DirectPayNet

Category: PAYMENT PROCESSING

  • Multiple Shopify Stores, 1 Account? Make the Most of Ecommerce

    Multiple Shopify Stores, 1 Account? Make the Most of Ecommerce

    Shopify is one of the most popular eCommerce platforms, and it’s no surprise why. It’s powerful, easy-to-use and has hundreds of themes to choose from. There are also many ways to make money with a Shopify store, such as opening up an affiliate program or selling your own products.

    However, there may be times when you want to have multiple stores on one Shopify account – whether it’s because you want to test out different ideas or run different campaigns at the same time. In this blog post we’ll explain how to make the most of your e-commerce business ideas while answering some FAQs about Shopify.

    Can you make multiple Shopify stores on one account?

    No, you can’t. Shopify has a limit of 1 store per account. If you want to create different stores, you will need to use different email addresses for each store. Doesn’t matter if your dropshipping, selling software, or hand-made ceramics. New store, new account.

    Shopify won’t limit the number of accounts you open, given you have a unique email address for each. They actually encourage you to open multiple Shopify accounts. Shopify is a sales platform, so they do want you to sell. But they also want to nickel and dime you along the way.

    You can open subdomains with which to sell different products or the same products in a different way. But they will be linked to your parent domain, which doesn’t help attract a new target audience.

    Can you link 2 Shopify stores?

    You can’t link two Shopify stores. You need to have a separate Shopify account for each shop that you want to sell on.

    This is because each shop refers to a separate business, and every business should (most of the time) have it’s own MID (Merchant ID). For Shopify, if you want to sell products using the same MID then you should use the same store. The platform doesn’t see the opportunity or value in running multiple Shopify stores under one account.

    In contrast, it’s a smart move for Shopify for a couple of reasons:

    1. Shopify gets to charge you for each online store you have running, earning them more.
    2. Separating your ecommerce stores organizes your sales, transactions, real-time inventory management, order management—everything business- and merchant-related, so when it comes time to file you’ll be better prepared.
    3. Shopify optimizes each store separately without backend trouble, like for SEO or Google Analytics or even managing inventory SKUs. Store owners benefit from a cleaner experience because it’s only focused on the one store.

    If you already have a merchant account and would like to add Shopify as another channel, then go ahead and contact your existing provider about this. If they don’t provide support for adding additional channels, it might be time to look at other providers who do!

    It’s possible to use a merchant account outside of Shopify’s walled garden with your Shopify store. So you can set up a unique payment gateway and use a different processor than what Shopify tries to sell you. With that external account, it’s often possible to use its API on more than one website.

    Do you need a new account for every store?

    You will need a separate account for every store, but you can have multiple accounts on the platform. Your accounts won’t be connected, can’t interact with one another, and won’t share the same billing statement.

    Further, you cannot manage multiple Shopify stores under one account. There is no connection between stores or different accounts on Shopify. Each is its own entity. That is, unless you open an Shopify Plus account which runs at least $2000/month and is geared more towards enterprises. This option is technically a multi-store account, but it is expensive and limited.

    Each Shopify store you open is billed separately.

    We can’t drive this point home enough: you will be billed for each store you open on Shopify.

    The cheapest pricing plan offered is $20/month. Let’s do some math. If you want 3 separate stores, then that’s base-line $60/month. That price doesn’t include the cost of payment processing and Shopify’s processing rates are abysmal. So you’ll pay minimum $60 every month and then 2.9% + 30¢ for every transaction. The $60 is whether you sell or not, it’s basically a service fee. The processing rate kicks in when you start selling.

    In short, Shopify is expensive. There’s no denying that. But they’re making the experience worse by disallowing valuable customers from using their current accounts to open new stores.

    To lower costs, use another e-commerce platform with a merchant account.

    If you’re looking for the best ecommerce platform on a budget, Shopify is not for you. The fact that there is a monthly fee makes it less cost effective than other platforms. Additionally, there are some features that are only available through third-party apps (like email marketing) or with higher pricing tiers.

    If you’re looking to expand your small business quickly and need more than one store, then Shopify may be too inflexible for your needs. Instead, check out these options:

    • Build your own store on WordPress and use a commerce template/plugin
    • Build your own site from scratch and hire a developer via freelance sites
    • Use a competitor like BigCommerce or Big Cartel

    Each option has their pluses and minuses, but they are much more flexible and can be significantly cheaper (especially in the long run) than Shopify.

