A merchant has an ecommerce store using Authorize.net as the gateway and Chase Paymentech for payment processing. What happens if the settlement times are both set up for the same time at 6 PM? How long before the merchants bank account is funded?

MERCHANT QUESTION: I noticed that the settlement times on Authorize.net and Chase are set to 6pm. Does that mean a batch going from authorize.net to chase will be delayed a day because of transit time? Should Chase be set to a later time?

ANSWER: No. The settlement time at Chase Paymentech was initially set up when the merchant was using the Orbital Gateway for it’s ecommerce store. However the merchant changed ecommerce software; there was an API written for Authorize.net, but not the Orbital Gateway, offered by Chase Paymentech, for the new software.

Authorize.net is now doing the batch, not Chase. The batch setting that counts is auth.net. Settlement is per schedule. The merchant is funded 48 hours, 6 days per week.

Below is an example daily email the merchant receives from authorize.net:
The following is your Credit Card settlement report for Tuesday, May 05,
2009. This merchant has funds deposited in 48 hours, or 07-May-2009 for the batch shown below.

Dear customer:
The following is your Credit Card settlement report for Tuesday, May 05,
2009.

Transaction Volume Statistics for Settlement Batch dated 05-May-2009
21:27:45:
Batch ID: 9———-6
Business Day: 05-May-2009
Net Batch Total: $———.80
Number of Charge Transactions: —55
Amount of Charge Transactions: $——–.80
Number of Refund Transactions: 0
Amount of Refund Transactions: 0.00

To view details for a specific transaction, please log into the Merchant
Interface.

1.Click “Reports” from the main menu
2.Select “Transaction Details by Settlement Date”
3.Select “Settled Transactions” from the Item Type drop-down box.
4.Select the Settlement Date for the batch you would like to view from
the “Date” drop-down box
5.Click “Run Report”
6.In the results, click on any transaction ID to view specific details
for that transaction.

If you have any questions regarding this settlement report, please
contact your bank or you can call Customer Support at 1-877-447-3938.

Thank You,
Authorize.Net

This is the information sent to a friend for a credit card processing account:
AUTHORIZE.NET VIRTUAL TERMINAL
No cost for set up
$5.00 a month
2.20 % per transaction
or
2.84 % per transaction if security info is missing
.20 per transaction
No Cancellation Fee
1 week to set up

What’s wrong with this offer?
Authorize.net does not provide payment processing. They are a gateway only.

Some Payment processors provide virtual terminals, including the ones I represent. For straight credit card processing (not recurring billing), the authorize.net solution would be an extra layer since you would pay for a gateway, and then for the processor. There is no exception- authorize.net does not and will not process credit cards.

RECOMMENDATION: Pass! Without examining rates, the representation is incomplete at best and I don’t recommend doing business with anyone who doesn’t provide full disclosure until after the fact. All the true details would come out later after the ‘initial paperwork’ is done.

Note: Authorize.net does have a virtual administration, but the processing is not done by them so the contract must be with a different party. I personally have access to the Authorize.net administration as both a reseller and as an account user. As a reseller, I can set up accounts on demand, and set the rates the merchant will pay, adding on some profit to my fixed costs if desired.

Recently I switched a Volusion hosted ecommerce store from credit card processing with Paypal Payments Pro to the Paymentech platform via my ISO. (3D Merchant is not an ISO, but your blog author is an agent with multiple payment processing solutions to choose from, including Paymentech.)

I chose Paypal years ago when the store first started. It was just a ‘buy now’ button. Then it became a full fledged store, and I upgraded from regular paypal to Paypal Payments Pro. With Volusion, I bought the Volusion branded security certificate and used in the integrated Paypal checkout. This means customers would pay with a credit card just like on any other web site. Shoppers normally never know who a company’s processor is. They just get a receipt from the business they bought from. I also kept the Paypal option. This means a customer could also check out with Paypal or with any credit card.

Paypal Summary:
Paypal regular- customers checkout on the paypal web site.
Paypal Payments Pro- checkout just like any other store with your credit card, all on one page.
In either case, merchant fees are deducted from every transaction. Additionally, you have to login to Paypal, then request to transfer deposits from transactions to your bank. The transfer time to my bank account was about 2-3 business days, sometimes longer.
My typical transaction cost was 2.95% (excludes factoring in the monthly fee). This is not the same as effective rate covered below.

Processing via my ISO/paymentech
Credit cards- customers use a one page checkout. I’m using authorize.net as a gateway. I can login to authorize.net or Paymentech to view transaction information. The transfer time to my bank account with Paymentech is 2 days FIRM, add 1 day if Sunday is in the 2. Merchant fees are deducted once per month, which makes it much easier for reconcilation.
I’m paying pass through interchange now instead of being lumped into one big rate. For example, I hit the CPS Rewards rate of 1.9% most frequently. My worst interchange rate is 2.3%.

Customers who use this same scenario also need to add the merchant discount, per transaction fee, dues and assessments, and monthly statement fee. Paypal checkout is still offered; customer checkout is on the paypal web site. Customers rarely use it.

The old Paypal effective rate was 3.75% when I ran it just before switching and the new effective rate for my B2B stores which usually hit higher interchange rates because of corporate cards is probably going to be about 2.2%. The effective rate includes all fees- monthly statement, percent of transaction, per transaction fee and everything else.

Summary:
The old way (Paypal Pro) was cost efficient when the store first opened, but later became costly and I didn’t like that customers would see ‘paypal’ on their credit card statements when they paid via normal checkout. It was also a manual process when I wanted to partially refund a customer.
The new way (regular merchant account) , which includes authorize.net, has reduced bookkeeping and customer care time because of the superior transaction flexibility. In reality, those costs are probably much higher than what I am saving on the processing, but the hard cash savings is great too!

Old effective rate 3.75% vs new effective rate 2.2%. Your ecommerce effective rate will vary since the merchant discount, a fee over and above interchange, is usually tied to volume. Additionally the type of buyer correlates to the type of credit card used.

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