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Best/Safest Payment Processor for selling Services

by BobK
11 replies
Greetings,

I have several accounts with PayPal and I've used 2CO in the past.

I sell services thru one of my PayPal accounts and I'm not having any trouble but it's a bit risky at times. It gets you a little worried knowing there is absolutely No "Seller Protection" thru PayPal when selling services. I see these orders from non-verified accounts and no addresses.

The problem with 2CO is their high chargeback fees, and I don't think they offer protection on services either.

I'm selling a good service and it's not like I'm cheating anyone, but knowing any buyer can just say I want my money back thru PayPal and get it makes me crazy knowing the money I put out to one of my suppliers could wind up being a loss.

Does anyone know of a good payment processor that offers some type of protection when selling a service?

Thanks ahead of time,
Bob
#best or safest #payment #processor #selling #services
  • Profile picture of the author allianceprocessing
    Hey Bob,

    What kind of sale is it - a straight sale or trial offer? And what are you looking for in regards to 'protection?' Are you just trying to minimize your risk from charge backs or more worried about losing product due to insufficient funds with shady consumers?
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  • Profile picture of the author Josh Anderson
    Hi Bob,

    The answer is to get a merchant account and gateway.

    There are tons of threads discussing this very subject here in the WF. Here is just one of them with some good info including several posts from myself offering insight:

    http://www.warriorforum.com/main-int...vs-paypal.html
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  • Profile picture of the author Long Beach Nathan
    The problem is that people are still so addicted to Paypal that you might not really have any options. Dwolla seems to be a good alternative, but I'm not sure if they offer any type of seller protection or not.

    The other problem with using them is that most people aren't familiar with Dwolla yet.
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    • Profile picture of the author Josh Anderson
      Originally Posted by Long Beach Nathan View Post

      The problem is that people are still so addicted to Paypal that you might not really have any options. Dwolla seems to be a good alternative, but I'm not sure if they offer any type of seller protection or not.

      The other problem with using them is that most people aren't familiar with Dwolla yet.
      They are still figuring themselves out... they started claiming seller protection when they launched but later found that they could not prevent reversals so had to change their policy.

      The reality is that there is NOTHING you can do to stop a charge back from happening. But merchant accounts allow you to dispute chargebacks and you CAN win in certain cases if the chargeback is not legit.

      When it comes to 2checkout you have NO recourse because 2checkout no longer handles disputes or refunds internally despite being a "reseller" and not even a "third party processor" which seems strange to me.

      This means that if there is a chargeback it was lodged against 2checkout by the cardholder and 2checkout will NOT defend you against chargebacks so the only recourse is that you loose and they charge you the fees.

      For example I subscribed to a service from a company that was using 2checkout. Suddenly that company became a ghost town... their service no longer worked properly, they had not responded to a support request in 2 years, and it appeared as if those running the service had simply died or vanished. I had requested cancellation and it went unanswered and they continued to bill me so I called 2checkout and asked them to process a refund and cancel the service...

      2checkout told me that I had to contact the seller to get a refund... I explained that the seller had vanished and had not answered any customer service questions in two years and had ignored both cancellation and refund requests...

      2checkout said that there was nothing they could do...

      I told the 2checkout rep that it would be better if they could just do the refund because otherwise I had to go through my bank and do a chargeback and that I knew that they were the company I was actually doing business with since they were a reseller.

      The 2checkout rep told me I had to do a charegeback to get the refund.

      I was shocked at this since 2checkout is a "reseller" and is the actual company I was paying and has full control over refunds. Also in years past it was their policy to process the refunds...

      Now they were telling me to file a charegback. This just did not make any sense.

      But that is the way that 2checkout works... and that is why you are screwed when it comes to any chareback legit or not when using 2checkout.
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  • Profile picture of the author Greedy
    Bank of America + Authorize.Net + PremiumWebCart/1ShoppingCart/what you prefer.

    Is a good route.
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    • Profile picture of the author BobK
      Hi allianceprocessing,

      Straight sale of SEO Services, some which require 8 days to complete while others require 45 days - and then theres monthly subscriptions.

      I've had no chargebacks, but the site is still young. I hate to call them what they are but yes, shady consumers. I do supply proof/report that work was done!

      Josh, I'm going to check your thread but I didn't think a company such as Authorize.net had protection against services either.

      Nathan, I see a lot of service oriented businesses using PayPal even right here in the Forum. They are easy to use and have low fees, I personally don't think it's addiction.

      Thanks for the info again Josh.

      Greedy, You like 3 of them, I'll need to check out 1Shopping Cart but my site is Drupal 7 - don't know if it's doable..

      Thanks people,
      Bob
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      • Profile picture of the author Tina Golden
        You've got it backwards with PayPal and services. If you provide services, the buyer has no recourse or standing in a dispute. Once you say it is a service, case closed.

        Buyers can still file a chargeback with their credit card company, but they can do that with any payment method where a credit card can be used.
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        • Profile picture of the author CollegeCEO
          Originally Posted by Tina Golden View Post

          You've got it backwards with PayPal and services. If you provide services, the buyer has no recourse or standing in a dispute. Once you say it is a service, case closed.

          Buyers can still file a chargeback with their credit card company, but they can do that with any payment method where a credit card can be used.
          This is spot on. The only time PayPal will really give the buyer any type of recourse is when the transaction was through eBay. Otherwise PayPal heavily favors sellers when any type of dispute occurs. And like Tina said, the buyer can file a charge back with their cc company to get their money back but it won't affect your PayPal account.

          I was scammed buying a digital product through a site other than eBay with PayPal and filed a claim. PayPal ruled in my favor but didn't give me any money back. I had to go through my credit card company.
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      • Profile picture of the author Josh Anderson
        Originally Posted by BobK View Post

        Josh, I'm going to check your thread but I didn't think a company such as Authorize.net had protection against services either.
        Authorize.net is a payment gateway. They have nothing to do with the chargeback process. Its the card provider and banks that the customer uses that originates the chargeback and its your actual merchant account provider that processes the reversal once the bank sends them a dispute.

        There is NO protection against chargebacks. It is the right of the customer to challenge the charge no matter what. They can make whatever claim they want false or otherwise. There is no rule and no processor that can stop them. You can only dispute them.

        There is only "prevention" and "dispute" and you only have that option IF you process your payments through a merchant account and IF you can supply the correct documentation for a transaction to prove that it was not fraudulent or that the dispute is false.

        Sure, PayPal has its own internal dispute resolution process... but that only protects you if the customer submits a dispute through PayPal. If they file a chargeback you are screwed because PayPal is a third party processor and they have to dispute the chargeback on your behalf.

        If you use 2checkout you are even more screwed because of the policies I already outlined.

        If you truly want to reduce your risk and have the potential to win a few chargeback disputes (yes you can win them) you have to process through a merchant account.

        I have won chargeback disputes lately for my services. But you must be able to provide the proof... which in the case of any third party payment processor you do not have access to which is why merchant processing is necessary.
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  • Profile picture of the author Velant
    paypal merchant account will do just fine for this.
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  • Profile picture of the author planbpayments
    Paypal is an eWallet and does not support any High Risk business type.
    If you are running an online business that is prone to chargeback, i would suggest a merchant account with a reputed acquiring bank, and a good gateway like Authorize, firstdata or trust commerce.
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