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Question about merchant accounts and agents providing them?

Discussion in 'Payment Processing' started by tdd1984, May 2, 2012.

  1. #1
    I am just curious we got our merchant accounts through an agent. What control does that agent have over us as a merchant. They do not have the power to like shut us down or disable them do they. I was told they do not because we are a merchant of the bank. And that the only thing they could do is disable our gateway. The reason I ask is because I plan on developing a partnership with someone that supplied our merchant accounts. I highly doubt anything would go wrong. As this guy is an extremely reasonable and easy guy to get along with. But I just wanted to make sure because he is the one that supplied us with our merchant accounts. You know just encase he did get upset over something. Wouldn't want him trying to like shut our merchant accounts down. From my understandings they cannot do this and we are free to switch our gateways to another provider at any given time?
     
    tdd1984, May 2, 2012 IP
  2. paymentagent

    paymentagent Peon

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    #2
    Well , I doubt that agent can control your merchants accounts , in most cases IPSP or bank acquirer taking actions relative to merchant :)
     
    paymentagent, May 3, 2012 IP
  3. tdd1984

    tdd1984 Well-Known Member

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    #3
    Hey I am going to e-mail you. You might have a solution for us. I just send you an e-mail.
     
    tdd1984, May 3, 2012 IP
  4. ketset

    ketset Peon

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    #4
    I have used Merchant services through Merchant review companies - merchant-account-review being one of them. They have found the best price for me and actually saved me money.
     
    ketset, May 3, 2012 IP
  5. johny8484

    johny8484 Peon

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    #5
    I used an agent before, owner of ccnetpay, and I can assure you the agent, as such, doesn't have any control over your actual merchant account, especially when it comes to termination. He arranged us with couple of merchant accounts for our business with one of the German banks, these are direct merchant accounts and we have a direct contract with the bank so the agent cannot have any influence here.

    If your agent also provides you his gateway then in theory he has the power to "stop" your transactions to go through to your merchant account with the acquiring bank, but I don't know why would someone "disable" your gateway account if they're making money on every transaction :) You can always go to another gateway provider.

    However if your agent is actually an iPSP and you have an account with him and not directly with the bank, then he can close you down yes.
     
    johny8484, May 4, 2012 IP
  6. tdd1984

    tdd1984 Well-Known Member

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    #6
    Do you know anyone that can provide us with good offshore or domestic solutions?
     
    tdd1984, May 4, 2012 IP
  7. jestep

    jestep Prominent Member Premium Member

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    #7
    Are you trying to get an account for the website in your signature or is this for something else?
     
    jestep, May 7, 2012 IP
  8. tdd1984

    tdd1984 Well-Known Member

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    #8
    Seems you are more interested in trying to get us to fill out a merchant application vs answering the question, too funny.

    To answer your question, it's for our trial offers. We have processing, but looking for other banks to build relationships with.
     
    tdd1984, May 7, 2012 IP
  9. jestep

    jestep Prominent Member Premium Member

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    #9
    I've been a member here for almost 8 years, and I haven't been posting here for self promotion now or ever. We don't deal in high risk which by your other posts I was assuming this had some reference to. I have some contacts that I was going to suggest if it was the type of product/service they accept. Not all offshore or domestic providers accept the same types of services. Some have volume restrictions. Some have major reserves or fund hold times. Some verify transactions with every customer for extremely high risk services. I didn't know exactly what website you were asking about, and I have no intention of wasting anyone's time if it's something prohibited or something they wouldn't be interested in.

    To answer your original question, your contract is with the processor/ISO and acquiring bank. The acquiring bank generally owns the contract and the processor takes the risk and services the account. Your application should have both parties on it, typically the processor and then a bank such as Wells Fargo, Merrick, HSBC, etc. Your agent likely has no ownership or control over the contract itself.

    However, this doesn't necessarily mean the agent has no control or influence over anything. If they have a good relationship with the processor, don't assume they couldn't convince the processor to shut your account down. If they have control over the gateway they can likely shut that down as well. I can't see why they would want to do that though since they make money when you process. Assuming your chargeback rate or perceived risk isn't too high, neither the agent nor the processor or acquirer would want to shut your account down. Digressing a little, this next leads to card associations Visa/MC. If you get too many chargebacks or even returns, you can be put on chargeback monitoring programs with the associations which will trump any agreement you have with the processor. Associations have several programs that are based around excessive chargebacks and other programs if most of a merchant's chargebacks are fraud codes. Mastercard's MCC program is the most restrictive and it requires 50 chargebacks and a .5% chargeback rate in a calendar month. Generally getting put on any of these will get your account shut down in a hurry unless your processor is specifically geared towards dealing with these types of accounts. Not sure if this applies but something to keep in mind if you do have a lot of chargebacks or returns.
     
    jestep, May 7, 2012 IP
  10. tdd1984

    tdd1984 Well-Known Member

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    #10
    Yea I understand all that and thanks for the advice. I know Visa and Mastercard do have different threshold. And we are no where close to 50 chargebacks with MC or 100 with Visa per month. As to answer your question we are promoting trial offers (diet offers). We are very liberal on returns / refunds as well. Our processor said we was doing a great job and have no problem raising our monthly MID limit. We are just wanting to make sure we build out relationships with other banks as well. As you are probably already aware this industry changes so fast when it comes to these trial offers.
     
    tdd1984, May 7, 2012 IP
  11. johnjohn24

    johnjohn24 Peon

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    #11

    Jestep, you seem very knowledgeable in the processing field. I value your opinion, and I have a question:

    Does this "chargeback monitoring program" applies if you work with offshore processors/acquiring banks ?
     
    johnjohn24, Jun 23, 2012 IP