Friday, May 13, 2011

Direct Merchant Account VS IPSP/Third Party

Recently I read a post on directreponse.net (http://bit.ly/kUQ7fO) that discusses Limelights integration with CCBIll. I am a huge fan of this blog, I look forward to reading the posts and I know that Rich is clearly a person that knows a lot about this industry. That being said, there are some things that I don’t agree with and I think that every marketer should be aware of.

I think the move by Rick at LimeLight to integrate with CCBILL is a great one and I think a lot of merchants will use this service, however there are some important things to note and this based on feedback I have received from merchants who are working with CCBILL or other similar models.

1. This post clearly is against Offshore merchant accounts. I am really not sure why that is. I have boarded a lot of merchants offshore and they are running great. The pricing is a bit higher, settlement timelines are slightly longer (for the most part) but there are a lot of advantages to going offshore. I will get to those in another post because that is a whole discussion in itself.

2. For this IPSP Model, the rates are very high…with reserve and everything involved it can get really up there. This money can be spent on other way to grow your business, not processing. I understand that its an ”all in” solution but you are definitely paying a premium for it.


3. “their compliance team might as well be the FTC themselves” This is a direct quote from someone I know who is working with them. Because CCBILL is basically the merchant of record, their ass is really on the line. I don’t blame then, I would do the exact same and I am not advocating non compliance, but when changes need to take place for whatever reason (especially increasing conversions) you don’t want it to be a lengthy process. This leads me to my next point.

4. If you want to change something, it needs to go through an approval process. I understand that...and I definitely don’t blame this, but it’s a reason why this type of account isn’t for everyone.

5. “They host everything and integration is not easy” I have never integrated with them, so I can’t comment, but this is another complaint someone gave me.

A lot of things above are seen as positives and beneficial to the merchants, but I really believe that Offshore is definitely a viable option and you have more flexibility with a direct merchant account.

CCBILL is doing something right, they have been around forever, were /are leaders in Adult processing, but I want to present alternatives as their solution will not work for all large advertisers. As the online marketing space grows, its good for people to know there are options.

If anyone is interested in knowing more about a direct merchant account, offshore or domestic, I would be more than happy to discuss what is available.
After reading this post, its more about negatives towards the IPSP model, then positives for a direct merchant account. I will write one shortly that focuses on the positives.

JR

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