    Shopify competitors generally have connections with payment processors and gateways, which makes it easy. But you aren’t obligated to use them. In fact, it’s often better to take the longer route and open up your own merchant account so you can avoid any troubles that come with the quick and easy ones like Stripe.

    One merchant account can be used even if your business operates on different sites.

    For example, if you have a Shopify store with a different domain name than your main site, and you want to use the same merchant account for both, it’s completely possible. You can just get an SSL certificate from Let’s Encrypt or another provider.

    This will secure your store’s connection and make sure that the data you transmit is safe. Your customers will also trust you more because they know that transactions are protected. If you’re in a position where having multiple merchant accounts is necessary (like if you want to accept payments from different countries), it’s best to use a domestic payment processor—meaning one from the country your customers are in—because it will be able to process payments without running into issues.

    While it’s not the most likely scenario, you can absolutely use a single merchant account for multiple sites IF all of those sites operate under the same MID. One merchant account, one MID. That’s the rule.

    Why would someone need multiple stores with one merchant account?

    There are many reasons why you might want to use a single account for multiple sites. From different target audiences in international markets to testing customer experience changes, there are plenty of reasons to open new sales channels. Here are a couple of the top reasons.

    Accept Different Currencies

    Let’s say you don’t just want to translate your site and convert prices. Maybe your domain is something regional, like example.us. European customers probably won’t want to buy from that knowing that shipping might cost too much or products simply aren’t geared toward them. (If you’re in the US, how many times have you run away from sites that end in example.cn?)

    Though your order fulfillment options can include international shipping, it doesn’t always attract the international crowd. They want a marketplace designed for them.

    In this case, you’re operating the same business and selling the same products, but you are using a different domain. One that targets the different audience. Because it’s the same company, you can use the same MID and therefore the same merchant account.

    This is also great for adjusting prices, not just converting them. Maybe this other customer base responds better to more expensive pricing. It would make sense to charge more per product, which takes more effort than simply converting the currency.

    Test New Products

    Testing different products is always a good idea. Maybe you’ve decided to test them outside of your storefront on a dedicated landing page. It’s often a good idea to separate risky ideas from your current sales tactics and offerings to avoid any negative side effects.

    Shopify won’t let you open this new landing page with a new domain name and product, even if you’re selling it under your MID. But a real merchant account will.

    With a merchant account, you can open as many landing pages and domains you want to sell products as long as they fit within the merchant category code you chose for your account and are sold under your MID.

    And example of what would not work is if you sell software and have a MID/merchant account for that but want to try selling coffee under the same one. It just doesn’t work and if you try you’ll get in trouble (i.e., terminated).

    You can also test new products with new payment methods. Like maybe you want to open a store that doesn’t process credit cards, but only works with ACH or debit. This is one way to do that.

    Fun Fact: Multiple Merchant Accounts Can Be Used on the Same Store

    You can open as many merchant accounts as you want with the same MID and MCC (or even different MCCs), and you can use them on the same e-commerce store.

    Opening a Merchant Account Is Cheaper and Safer Than Navigating Shopify

    We get it, Shopify is user-friendly. It’s one the top e-commerce platforms that exists in the entire world. You know it, your customers know it, your friends use it. But it’s not flexible enough for entrepreneurs like you who want to grow and scale their businesses.

    Merchant accounts make that happen. Open one for your Shopify store today (not Stripe, not PayPal, a real merchant account) and you’ll see the difference immediately when it comes to pricing and customization.

    DirectPayNet specializes in providing merchant accounts for online businesses. Speak with us for more information on Shopify, Shopify Payments, and opening a real merchant account.

  • What Is “stel aggregation”? And Why Does It Appear on Customer Bank Statements?

    What Is “stel aggregation”? And Why Does It Appear on Customer Bank Statements?

    Stel aggregation is the process of combining multiple small transactions into one larger transaction.

    This is often done to make it easier for banks to reconcile their customer accounts and prevent overdrafts. Stel aggregation takes place when a customer has multiple debits made by different merchants on the same day, but they’re not all paid at once.

    For example, if someone make three purchases at three different stores on the same day but it doesn’t get withdrawn from the account immediately, the issuing bank may turn these purchases into one large transaction so they can be processed together.

    While that sounds great, it makes things difficult if a transaction needs to be disputed. Often when customers see STEL aggregation on their statement, it leads to a chargeback. Find out what you can do to prevent this from happening on your store below.

