold 42K, because of volume issues. Merchant accounts CAN hold your money for 6-12 months. They WILL if you have even a 1-3% chargeback rate or refund rate.

      This is high volume, and most people on here don't make that in a year, let alone a month.

      My recommendation would be clickbank for this... you get paid by check, and it makes things easier. I would set up and start building a relationship with a decent bank that offers merchant services. Most won't let you start with higher than 10K/mo ceiling, but you can always request the risk department to review a request for an increase. The last merchant account I had started at 5K/mo until I grew the ceiling to 60K which was the cutoff for my credit. It took me about 4 months.
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  • Profile picture of the author IMChick
    1. Merchant account

    2. Attorney
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  • Profile picture of the author wordpressmania
    As you have a very high volume transection you can try Plimus, as they offer custom commission for high transaction....

    Hope this helps
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  • Profile picture of the author Walter Parrish
    Originally Posted by Aaron Sustar View Post

    Hey Warriors,

    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 PayPal 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
    Always, always, work towards getting rid of the middle man.
    Check out someone who can handle Authorize.net or handle it in house if you can manage. If your business keeps growing you should be able to do that with Authorize.net.

    As far as an affiliate program you can afford to do this on your own as well.

    For others reading always always always work towards getting rid of the middle men.
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  • Profile picture of the author Black Hat Cat
    Banned
    Check out Regnow/Digital River. They have software vendors there doing $50,000 a day.
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  • Profile picture of the author Vtoy
    Banned
    Infusion Soft.
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