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  1. #1
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    2checkout and PaySystem-which one has better fraud protection?

    May I ask if anyone can share their opinions?

    1) which one has better fraud protection?

    2) which one has the lower chargeback ratio?

    3) which one is better when handling chargebacks?

    Thanks.
    Last edited by CBR600; Nov 1, 2003 at 18:10.
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  2. #2
    Texan at Heart Corey Bryant's Avatar
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    Hello CBR600. I cannot really answer your questions - but give you a little advice on chargebacks. It is not 2checkout or paysystems fault on chargebacks. It is usually the consumer. If someone buys something from abc.com & then when they get their CC statement is says xyz.com - some people complain and that is when those things happen. Plus - Visa/Mastercard do not really like the aggregators. So their support is very minimal when it comes to the third party processors.

    I am sure Jacker can give you a few more points on Paysystems. It is good you are trying your best to determine which type of service will suit you.

  3. #3
    SitePoint Enthusiast EightManagement's Avatar
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    My vote is 2CO, plus the work done there to prevent chargebacks is top notch. They work to prevent the chargeback in exchange for a satisfied customer or a refund. Fraud is fantastic, double (and sometimes) triple checking large orders for fraud potential.

    I would contact sales@2checkout.com if you have further questions, they'll give you more detail into the actual processes involved in protecting your sales.
    Joshua
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  4. #4
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    I'm not sure which protects better but I can tell you that Paysystems will close your account if you have a certain ratio of total sales and chargebacks (4%). If you are just getting started, and have ONE chargeback they will close your account without even giving you a chance to explain. They don't care to keep you as a customer, it's a no-exceptions policy. Even if you try to fight the chargeback, which they hardly help on anyway.

    I know, they did it to me... I'm now with 2Checkout.

  5. #5
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    By the way, I had a CBR 600 Hurricane and loved it, before my wreck Broke a bone inside my knee and my collar bone and was in a hospital bed for over a month. My wife made me sell it of course

  6. #6
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    Good Saturday Morning to y'all!

    PaySystems values its merchant relationships and any decision to terminate a merchant account is carefully considered. Paysystems is governed by the Credit Card Associations rules and Visa and MasterCard continue to maintain their thresholds of 1% for chargebacks. We often assume significant risk on behalf of some merchants and allow them to reach chargeback rates of up to 2%. Unfortunately we cannot support higher rates and our policies must be enforced so that we maintain our commitments to the card associations and our partners.

    We do however understand that there can be mitigating factors which adversely affect chargeback rates and will review any termination due to extenuating circumstances. Beley, I am not sure the exact reason for your account being shut down but I can assure you that the decision was made based on an assessment of the risks your account gave us vs. the benefits your account gave us.

    Corey, you put it well when you said that VISA/MC doesn't always like the aggregators. Sometimes, it is hard to fight charge backs because of their policies. However, we do make an effort to fight each and every charge back if the merchant feels it wasn't warranted and has evidence thereof.

    I think the above statement could have been written by a 2CO sales guy just as readily as it was by me. The nature of our businesses are very similar...the difference is the volumes we process. Because of our huge volume ($3 billion annually) we are able to mitigate aggregated risk easier.

    Cheers
    James

    Thank you.
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  7. #7
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    The chargeback was for a $5 charge, and was the only chargeback we ever had... and was simply that the customer didn't understand how to cancel an account, we would have been happy to refund their money as we clearly state our guarantee.

    I was with you guys for 6 months and did quite a good bit of transactions through your service. I spoke to several representatives and managers but was not able to convince you guys that the only chargeback in 6 months wasn't enough to turn my account back on. Rediculous if I say so myself.

    I learned a valuable lesson from the experience and don't think that Paysystems values it's clients at all. Of course, that's my personal opinion.

  8. #8
    Formerly known as RockNRollPig Shpigford's Avatar
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    From my experiences 2CheckOut sucks it up pretty bad. I spent probably a total of 4 hours on the phone with them trying to change a credit card number and the only response they could ever give me was "we don't know why it won't work." So that just kinda screamed "hey...we're unproffessional" and so I switched to PaySystems and have had no problems.

  9. #9
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    Brandon - I apologize for the fact that your account was handled unsatisfactorily. If you spoke to several people who would not turn your account back on, there was probably something about your account which made them wary and collectively decide not to re-open your account.

    Josh - thanks for the support.

    Cheers
    James
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  10. #10
    SitePoint Zealot ~karen~'s Avatar
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    I agree with Beley. My account was also closed due to ONE chargeback in the 2 years I was with Paysystems. And in my case it was because the client did not recognise the 'paysystems' name on his statement. One he realised who paysystems was, he cancelled the chargeback.

    And at the end of it all, my account was closed, I never heard any response at all about the chargeback status, and I can not receive any response at all now regarding my account.

    The chargeback amount was even well below the 2% ratio that is set by the Credit card companies, and the account was still closed.

    I understand if a company is swamped with requests, especially in light of all the accounts that have been closed recently. But I do not understand why merchants are just ignored and punished due to an error. To ignore requests for answers is truly unprofessional.