    Stel aggregation is a payment processing technology used by many businesses to process debit card and credit card payments.

    When a business uses this type of technology, it allows the issuing bank to group multiple transactions together into one larger transaction. This helps to reduce the number of transactions that need to be processed at a given time.

    On the surface, this may seem like a good thing because it means less work for you as a merchant. However, there are some issues with how these aggregated transactions are processed that can lead to problems down the road.

    One of the biggest culprits of STEL aggregation is Stripe, affecting business who use their credit card gateway.

    The name “stel payment aggr”, “stel aggregation”, or “eea stel aggregation” appears on statements instead of the business name.

    This can cause confusion for cardholders and may lead them to dispute the charge or claim that they didn’t make it. This can be a huge headache for merchants who are trying to keep their customers happy and avoid chargebacks.

    Another issue with stel aggregation is that it makes it harder for businesses to track sales by customer because they don’t receive the full name on their statement.

    Stand in the customer’s shoes for a second. You buy a few things online from different stores, then you get a notification on your phone from your bank that you spent $400 at stel aggregation. Immediately you think, “no I didn’t” and start an investigation. But since it’s under this aggregated billing description, there’s no information from any of the stores from which you made a purchase.

    Sure, in this case you can look at what you purchased and add them all up to get $400. But what if you purchased from stores who don’t use stel aggregation tech? Then how do you know which stores to compile and which ones you shouldn’t? DOI (date of invoice) in this case doesn’t matter much because there’s too much confusion around the entire scenario.

    Stel aggregation is a messy convenience and is best used only as a backup processing solution for serious businesses.

    If your customers see this on their bank account statement and do not readily recognize what it’s for, it can lead to chargebacks.

    Chargebacks are a big problem for merchants—they can be expensive and time-consuming. If a customer files a chargeback with their credit card company, the bank will investigate whether the transaction was authorized by the consumer or not.

    Chargebacks can negatively impact your business in several ways:

    • They cost you money. You refund the purchase to the customer, but only the purchase amount. You don’t get refunded for the transaction fees. On top of that, you’re charged a fee simply for receiving a chargeback.
    • They can impact your ability to accept credit cards in the future. If you receive too many chargebacks, processors and acquiring banks can see the chargeback ratio associated with your business. Too high and you’ll get denied new accounts. What’s worse, you could get up on the MATCH list.
    • They can damage your reputation with customers and other businesses. Chargebacks aren’t just an internal KPI, customers who chargeback a transaction are also likely to leave negative reviews on sites like Trustpilot or social media. That can seriously hurt your business, not only for attracting new customers but when applying for merchant accounts.

    What you can do to prevent “stel aggregation” from appearing on bank statements for your customers.

    Here a few really easy ways to prevent stel aggregation from appearing or ensure you won’t receive a chargeback if you still need stel aggregation to appear.

    Get a Real Merchant Account

    STEL aggregation is a technology that combines multiple payment processors and transactions into one simplified experience. Stripe, PayPal, and Square are all payment aggregators who use this technology for all businesses that utilize their gateways at checkout.

    When you open a real merchant account, you’re connected to payment processor that supports your business. The risk of aggregation is null. You have full power over when invoices are sent, when charges take place, and so on.

    You’ll also be able to accept more than just Visa, Mastercard, or American Express. You can offer ACH for direct debits and payment plans, both of which aid in fraud prevention and ensure banks won’t flag your business.

    Final point: with a real merchant account, you pick and choose the plugins you want to work with your store and gateway (whether it’s on desktop, iOS, or some other platform). You won’t have to settle for the built-in limited functionality of aggregators.

    Change Your Billing Descriptor

    Even if you are using a Stripe account or the Stripe API, you can—and should—change your billing descriptor. While it may not prevent the aggregator from doing what it does, it will still help customers recognize your business.

    If you’re confused about how to go about changing the descriptor, don’t hesitate to contact your service provider.

    Notify Customers via Email

    When you send the receipt for a customer’s purchase, show them exactly what should appear on their credit card statement.

    This is your chance to warn them of seeing stel aggregation instead of the store name. Sending this with the invoice is a great way to avoid chargebacks and inform customers of what they might need to anticipate. This is also a good chance to tell them the charge might display a higher dollar amount if they’ve purchased from other stores using the same payment processor.

