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The best and the worst payment processors

By Ben Harar
Version 1.1, Fredrikstad, 9. July 2010

This page is straightforward. It compares as many Internet payment processors as I were able to gather information upon.

This page is also different. While there are other sites that list and rank payment processors, I actually tested myself those about which I provide information. Other, similar pages are designed to collect affiliate payments by directing readers to those payment processors that pay the best commissions. I am not after affiliate commissions. If I expect an advantage from this page, than it is only this: that payment processors think twice before playing games with me.

I started this page rather out of necessity, and not as a hobby. I primarily write about sexual topics, which I consider more interesting than about financial topics.

However, as a writer who now publishes exclusively on the Internet, and who lives of site subscriber payments, I learned the painful way that I have to dedicate some time to choosing payment processors. The point is: At the time I started this site, I was burned several times making the wrong choices. The primary wrong choices were e-Gold, Ginix, and PaySystems. Additional poor choices were PayPal and Valis. With e-Gold and Ginix, I lost thousands of dollars. PaySystems is still holding thousands of dollars from us, and it is so far unresolved how much of the money will actually make it to one of our bank accounts (I will report on the progress as the case develops).

So, I now forced myself to check out more closely those payment processors that are on the market. Having been burned, I have my own criteria on ranking them. My primary concern is not how much commission a payment processor charges. My primary concern is how trustworthy a payment processor appears to be.

Ever since Ginix helped themselves with thousands of my dollars, and I had a hard time finding out who they were (the aboutus page was taken down once they stopped paying customers), I look, for example, who is responsible at a company. Proper style is to publish a list of the main officers of a company, and to put up a photo of each of them. Unless a payment processor is a division of a bank (as WorldPay is of the Bank of Scotland), I have little confidence into an institution that keeps its officers secret.

Please note that this site is a project in progress. I work on it as I gather information, and as I have time to write down the experience I made with each of those covered in the list below.

I am available to answer additional questions by email for those who place a link to Payment-processor-ranking.com on their own site, though my answers are likely not to be lengthy, as I do have a lot of other projects (mostly sexuality related). I also publish comments of other clients of payment processors in a special member section (free of charge). For access, please request a user name and password from:

Rating scale: 1 to 10 (1 is best, 10 is worst)

WorldPay (Rated 1)

WorldPay (www.worldpay.com) is currently the payment processor I rank highest. As mentioned above, they are owned and operated by the Bank of Scotland, and I assume that (1) a bank is properly regulated in a EU country, and (2) that they have too much of a reputation to lose to play dirty tricks with mass market customers. I have always received professionally written and timely polite replies whenever I submitted a question by email. If you can get an account with WorldPay, this is a good option. However, for the residents of some countries, they will not accept accounts; obviously, this is a move to reduce the likelihood of fraud. They accept customers from industrialized, rich countries.

MyVirtualCard (Rated 3, tendency upwards)

I am currently running an account with MyVirtualCard (www.myvirtualcard.com) and so far have received the money they collected on my behalf from subscribers. One problem I have with them is that they seemingly cannot differentiate between products with the same price. I run lifestyle consultation sites, and the membership fees for different packages is 150 US dollars each. MyVirtualCard is not capable of informing me (neither by email nor through the online account administration panel what package a client has purchased, and I have to request this info by email from the member.

MyVirtualCard consider their fraud prevention system as their strongest feature. However, their fraud prevention measures causes a considerable number of intended purchases with good credit cards to be declined. I know this because I have been repeatedly contacted by buyers who requested that they can make a direct remittance to my bank account, or send money by PayPal because they were not able to purchase their memberships through MyVirtualCard.

2Checkout (Rated 3)

2Checkout (www.2checkout.com) is a mass market payment processor that accepts customers from all over the world. They charge a signup fee of about 50 US dollars and they burden the client to determine whether a site is acceptable to 2Checkout as specified in their terms. They then immediately accept the account, but review it later. If the site violates the terms under which sites are acceptable, the account will be closed, and, as far as I understand it, no refund of the application fee will be made. I guess this is a smart setting, as it may keep out a good number of adult sites, as well as sites that sell illegal merchandise (such as pirated software).

CCNow (Rated 3)

I have used CCNow (www.ccnow.com) for a number of years, even though their discount rate is high (11 percent). And that isn’t even the only oddity. Worse, still, is the fact that of the money I earn with them during a month, they will only pay a maximum of 2000 dollars directly. The rest, one gets only after several months. So why am I still using them? Well, for one thing, they haven’t gone out of business during all the years. And though their payment schedule doesn’t sound pretty, they at least kept to it (which is in sharp contrast to the international Ginix and PaySystems, another two payment processors with which I had accounts. And there is another reason why I have stayed with CCNow. I have noticed that more orders passed their fraud review than passed PaySystems or 2Checkout. Thus, CCNow is suitable to materialize those sales that would not pass other payment processors. In order to discourage use of CCNow in cases when other payment processors function, one can impose a slightly higher handling charge.

IBill (Rated 4)

iBill (www.ibill.com) is the payment processor that takes all kinds of regulations more serious than any other payment processor I know. For example, for a site of mine that contains essays on sexual topics (www.Asiatour.com), they requested that I provide a statement that all models are at least 18 years of age, and that I give an address where corresponding records (passports, birth certificates) be kept, and name a "custodian of records". The oddity in this case: there are no photos on the site, and thus no models. Not only on that site of mine. I am not into pornography, and have never published a single pornographic photo. My tool are words. Only words. And only the travel guides which I wrote some 20 years ago contain photos.

