The Green Sheet recently received the following letter and thought our readers would be interested:
Paul,
Received this e-mail. Have you seen this deal yet? What are they trying to get away with?
Chris
Process Credit Cards without a Merchant Account!
There is one alternative to getting a merchant account.
"There is a third party company that will process your credit cards under a vendor relationship (to get around factoring) for a flat fee of 8%. There are no monthly fees or equipment fees. You get paid twice a month. Their integrated E-commerce package, which includes centrally managed shopping cart software and credit card transaction processing services, is designed to help you sell merchandise directly from your Internet Web site. The user-friendly interface will get you started quickly, and with a minimal investment of time and money.
As their client, you designate the processor as an online retailer of your products. Then, your Web site designer simply links your site to the shopping cart screens on their secure server. This allows customers to purchase items on your Web site using any major credit card.
You don't need to spend the time and money to set up your own retail business, merchant accounts, and customer service staff. In fact, you don't even need to install any software or hardware.
Customers will appreciate this service too. They'll never pay sales tax on any orders because the processing company is based in Delaware. And, if there is ever a billing inquiry or card payment question, they can call a 24-hour, toll-free customer service number.
You can use this service to sell a wide variety of merchandise. Please keep in mind the following guidelines and restrictions, however:
1. You must sell tangible merchandise only. In other words, physical products that you will ship to customers.
2. Your products must be legal to sell in all states, provinces, and countries where you accept customers.
3. The minimum pricing for each product is $5.00.
4. Your monthly volume is limited to $1,000. Any amount over that will be held for up to 80 days as a protection against chargebacks.
5. You may sell adult videotapes or CDs or products using this service.
This service also includes the ability for customers to pay by check over a secure server. You simply download your checks from the server and print them out on your computer. No special toner is needed. The total setup fee for this service is $295.00. There are no monthly fees, and personal credit is not an issue. This service is not directly provided by Point of Sale Systems. It is only presented as an alternative to those who need the ability to take credit cards without applying for their own merchant account.
For those of you concerned with the validity of this type of setup, we have verified that their merchant account through First Bank of Beverly Hills is properly set up to handle these types of transactions, and is not a factoring operation."
Chris:
Thanks for the data. I have published one story on this and you probably will read more about this concept in future issues. Also check out the November 1998 issue of our GSQ magazine.
Good Selling!
Paul H. Green
Editor-in-Chief