    Only Schedule Large Payments

    Alternatively said, don’t schedule every transaction. Smaller ticket items don’t need to be scheduled, but you could benefit from doing so with larger ticket items.

    If a customer is purchasing something above $1k, break up the payment. When doing so, notify them of the breakdown (i.e., how you plan to space out each payment) and stel aggregation characterization. You want to be as clear as possible.

    STEL aggregation is a nuisance for merchants and can seriously harm your business. Resolve the issue now with a long-term payment processing solution.

    That solution is to open a merchant account. A merchant account will give you access to a payment processor that’s equipped with the tools necessary to prevent stel aggregation. Don’t wait until it’s too late. Protect your business and your customers by opening a merchant account today.

    Don’t be fooled by the convenience and simplicity of payment aggregators like Stripe and PayPal. Their SDKs may be good for short-term sales or backup processing solutions, but they cannot support your business for the long haul.

    Contact us today. Our merchant account experts are on the line and ready to get your account set up so you can start processing safely.

  • How to Prevent False Declines on High-Ticket Transactions

    How to Prevent False Declines on High-Ticket Transactions

    False declines are an annoying nightmare for merchants selling high-ticket items. The customer clearly wants your product and the only thing getting in their way is their own bank!

    Here, we’ll tell you why false declines happen and how to fix it. Having a fluid customer checkout experience is critical for maximizing customer lifetime value and minimizing overall risk. With the right solution in place, merchants of all sizes can enjoy the benefits of enhanced fraud prevention as well as better data management and customer experience.

    What’s a false credit card decline?

    A false decline is a transaction that is declined by the card issuer, but should not have been. It’s a “false” decline because it meets all of the requirements of the card issuer’s fraud policy.

    This can be very frustrating for the merchant and their customers, who are left waiting for hours as their orders are put on hold or cancelled altogether. Even though most false declines can be corrected if the cardholder calls their bank, that extra step is sometimes the tipping point between making a sale and failing to secure it.

    How do false declines happen?

    When the customer enters their card info on your payment gateway, it has to go through the processor and approved by the issuing bank. Generally with false declines, the issuing bank is the problem.

    No matter what reasoning occurs, the state is the same: a “transaction failed” message appears in some form and the order doesn’t go through.

    Luckily, you have a few options for correcting this automatically (where possible) and with a slight nudge to the cardholder. We’ll get into how shortly.

    Why does it happen?

    High-ticket transactions are those that exceed a certain amount of money. For example, if you’re selling an item worth $1,000 or more, it would be considered a high-ticket transaction. High-ticket transactions are often subject to additional fraud prevention measures by credit card companies and banks.

    For any transaction, the biggest reason declines happen is because of bad card information like entering the wrong billing address or shipping address or incorrect authentication (CVV/CCV). These are soft declines and don’t have as large of an effect on the decline rate or result in chargebacks as hard declines.

    There are many reasons why a high-ticket transaction could be declined. The following are the most common:

    • The transaction is unusually high for the cardholder’s account. This may happen when a new customer makes their first purchase with you and doesn’t have much credit available on their account. It can also happen if a customer has just made several purchases in a short period of time and their spending limit has been reached.
    • Multiple charges in a short period of time. If you see multiple card purchases coming through your account that are relatively low in value (less than $20) but charge to the same card number (for example, four separate transactions for items less than $20), this may indicate fraudulent activity and result in a decline of future transactions with online merchants where this type of activity takes place frequently.
    • Card not present environment (CNP). Online payment processing is considered CNP because there is no physical representation of a customer’s credit card when they’re buying something online. Therefore, there’s no way to verify that it’s actually theirs or that the purchase is authorized to use it. Because other parties have access to all sorts of sensitive information about us these days (think social media accounts), it’s easier than ever for criminals who want our money (or our personal data) to obtain it just by taking advantage of these vulnerable situations.
    • The card number is flagged as suspicious by the issuer’s fraud policy. This could be because someone else used it to commit fraud or because they’ve recently had fraudulent transactions on their account.

    What can merchants do to reduce error rates?

    Merchants can help reduce error rates by taking steps to ensure that their legitimate customers are being treated fairly. In many cases, merchants assume that it’s the customer who’s wrong—this is an easy trap to fall into, but it’s not usually the case.

    Here are a some things to consider.