    Karen
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  11. #11
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    Karen

    Visa and MC changed the allowable charge back rates to 1%. As a result of this, many merchants with different processors were forced to close. We are reviewing any merchants that had their account closed due to a statistical coincidence between our sweep of merchants and random charge backs.

    I am not sure if that makes sense...but if you feel that your account was closed due to extenuating circumstances, and want that account reinstated, email me, and I will make sure that the account is reviewed and decided upon. I make no promises that the account will be re-opened - people in other departments make the decisions and make them based on their wealth of collective experience but we will review your account at the least.

    I sincerely hope that we can remedy the situation with you, Karen.

    Cheers
    James
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  12. #12
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    Thanks to everyone that replied to this thread. I think 2Checkout and Paysystems are the two companies that are the top companies for third party processing. The third one would be iKobo. Although I am not familiar with all of them but I think they are all better than PayPal LOL.
    Honda CBR 600 ROCKS!

  13. #13
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    Hey it's cool that u have a CBR!
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  14. #14
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    Exactly! When it comes right down to it, we are all in it for the bikes...

    Guys, this thread looks like its tailing off...hope I made it clear to everyone that we are here to provide the best payment processing services. As a company servicing 20 000 merchants, please understand that our decisions are based on the best interests of the majority and not because we are trying to shut down the minority.

    Sat. evening, time to go out for some beers.

    Cheers
    James
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  15. #15
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    Jacker, may I ask if the merchants that use PaySystems can set it up in the panel such that orders would be processed "only" if the billing address matches with the shipping address? I think Paypal has a feature like that.

    Thanks. By the way, how many % of chargebacks occurs to orders that're shipped to the billing address?
    Honda CBR 600 ROCKS!

  16. #16
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    Our payment pages ask for a shipping address and a billing address. We use AVS in determining whether the addresses are valid, etc... In the MCC, there is no way to specify orders only being processed if the billing matches shipping. However, if you set the account up with TPP-PRO (a simple mode change), you could auto-populate our payment page. When collecting the addresses on your own page, you can take the addresses and display a message that states you only ship to billing addresses or something similar. That way, before the consumer even gets to PaySystems page, you have ensured that you are shipping to the billing address.

    To answer your second question, I think that all security checks lower charge back rates in increments. However, charge backs are not something that merchants should be scared of. Sure, they happen, but they will always happen regardless of what security checks are in place. If there was a way of absolutely preventing them, we would all be using it. Mitigating the risks of charge backs is smart business and all merchants should do that, but don't allow the fear of charge backs to prevent you from being successful.

    Cheers
    James
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  17. #17
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    Thanks Jacker,

    May I ask if you can post the details of TPP-SALE, TPP-CATALOG and TPP-PRO? Can the merchant choose the mode? Or only PaySystems can choose the mode for each merchant?

    You said that " When collecting the addresses on your own page, you can take the addresses and display a message that states you only ship to billing addresses or something similar. That way, before the consumer even gets to PaySystems page, you have ensured that you are shipping to the billing address..."

    If the setting of shopping cart script (oscommerce) allows the customers to enter both the billing address and shipping address....in this case, how can the merchant "take the addresses and display a message that states you only ship to billing addresses or something similar?" Sorry I just want to know more details.

    By the way, is it possible to set it up such that the order would not be processed immediatley if the billing address does not match the shipping address...and the customer would receive an email informing them to fax or email their id info or a photocopy of the card before the order would be processed? can your company set it up such that the customer would have to send those info directly to your company and let your company verify all the info...then process the order?

    In my humble opinion, it's ok if your company charges an extra fee to do that because I am sure many people are looking for more options and would not mind paying more. If I were the merchant, I would not mind paying a higher discount rate.
    Honda CBR 600 ROCKS!

  18. #18
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    I can explain the differences between SALE, CATALOG and PRO briefly: SALE is the mode normally used for a one-product website. Customer chooses the product, selects a quantity and checks out. CATALOG is used when a client purchases several items on the website using a shopping cart (ours or another). PRO is used for either but our payment page is autopopulated. We will tell you the mode that will work best for your site but you can have it changed at anytime. It takes about an hour to activate any mode change.

    When I speak of you matching the billing address vs shipping address, I am talking about your own coding, whether from scratch or mods on a shopping cart. We do not offer a service where the customer faxes in his ID, etc. It is simply too time-consuming...we process 300 000 transactions each day. I was suggesting that you have code on your site that only allows for the entry of one address, citing specifically that you will only ship to that address. (maybe arrange for other orders to be made and enetered manually...)

    Cheers
    James
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  19. #19
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    Jacker, it's complicated to change the code on the shopping cart that only allows for the entry of one address because most merchants offer other payment options including checks, money orders and wire transfer etc. And the shopping cart allows the customers to enter both the billing and shipping addresses so that the merchant can have the record. It's hard to change the code. In this case, that means although the merchant can put a line in the shopping cart saying that the billing address must match the shipping address...but technically if the customers enter two different addresses, the order would still be processed immediately...is that right? In this case, can the mechant refund the money via the control panel? And how long would it take to credit the money back to the customer's cc account?

