#1 (permalink)

I've heard of some truly horrendous stories with Credit Card gateways, and I did as much research as I could, but unfortunately, I went with a friends advice and chose a gateway that had some truly terrible stories told about it.

First problem. When I applied for the gateway, they typically ask you how much your monthly income and price per sale are going to be. Since my online site was very new, I suspected that I wouldn't be doing that much business in my first year, so I stayed conservative. That was my big mistake number one. I asked again and again what the situation would be if I sold more than what I applied for on a given sale or on a given month, and she swore up and down that the company would be more than happy to work with me on the problem. On my first order that went over my specified sale amount, they held back the funds from that order and every subsequent order until the end of the month. Of course they said that RISK management had determined that since the amount was above what they approved, they had to wait hold back the funds.

Problem number two. Because they held back my orders, I had to pay out of pocket my manufacturer for the products they where shipping. When I ran out of out of pocket, they had to stop shipping, because I was over my credit limit. When I went to the gateway to release some of my funds,I told them it's not my fault that success came this early, can we re-negotiate my limit? HELL NO.

Ok, watch this visious cycle.:drool:

My orders where shipping out late because the gateway held back funds that where neccesary to pay my manufacturer, the orders where shipping late, and the customers started cancelling. One customer did a chargeback on their credit card, even though we explained the delay, and the gateway held back the NEXT MONTHS funds. You see where I'm getting with this?

Now more funds where being held, and the initial funds where re-held for TRACKING NUMBERS. They said I violated VISA/ MC's policy for delayed orders, which when I had an attorney look it up, I didn't. Full disclosure on my site for delayed orders, which VISA/MC allow for in there merchant rules and policies.

OK. I convince my manufacturer to ship out product, and the gateway starts releasing funds in dribs and drabs. I change my online processing from AUTHORIZE and CAPTURE, to just AUTHORIZE, where I can capture the funds when the product ships. After speaking with the gateway, they said they would allow this.

BIG MISTAKE NUMBER TWO, trusting a representative of the gateway. When I started shipping orders, they held these funds as well, because of the lateness of the orders, which they where responsible for. We are talking about 4 orders shipped a week late, out of 108 orders.

Now, at the end of my contract, which they are cancelling, they are telling me they can hold my last ALL MY REMAINING FUNDS for up to 6 months.

WTF!!!!

We are talking about over 60% of my revenue.

After some checking with my attorney, and doing some more background check online, I find out this gateway is a SUPERSTAR in the I'll take your money and not give it back to you genre.

Some whistle blowers said that they actively use these tactics to syphon money into an interest earning account, thus getting them more money on you dime.

I am seriously considering calling the FTC and BBB, however, their where so many complaints against this company, that they are not longer apart of the BBB.

I've heard that Authorize.net is a very merchant centric company, trying to protect merchant interests first.

In the meatime, THEY have my money, and I don't know what else to do about it.

I will not list the company here, but I do have two links full of complaints about this company. I'd like to share it with you all. I don't want to give this forum a liable problem so I'm not posting the name of this company, or links to complaints, but if a mod says it's ok, then I will.

What problems have you guys had with your payment gateways? Who is the best?:taz:

#2 (permalink)

I haven't had any problems with payment gateways myself, since I have only used small ones for small fees; nothing over a few thousand. However, this is a bad way for them to run their business.

Have you thought about taking them to court?

#3 (permalink)

I thought about it, but I'm a little guy, and they are very big. I don't know what would happen. Any suggestions?

#4 (permalink)

To be honest mate, I have no experience of law. Only 17, just small time. Wouldn't even know where to start.

Maybe somebody in the forum could help you out?

#5 (permalink)

That's what I'm hoping for.

#6 (permalink)

I'm sure somebody with a bit of knowledge will turn up.

Somebody with more knowledge than me anyway.

#7 (permalink)

I only have a second (toddler in lap), but I can echo a bit of your experience. Our business blew up right off the bat, they held funds forever (all on hold in THEIR account), and we had to prove each and every order past a certain amount (receipts and tracking numbers). This was all within 6 months of starting. We were doing awesome, but they were penalizing us for it.

We then switched with another processor (Bank of America) who was very much up front with what they wanted on hold ($100k - far less than what our old processor kept, and only a small fraction of annual sales), but they never ever held up a dime - even on nearly $1 million months. They are great.

During the whole process, we often pondered why they were trying SO hard to keep merchants down who were doing well so quickly. We were limited by them. But in reality, there are SO MANY scumbags out there, that they had to protect themselves.

If I were at the start, I would begin at www.merchant911.org. The site is full of tons of info and you can avoid any messes from the start!

(BTW, chargebacks are a whole other animal. You literally can't win as an online merchant. Card not present environments create a profitable situation for processors. They actually make money when 9 million card numbers are stolen because of chargeback fees from merchants and they automatically take any money they want from your account. Before you process a single transaction, make sure you are educated about that. It's an ugly thing, trust me.)

Laura