    Use a Domestic MID

    If you’re charging US customers from a European MID or vice versa, there will be issues with potential fraud from the issuing bank. The bank only sees their cardholder’s account trying to make a foreign purchase, so they act fast.

    The best solution in this case is to get a domestic MID. Open a merchant account in the locale of your customers. Europeans should be making purchases through your EU MID, US through your US MID, UK through your UK MID. You’ll see an immediate drop in false credit card declines.

    Add ACH Option for US Customers

    When it comes to high-ticket items, the ACH payment method is the best way to go. It has the least likely rate of being falsely declined.

    For European customers, add a SEPA option for high-ticket items.

    Display Pop-up Messages for the Customer

    Let the customer know that the transaction is quite high and they’ll likely need to approve it with their bank. You can do this preventatively or after they submit their card details. The message should inform them about why their purchase was/will be declined and to call their bank, then try again.

    Charge in Installments

    Try to get the ticket size down to under $1000. Usually, purchases under that amount won’t get flagged unnecessarily. Then you can charge the remaining amount in 24 hours.

    Or you can offer installment plans where the customer pays a portion every week or two weeks, like how Klarna or AfterPay work.

    Check your MCC with your Processor

    Every merchant has a Merchant Category Code assigned to their business that tells processors and banks the category of your business. During economic downturns, certain MCCs are deemed extraneous or luxurious. Purchases from merchants in these categories will get flagged and declined.

    These are called high-risk categories in which high-risk merchants operate under.

    Most merchants fall into several categories, which is good news. So you can call your processor or your merchant account provider and open an account with a code that doesn’t fall under “luxurious”.

    Customize Your Gateway

    The more hard declines from transactions like insufficient funds, stolen cards, etc. that your gateway tries to process, the dirtier your MID gets. With a dirty MID, legitimate transactions will get declined more easily, resulting in more lost revenue.

    Clean it up by customizing your gateway and blocking repeat transactions, retries, certain card payment numbers, and more.

    Too often, consumers are denied the products and services they want, with no real reason given.

    When trying to purchase a high-ticket item, it’s helpful for the customer to know why declined transactions happen. Unfortunately, the reason is almost never given. They’ll get an automated message like: “We’re unable to process your payment at this time.” Or worse yet: “Our systems have detected suspicious activity with your account.” The lack of information from credit card companies can be frustrating for consumers—especially since they often don’t know how or when they can fix their situation.

    In addition to being frustrating for consumers, false declines can also impact retailers negatively. When a high-value transaction fails due to fraud filter software, businesses lose that sale and may need additional resources in order to address customer complaints.

    A more proactive approach to fighting fraud can make the online experience smoother and safer for everyone.

    For merchants, the challenge of preventing false declines on high-ticket credit card transactions can be a big problem. A consumer’s experience with your site may be impacted by fraud detection issues, and they may not come back again because of it.

    As long as we continue to use this reactive approach to fighting fraudsters, online shopping will always feel like a riskier prospect than it should be. Merchants need to adopt more proactive approaches focused on prevention rather than reaction.

    Use these tips to prevent false declines, and make sure you’re using the right merchant account.

    False declines are a pain for both merchants and consumers. They can cause frustration and lost sales, while also creating unnecessary expense for card issuers. These losses can add up quickly, as some merchants see high rates of false declines when accepting credit cards online. As a result, it’s important that you know what you’re doing to avoid them in order to keep your ecommerce business running smoothly.

    The experts here at DirectPayNet can help you open a merchant account with the right MCC and give you even more instruction on how to prevent false declines in the future. Talk to us today to learn more.

  • All Your Questions Answered About Accepting Crypto as Payment

    All Your Questions Answered About Accepting Crypto as Payment

    If you’ve been following the news, you’ll know that cryptocurrencies have been on a rollercoaster ride. While there are still many questions surrounding crypto, one thing is clear: it’s here to stay.

    In fact, business owners from all industries should start considering accepting cryptocurrency payments for their goods and services. Here’s what you need to know about accepting crypto in your shop.

    Why accept cryptocurrency in your business?

    Cryptocurrency is the future. It’s not only here to stay, but it’s also a technology that will continue to push the boundaries of what we know about money and commerce today. Businesses that accept Bitcoin are showing their customers they’re forward-thinking and open to new ideas. This can help you attract new customers and increase your brand loyalty by making your e-commerce business more accessible than ever before.

    Currencies like Bitcoin and Ethereum have been around since 2009, but most people haven’t heard of them until recently when their value skyrocketed in 2017.

