I’ve been in contact with a fellow who works at a hosting company who’s been helping me with a problem I had. Anyways, the current plan is to have them handle all of my website’s transactions. So I e-mailed the person who handles the credit card/merchant stuff and he responded with this, which I have no idea what it means:
“What is the dba (doing business as) for the company? Would you be
comfortable with $5000 to start? After approx 6 months you can ask for an
increase. Do you want Amex & Discover? Do you want Linkpoint or Authorize.net as your payment gateway?”
I could e-mail him back and ask this very question, but I’d rather look dumb and ignorant here (plus hopefully this will receive a quicker response)
DBA is also known as a fictitious name (at least here in California). It’s a second (or third, etc.) name you file with your county(Might be different in other states) for your business.
This means that your purchase limit is going to be $5000, it doesn’t say, but I’m going to venture say that meanss $5000 in sales a month. The reason for this limit is chargebacks, the merchant service provider wants to prevent somebody charging $1,000,000, you spending it and then having the customer call their CC company and cancel it(otherwise known as a chargeback).
That’s up to you. Amex and Discover can be a bit tough on merchants if the customers complain, they also offer extended warranties of quality and satisfaction on YOUR products and services. My AMEX Blue card lets me get my money back on anything 90 days after purchase, just because I am no longer satisfied with a product, even if the merchant won’t take it back. That money is coming out of the merchant’s pocket.
Authorize.net seems to be a lot more popular, although I do see Linkpoint mentioned here and there. If you can afford custom in house programming for the back end, it doesn’t really matter(or have the programmer decide), otherwise I’d go with Authorize.net
Don’t worry about looking dumb and ignorant.
Just ask your questions.
Really, you are paying them to do this for you, right? Why not be sure what you are getting?
To me, the kind of gobbledegook they sent you is a warning sign that they might be a pain in the ass to deal with anyway. No sane company should communicate with a client like that.
Most likely, yes, although I would verify this with the merchant service provider. Some banks do have minimums(otherwise they charge you fees), but that usually comes in when you have very good guaranteed rates, and that rate is only guaranteed if you meet the minimum.
I’m still confused by that, what exactly does that mean? Does that mean I have to be a registered business? Right now, I’m the only one working on this website idea that I have, and thus it’s a relatively tiny operation (to provide some perspective, I’m only 19). Though I do have high hopes for my website as it targets a large market.
Also, about the Amex & Discover thing. Are those the credit cards they support? What about Visa and Master Card?
Well, perhaps you’re right, but here’s what happened:
I posted a question about how to have a pay-per-download business model on some e-commerce message board. One of the more helpful response came from someone who works for this company. His programmer put together a system (specifically for me) that supposedly accomplishes exactly what I need (I’ll be testing it later to confirm). That was immensely helpful as I was unable to find any way to accomplish what i wanted to do, despite days of searching.
So we’ve been communicating via e-mail in regards to this for about a week, and he mentioned their hosting options. I figured it’d be easier if they handled the whole enchilada. At this point, we began talking about per-transaction fee for every purchase from my website. Since, ideally, the downloads I’ll be providing are only a $1 each, a low per-transaction rate is essential. He mentioned they might be able to swing a price as low as $0.15 or $0.20 (the average I found elsewhere was $0.35). At this point, he told me to e-mail the person who handles their company’s merchant options.
DBA (Doing Business As) is the name of your company if it is not incorporated. For example, John Jones DBA John’s Custom Widgets. If you are incorporated, then you would use the Corporate Name.
That is not entirely true in all states. At least in California, any business can get a DBA, for example, I know of at least two corporations that have DBA’s with completely different names, that they use when engaging in different aspects of their business.
Amex and Discover are add-ons. With my old merchant account (I forget what bank it was through), each month when we ran our billing batch we’d get a deposit in the bank from the Visa and MC accounts, and a separate one for AmEx. AmEx (and I’m sure Discover) have different rules and fees than Visa and MC.
I would go with Auth.Net too. We’ve been working with them for about 3 years now and they’re really pro and have good documentation.
Linkpoint, we just worked with them for a client and while their instructions are either non-existant or hard to find, their support was at least really hands-on. Auth.net has more tools and options tho. Linkpoint was cheaper.
ANyone can set up a DBA, I’m pretty sure. Your bank account would be under “Duderdude2 DBA My Kewl Company” and you rtax ID would be your social security number. Then any checks written to My Kewl Company can be cashed by you, and etc. I am not the foremost authority on this, tho
I’m still confused about “Amex & Discover” though.
Just to fill you guys in, the buisness I’m working on will offer streaming videos for a dollar per video. So we’re not dealing with any high priced items, if that matters.
Anyways, should I opt for the Amex & Discover thing or not? I’m still not even certain I know what it is.
You asked,
"Anyways, should I opt for the Amex & Discover thing or not? I’m still not even certain I know what it is. "
Based on my previous experiences running a small business, VISA & MC charge the merchant about the same transaction fees. Discover charges more than either VISA or MC. American Express takes a bigger cut than any of these 3.
Everyone I know with an AMEX has a VISA or MC account. There are a few people in the world who only have AMEX, but I think that’s rare. I wish I had a cite.
Same thing with Discover, but I only know a couple of people who use Discover.
Some folks would rather use a particular card due to the rewards it offers, the APR, etc.
So, in general (but maybe not in your case) if you take AMEX and Discover, you’ll probably have slightly more purchases. However, your transaction fees will be higher when customers decide to use AMEX and Discover. And some people who would have bought from you even if you didn’t offer AMEX will use AMEX, even though they coulda’ used VISA.
Ask your vendor if taking Amex and Discover will decrease your margins per sale. If they will not (maybe because your purchases are so little, perhaps) then by all means, accept them.
If they will be less profitable on a per transaction basis though, I would suggest you use both at first, and then re-asses the situation in 6 months or a year. Try cancelling AMEX one month and see what happens to sales…
I hope I was helpful. Not many folks do “Micro-Transactions” like you’re doing, so the pool of people who really know what you’re talking about is probably fairly limited.
Being a small businessman is like having children. Good luck to you and your kids!
If you’re asking about the requirements of the credit card intermediary, I have no idea. It may or may not care what name you use, or whether it has any legal standing.
But your state might. Even if you are an individual (as opposed to a partnership, corporation or other legal entity), it is likely that the law would require you to register any assumed name you are using for business purposes.
Usual disclaimer. Although IAAL, I’m probably not licensed in your state. In any case, I’m not your lawyer and you’re not my client. This isn’t meant to be reliable legal advice for your particular situation. See a lawyer in your state for that.
