Weekend Warrior Project: Payments through 2Checkout

This will by my first "Weekend Warrior Project" posting. I will randomly pick some obscure selling information you may have never heard of, and pick it apart, break it down, and give you the real skinny on the service.

2Checkout has been around for more than a decade. They once charged a lot of fees, but over the years with competition from low cost alternatives, they reworked their business model to a flat rate per payment that is similar to Paypal and others that can greatly benefit smaller sellers. They offer something that others like them do not though. On top of a competitive rate, they also give sellers the ability to accept Paypal payments through their account. Why may this be a big deal? Because we all know Paypal can be notorious for holding payments and setting limits for non-eBay sales on smaller sellers in the name of buyer protection.

2Checkout acts as a middleman to Paypal and a merchant account. Instead of signing up through 2-3 accounts, you carry one payment provider and accept either credit cards, or Paypal, all in a window that you can setup to match the colors of your website. View more here:

View the "Hosted Checkout"

So, what is a middleman in the payments world? 2Checkout uses a processor like Verisign, Linkpoint, or similar credit card processor with a rate of maybe 20¢+2.5%/transaction. They charge you a fee of 29¢+2.9%/transaction, and make a profit on the difference. And here is why it makes sense to use a middleman, instead of signing up with the processor yourself. 2Checkout absorbs all the responsibility of fees paid to the account (up to $50/month) and all the responsibility of maintenance for the merchant account. They also receive a reduced rate due to the sheer volume of payments they accept on your behalf by credit card or Paypal, that you would pay at minimum the same rate or higher to accept payments through the same processor.

Some of the features include Buy Now buttons, email invoices, buyer coupon codes, and electronic good sales. Here is an example of a buy now button linked to a test account. (This button will show an error because the account is not live)

2Checkout.com Inc. (Ohio, USA) is a payment facilitator for goods and services provided by eSellers Journal.

As always though, there are some drawbacks. For instance, smaller sellers tend to use online marketplaces, which are prohibited through 2Checkout likely because of agreements with their processors. There is also a $50 chargeback fee for fraudulent transactions, but this would occur with any processor as well.

They offer checkout through dozens of shopping carts, including Big Commerce, Magento, Prestashop, and Zen Cart, and give direct checkout integration through about 20 carts that are simple to setup.

2Checkout Shopping Carts

Sign up for a free trial at 2Checkout.com, and you can get nearly unlimited access the seller area without actually signing up for the service first.

See you next weekend for the Weekend Warrior Project!