    How can my shop accept cryptocurrency?

    Crypto is still in its infancy, with many people telling stories about how it’s going to change the world. However, even if crypto does become mainstream in the future—and we believe it will—there are plenty of reasons why your business should begin accepting cryptocurrencies as a payment method today:

    • Customer convenience: When customers make purchases at your store using crypto instead of cash or credit cards, there’s no need for them to hand over their personal information like an ID or a credit card number. This makes purchasing items more convenient for shoppers who prefer privacy when spending money online.
    • No transaction fees: Credit card companies charge businesses up to 3% on each purchase made with plastic; if you’re selling something priced at $100 per item and get charged $3 convenience fees on nearly every sale equalling dozens per day throughout the year—that adds up fast! By accepting crypto as payment option instead, you can avoid such charges (depending on the processor).

    What is the best way for a small business to accept crypto?

    There are several ways to accept cryptocurrency as payment for your business. The most popular option is to use a crypto payment processor, which allows you to accept multiple types of crypto payments including Bitcoin, Ethereum, and Litecoin.

    You can also choose to keep your own private keys with a cryptocurrency wallet such as Exodus or Electrum, but this requires more technical knowledge on the part of your customers.

    Another option is using a cryptocurrency exchange such as Binance or Bitstamp, which will allow you to convert bitcoin into dollars (or vice versa) before sending it off to another user who accepts bitcoin payments by using their own wallet address instead of yours. But this method can get confusing and messy when tax season comes around, not to mention the volatility of the crypto market means you might cash out for less than the initial deposit.

    What are the top crypto coins in terms of market share and value?

    Bitcoin is the first cryptocurrency to be created and it’s still considered to be the most popular one. It’s often referred to as the gold standard of cryptocurrencies, even though its value has been on a steady decline since last year.

    Ethereum is another option if you’re interested in accepting crypto coins as a form of payment, because it’s an open-source platform that allows developers and users to create decentralized applications (DApps). DApps are built on top of blockchain technology and can be used for things like voting or keeping records. Ethereum also allows people to create tokens which represent an asset (think NTFs) or utility and can be used for everything from buying goods online to paying for electricity bills via smart contracts.

    Ripple is yet another type of virtual currency that has become popular recently thanks largely due its association with traditional banking institutions like Santander Bank or Western Union. Ripple coins are called XRP, not surprisingly since they were created by Ripple Labs Inc., who also developed their own network protocol called Interledger Protocol (ILP) which enables transactions between different ledgers (e.g., Bitcoin vs Ethereum).

    Otherwise, the most popular and stable crypto coins include:

    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Ripple (XRP)
    • Litecoin (LTC)
    • Dash (DASH)
    • Monero (XMR)
    • Zcash (ZEC)
    • Dogecoin (DOGE)

    Calculating the value of crypto payments.

    Cryptocurrency prices can fluctuate wildly, and sometimes the value of a coin can change dramatically in just a few hours. It’s not always stable or predictable.

    Cryptocurrency is volatile—prices for coins can change rapidly, sometimes within minutes of being bought or sold. This makes it difficult to know how much you will receive from a cryptocurrency payment when calculating how much to charge for your goods and services.

    Some wallets do provide a benefit of stabilizing the value at the time of your deposit.

    What are the tax implications for a business that accepts cryptocurrency?

    In general, the IRS treats cryptocurrency as property for federal tax purposes, which means it will be subject to capital gains taxes when you sell or trade it. You must also report any income received, such as when you exchange one cryptocurrency for another or use it to purchase goods and services.

    The IRS gives taxpayers a choice of how they report this income: They can either treat each transaction as a sale that’s subject to capital gains taxes on any increase in value since they acquired the currency (even if the value drops back down later), or they can account for each transaction individually throughout the year by tracking cost basis and adjusting their taxable income accordingly.

    Even if your business has sold all its bitcoin and converted it into US dollars at some point in time during the tax year, you may still have some reporting obligations if this was part of an ongoing trade or business activity.

    Can an LLC have a crypto wallet?

    You can definitely have a crypto wallet and use it as an LLC’s bank account. However, you may need to register with the IRS as a money transmitter if your business receives payments over $10,000 in cryptocurrency. If you’re looking at this as a way for your business to accept payments for goods and services, then using a crypto wallet makes sense because there are no processing fees involved—the only fee is the cost of buying cryptocurrency from an exchange like Coinbase or Gemini (which charges 1% plus 0.25% per transaction), and then selling it back on another exchange when paying for things like rent or supplies.