But it’s not only this, what justifies a downward trend in the rating of iBill.com. When, after weeks of formalities, I finally was accepted and tried to set up payment processing with them, I got an automated mail telling me that the maximum amount I could charge is 100 US dollars. Well, memberships on www.Asiatour.com cost 150, 175, or 250 US dollars, as they include qualified personal consultation with me. When I wrote this to a certain Kevin at iBill, I received a single-line reply: that they cannot accept email consultation anyway. If Kevin wouldn’t just have pretended that they look at sites that apply with iBill, but would actually look at it, he could have saved me a lot of work. If your product is cheap porn, or penis enlargement, iBill may accept you. But do you really want to be with a payment processor who specializes in that area? My experience with so-called high-risk payment processors is that when they do run into legal trouble, porn sites just as traders of high quality products equally pay the bill.

VolPay (Rating: 6)

I was never able to test VolPay (www.volpay.com), even though I tried. I filled out their online application form, and the next day I received an email from one of their employees or agents, telling me that they only process for those above a monthly limit of 40,000. I wasn’t able to find out whether that is 40,000 dollars, or 40,000 euros, or 40,000 pounds, as the person who answered my mail was fond of using special characters that don’t transmit to a Yahoo mail account. Anyway, they should publish a note on their application form that they only process with a monthly minimum of 40,000 (whatever the currency). Instead, they fool the majority of those who want to apply by letting them fill in the application form, and waste their time. Instead of clearly stating that they do not process below a monthly limit of 40,000, they advertise the following on their site: "All business types accepted. 99.9% approval rate"

I am sure that most people who apply cannot guarantee a monthly processing turnover of at least 40,000. So, in terms of honesty, I wonder how to classify their "99.9% approval rate" promise?

But that’s not the only matter which doesn’t seem in proper order with Volpay. Search www.webhostingtalk.com for Volpay, and see some of the postings.

PaySystems (open rating)

They still owe me some 10,000 dollars (accounts ……), and I have decided to wait whether I receive my money before writing about them. Their CEO is Michael Fayer, whose hobby is participation in formula car racing. You can see photos of him at the following locations:

The following is a photo of his race car:

The following site explains that his race car is sponsored by PaySystems:

Ginix (Rating 10)

This is one of the worst payment processors I ever worked with. They collected more 10,000 US dollars from Serge Kreutz site members, as well as for some other transactions I have been involved with, and then, after more than half a year, paid me some 2,000 dollars (18 cents on the dollar). Their US business is meanwhile out of business, though they still run a site in Japan. I guess they can do this because most Japanese don’t read English Internet sites.

I want to describe a bit how the Ginix executives, and probably some of their staff, got away with probably millions of dollars which clients of website owners have paid, using Ginix as payment processor, because it provides a role model on how other payment processors can go out of business with millions of dollars of their customers money without having to worry whether they will have to justify their actions before a judge. Because this is so easily done, the only safeguard against being cheated by payment processors is the personal integrity and honesty of the owner and CEO of a payment-processing company.

It works like this: a payment processor needs a bank to clear credit card payments. Cleared payments are then paid into the account of the payment processor, and the payment processor then computes the payout to its clients. Ginix worked with the Manufacturer’s Bank, which is a branch of the Japanese S…. Bank, in which, ultimately, the Bank of America, has considerable control. It is likely that the Ginix scheme would not have been accepted by the Bank of America itself.

The risk for a bank and, theoretically, a payment processor in accepting credit card payments lies in the fact that a client who makes a credit card purchase can file for a chargeback with the credit card company, and within half year, receive his money back. This is called a chargeback. In practice, credit card companies have no interest in investigating whether a chargeback in a particular case has been justified or not. They just burden the their customer (the bank working with the payment processor) with the reversal, plus a fine, and the bank burdens the payment processor, plus a double fine, and the payment processor burdens the merchant, typically with a further increased fine.

Now, if a bank fears, because of the business model of the payment processor, that they may be flooded with chargebacks, they just stop remitting money to the payment processor, who then, in return, stop paying the merchant. However, the bank can hold the funds only for 6 months after the last transaction, and will then remit to the payment processor, minus the deductions for chargebacks.

A payment processor who’s funds have been frozen by the bank has no chance to stay in business. However, in the next half year, a payment has plenty of opportunities to play tricks, so that of the money they will receive from the bank, they will have to pay only as small a percentage as possible to the customers.

For example, instead of going into insolvency right away (which would guarantee that a large percentage of the money held by the bank will be divided among merchants), they can continue to accumulate expenses. If the company formally stays in business, the company CEO can still use a company luxury vehicle for his private use. Or, even more blatant, when the company owner and CEO is one person, or when they are good friends, they can continue to pay themselves huge salaries, even though there is no work.

My experience suggests that the personal integrity and honesty of the company owner and CEO are really the only safeguard against getting burned. Therefore, when deciding for or against any payment processor, take a look at their About us page. Does it name the people involved? And, even better, do they publish pictures of their owners and executives?

I have the names of several executives of Ginix: Vice president Ariu Levi, ….., One name that has been kept in the background from the beginning has been the name of their kingpin, a Japanese in America.

I have my own methods of dealing with people who don’t pay to me the money they collected in my behalf. No, I have no contacts to the mafia, so they don’t have to be afraid of being shot dead in a dark alley, or being dumped alive with a concrete weight from a boat. My only weapon is to talk, and to make public the character of those who channel my money into their own pockets.

And like a movie, or real-time, FBI agent, I am open to deals. For example, lesser participants in the Ginix scheme can provide information about their bosses, and thereby clear their name from this and other files which I maintain on scammers.