    Actually according to the law, are the merchants of PaySystems allowed to request the customers to fax or email the photocopy of their driver license and cc card to the merchants themselves (instead of to PaySystems) to verify their id? I am thinking that if they are allowed to do that, then it might solve the problem. Do the merchants of PaySystems have a record of the credit card numbers of the customers?

    I totally understand that it's time consuming for PaySystems to verify , but I truly hope that PaySystems can do more to help the merchants to avoid frauds. It'd be great if they can either allow merchants to reject orders that do not ship to the billing address (like PayPal), or if they can hire more people to do the verifications (review photocopies of id and cc cards that're faxed or emailed by the customers if the billing address is different from the shipping address (like what 2checkout offers). I hope they can offer a third plan (with higher rates) for clients that want this option because PaySystems' competitors offer these kind of options.

    I still think that the best way to avoid frauds is to ship to the billing address only (or ask the customers to send a copy of their id and cc.) If they can offer more options, then it can help reduce the # of chargebacks. Having said that, I know PaySystems would like to keep the current discount rate which is generally lower than 2checkout but I hope they can hire some geeks (the investment is worthwhile) to set it up such that the merchants can choose whether the orders would be in pending mode or would be processed immediately if the billing address does not match the shipping address.

    Thanks again for answering all the questions, Jacker! I think you are a great rep of PaySystems!
    Honda CBR 600 ROCKS!

  20. #20
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    I am afraid this thread is turning into an informal support thread for PaySystems. I think we would be following the forum policies better if we took this to email...I will answer via email.

    Cheers
    James
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  21. #21
    Texan at Heart Corey Bryant's Avatar
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    Actually CBR600 - it is not good practice at all to ask for a copy of the CC & the driver's license. I would hope that no consumer would ever give someone a copy of that information. At this point, you have two forms of ID for that person - and that is not good. With all the privacy laws, a copy of the CC could be OK - but you would be pushing it after that. If anything ever happened to that person & his identity was stolen, you & your company could become involved in the investigation.

    I mean - would you actually fax over a copy of your CC & your driver's license to someone you did not know because you wanted to buy a digital camera?

  22. #22
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    Hi Corey, thanks for your reply. I am very interested in discussing this because I do want to find out more details. As a consumer, I would not submit a copy of my driver license and cc unless I request the company to ship the items to an address which is different from my billing address. And of course it also depends on what company I am doing business with.

    I understand your point of view because as a matter of fact, I do have doubts about whether the merchants can actually do that, and that's why I posted the questions so that we can discuss the legal issues. I've seen certain ecommerce sites that require the customers to send a copy of their driver license if the billing address is not the same as the shipping address. I do wonder if they are actually allowed to do that because you are right that in certain places, people are not allowed to request others to send such info. But then again, it may depend on which country and which state the business is located because different areas might have different laws. I am not familiar with the law regarding this so I hope others can shed some light on this. If the federal law prohibits the merchants to request the customers to send a copy of their driver license etc, then I am sure those ecommerce sites (that request the customers to send a copy of their driver license etc) should be informed that they are not allowed to do that. And the government should educate the consumers not to submit such info to merchants. But if it's not the federal law but state law etc, then I hope someone can post more details.

    My posts are regarding to cases in which the biling address and shipping address are not the same. I don't think it's necessary to verify the customer's id if the billing address and shipping address are the same.

    If the customer's billing address and shipping address are not the same, I actually hope the cc processing company would do the verification (instead of the merchant).
    Honda CBR 600 ROCKS!

  23. #23
    Texan at Heart Corey Bryant's Avatar
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    You can report them but it really depends on the processor of they want to persue it. That would mean possibly losing a customer. Most CC processors have it stated that you cannot request a CC minimum, yet you see a lot of merchants saying a $10.00 minimum CC charge.

    I might consider sending you a copy if I mark out my DOB & my DL#. If you have that information along with my CC # - you can easily get my SSN & then easily get a CC for you in your name.

    But if I wanted something - I doubt I would send you a copy of it in the first place. People want very easy & now you are asking them to enter this information & then make a copy of two pieces of ID & fax it to you to buy a product.

    I understand that you are trying to stop fraud - but this is not the way.

    • Check the IP address. Does it originate in Asia & is the consumer in the US?
    • A lot of processors also offer different types of scrubbing - check to see what is offered there. The larger the CC processor the better the scrubbing on some aspects. I also work with another company that IDs the the computer with an algorithm. If this algorithm matches their DB, the CC charge is declined.


    The chargeback is usually more troublesome for those who have a third-party processor because Visa/Mastercard are trying to put them out of business. They want everyone to have a merchant account so they know exactly where the money is going. Be glad you do not have a high risk merchant account, gaming, porn, etc. Those people are really being raked over the coals

  24. #24
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    That makes sense!
    Honda CBR 600 ROCKS!

  25. #25
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    Thanks Corey.

    James
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