    This means that if you’re operating under an LLC structure and want your employees (or yourself) paid in cryptocurrency instead of fiat currency, then setting up a wallet could be very helpful given that there won’t be any processing fees associated with transactions outside of buying/selling coins themselves (and even then they’ll still be less than what most banks charge). The best part is that all these transactions are easily done online through exchanges like Coinbase so there isn’t much work involved besides opening up accounts with each one.

    Start accepting cryptocurrencies as a form of payment for your goods and services.

    Fortunately, when it comes to accepting cryptocurrency as payment, there are plenty of options out there that make it easy to do so.

    • Set up a digital wallet: You’ll first need to set up a cryptocurrency wallet (or multiple wallets). Wallets provide the means for you to securely receive and store cryptocurrency. The most popular types of wallets include browser-based web wallets, mobile apps for iOS or Android devices, desktop software like Exodus or Jaxx, hardware devices like Trezor or Ledger Nano S (a small USB device), which allows users to sign transactions without exposing their private keys on an insecure device like their computer or phone.
    • Choose your processor: If you plan on using some sort of third-party processor such as Bitpay or Coinbase Commerce (which connects directly with your online store’s checkout page), then this step isn’t necessary since they will handle everything automatically once connected. However if we want control over our own transactions then we need some kind of gateway plugin which allows us access through our website’s back end code so that we can manually send out payments ourselves instead of relying solely on third parties such as BitPay who charge hefty fees per transaction depending how much money is being processed at once (such as $0-$100) whereas Bitcoin Core Wallet only requires 5 cents per transaction regardless how much money being processed at once.
    • Find a digital payments gateway: You’ll need a payment gateway whose API allows for integration on your e-commerce platform (e.g., Shopify, WooCommerce). The best ones will allow you to manage online payments with full control over which types of cryptocurrency you want to accept as well as traditional methods of payment.

    One of the best benefits of accepting crypto is the impact it has on chargebacks for your business. Because crypto transactions are saved on a digital ledger on the blockchain, there’s no denying who purchased what and when.

    Speak with our team of crypto payment processing experts.

    Cryptocurrencies are becoming more and more popular, and there’s no denying that they have a lot of potential to revolutionize the way we use money. As the world becomes more connected through technology, it’s important for businesses to keep up by embracing new methods of payment such as cryptocurrency.

    Our team here at DirectPayNet understand the need, the value, and the potential accepting crypto has for your business. Get in touch with us now to connect with a crypto payment processor and prep your business for the future of commerce.

  • Payment Gateway vs Payment Processor Explained

    Payment Gateway vs Payment Processor Explained

    If you’re a small business owner, chances are you’ve heard about payment processors and payment gateways. They sound similar and they both allow your customers to pay for products or services online.

    But what’s the difference between them? And which one do you need? We answer all your payment questions below.

    What is a payment processor?

    A payment processor is a company that provides payment solutions for businesses. It will help you accept credit cards online and manage your transactions.

    Payment processors can be third-party companies or a part of a merchant account. They provide the technology and infrastructure that allows your business to accept payments online, as well as manage them. Payment processors are often used in conjunction with payment gateways, which we’ll explain below.

    A payment processor may also offer other services such as:

    • PCI compliance (to make sure your business is safe from hackers)
    • Payment gateway integration (so customers can pay with any method you accept, not just credit cards)
    • Fraud protection

    What is a payment gateway?

    A payment gateway is a software that you install on your website to connect it to your merchant account. Merchants can use this software to accept payments from customers’ issuing bank and receive funds from customers, as well as transfer money directly into their acquiring bank accounts.

    Payment gateways are essential to any eCommerce business. They allow you to accept different payment methods, including credit cards and alternative forms of payment like PayPal or Bitcoin. A payment gateway can also help you meet the standards for PCI compliance, which protects your customers from hackers.

    The payment gateway is what your customers see at checkout. It’s the final page(s) asking for credit card information, address, CVV, shipping address, and other cardholder authentication info. It’s also what’s connected to a POS terminal (point of sale terminal; virtual terminal) or credit card reader to accept credit card transactions, debit card transactions, and digital wallet payments.

    As a merchant, you can log into your online store’s gateway and view transaction data, namely decline codes. This allows you to better understand trends in declined transactions and information about your customers to better serve them.

    What is the difference between a payment processor and a payment gateway?

    A payment gateway works to grant you the ability to accept payments from a customer’s bank. A payment processor is the service that processes the financial transactions and removes them from your account.

    So, in more concrete terms: A payment gateway is the tool that lets you accept payments from customers using their credit cards. A payment processor is an intermediary between your business and banks, which helps merchants process these transactions.

    Working with the two, you can adjust functionality according to your business needs. For example, you can disable certain credit card networks or card types to avoid high transaction fees. You could, for instance, disable American Express and Visa while only accepting Mastercard.

    Is Stripe a payment gateway or processor?

    Stripe is a payment aggregator. It’s a tool that allows merchants to accept credit cards through their websites and mobile apps. Unlike many other payment processors, Stripe is not directly involved in processing transactions. Instead, it partners with banks to facilitate payments between them and its customers.

    This also means that Stripe does not provide its merchants with their own merchant account. Those who sign up with Stripe use a sub-merchant account, instead, which doesn’t require an immediate underwriting process. Hence why it’s so quick and easy to sign up.

    The drawback is that by using Stripe, you may be unaware of what businesses the company supports. In fact, they support a very limited number of businesses due to the Merchant Category Code (MCC) which essentially determines who is a high-risk merchant and who isn’t. Most online businesses are high-risk and Stripe is not afraid to shut them down.

    Is PayPal a payment gateway or processor?

    PayPal is a payment gateway provider that offers a wide range of services to merchants. It can be used as an online payment processor, but like Stripe it is known as a payments aggregator, and is often mistaken for a merchant account provider.

    PayPal does not provide merchant accounts when signing up, but it does connect you with third party providers who do offer the ability to accept credit cards through your website or mobile app. The company’s platform will also allow you to accept payments from customers who have already stored their payment information on file with PayPal (if they’ve used the service before).

    Is Shopify Payments a gateway or processor?

    Shopify Payments is a gateway, not a merchant account. This means that when you sign up with Shopify Payments, your business will be able to accept online credit card payments through its platform.

    It provides an API for third-party applications to use when processing payments. Shopify handles all the necessary validation on your website, but it doesn’t store any sensitive data like credit card numbers or passwords. That information is directly sent to whichever payment processor Shopify uses with your business. They have connections with multiple processors, which is why it’s called an aggregator. So it’s difficult to say exactly which processor your transactions are going through.

    Shopify Payments is actually just Stripe, but relabeled to fit into the Shopify ecosystem.

    And just because you might run your business through Shopify, you are not required to used Shopify Payments. You could even use the regular Stripe, PayPal, or another (better) payment processor.

    What is the difference between a merchant account and a processor?

    A merchant account is the bank account that the merchant uses to accept credit card payments. This can be a business checking or savings account, or an online payment solution like PayPal.

    The processor is the company that accepts payments on behalf of your business and forwards them to your merchant account. The processor will forward all of the funds from customer credit cards through their accounts before transferring those funds into yours—which means they are essentially acting as a middleman between you and your customers.

    A merchant account is what enables the entire payments ecosystem. Your processor and gateway take care of the rest, but are still essential for accepting online transactions.

    At the end of the month, your merchant account or merchant services provider will send you a statement containing all the payment data and transaction details for the previous month.

    You need both a payment gateway and processor to accept payments. And you need a merchant account to use both.

    A payment gateway is the service that connects your store to your merchant bank account. You can think of it as the “gate” where money comes in. A payment processor is the service that accepts the payment from the customer, or “processor”. The merchant account is your bank account used to accept those funds (your “merchant”).

    You cannot fully use a payment processor or a payment gateway without a merchant account. A merchant account is an essential part of the online payment process, since it allows you to accept payments from customers.

    Stripe, Shopify, PayPal, and other popular 3rd-party PSPs get by without forcing you to open a merchant account because they essentially put your business underneath their own. But once you start making real money, eyes start looking in your direction. And that’s when trouble starts.

    If you’re looking to start accepting online payments then it’s important to understand what they do before making a decision on which one is best for your business. Before you start signing up for the most popular or most common, get in touch with DirectPayNet.

    We will assist you in selecting the right MCC for your business, setting up a real merchant account, and connecting you with a powerful credit card processing company that scales with you. Get in touch today.