Comparative Study of Checks vs. Credit Cards for Subscription based merchants

WTS - Ben · 2007-03-07, 12:10 PM

Hello everyone,

Over the last few years, checks have started to take on a more significant role as an Internet payment option. Yet, checks are still widely misunderstood and under-promoted. The following study was done by a large volume Internet company that runs a major Affiliate program. We hope that this will help subscription based merchants make better decisions in payment options.

Obviously, one of the key ingredients to successful affiliate programs is the ability for sponsors to accurately forecast the gross revenue created by each sign-up that is sent by it's advertisers. Balancing this against the race to offer higher payouts in order to gain traffic and affiliate market share is a tricky proposition.

Recently, one of our clients did an in-depth analysis of their credit card and check sign-ups. What they found is that they make almost twice as much per check sign-up as they do with credit cards. As a result, they came to us wanting advice on how they can make checks play a larger role in their sign-ups.

But, before we discuss what can be done to increase check sign-ups let's clear up a few of the misunderstandings that exist about checks as a payment method.

1) Checks take away from credit card sign-ups. This is not really true. Certainly, there are some instances where a credit card holder may opt for using a check, but this is the exception. Moreover, this is a very good thing when it does happen as is explained below.

2) There is a problem with returned checks. This is true. Unlike credit cards, there is a limited way in which account information can be verified. However, WTS has developed proprietary systems that result in the lowest Check Return percentages in the industry!

The additional revenues generated by the 75+ million Americans that do not have credit cards far outweighs any cost associated with returned checks. Remember, WTS does not charge for returned checks in our managed ACH program, so you are only dealing with access issues.

3) Checks convert better and have better retention. This is true. Checks convert from trial better and have a longer retention rate than credit cards. More importantly is the following

A) The time in which a consumer can initiate a dispute is limited to 60 days after it posts to a bank statement. As you know, credit card charge-backs often encompass 1 years worth of charges. Since non face-to-face transactions carry this risk, it is important for merchants to understand this.

B) Risk models show that credit card transactions that recur for longer than a certain amount of time become high risk and are sometimes cancelled to limit risk exposure. Not so with Checks! Checking accounts are also not changed often versus the inevitability of expiration dates on credit cards.

C) Checks are cheaper to process than credit cards. Under our managed ACH program, there are no fees for checks that are not collected. There are no charge-back fees, return fees or credit fees. All this equals a cheaper cost of processing with less risk for the merchant and affiliate program operator.

So, how can merchants and affiliate programs capitalize on check processing? Here are some of the basics:

1) Make sure that you give equal exposure to checks as a payment option. In fact, quite a few merchants made it the primary payment option and have been quite happy with the results!

2) Always direct declined credit card transactions to the check option. Track traffic by country if possible to send foreign traffic to appropriate payment methods.

3) Consider discounting check trials or offering free check trials to garner a larger share of check sign-ups.

4) Make sure you take advantage of WTS' Data Dump (FTP/SFTP) service to account for settled and returned checks so you only pay out on settled check funds.

5) Take advantage of our cross-sell, up-sell and loyalty programs to increase check sales and improve retention.

We hope this information is helpful and look forward to the opportunity to process your check transactions. Please visit us at ACHdebit.com, or contact me directly to get started. Thank you.

Kind Regards,
Ben Zuckerman

Web Transaction Services
Toll Free: 1(866)735-5987 ext.1168
Fax: 1(512)263-3099
ICQ: 138827832

GonZo · 2007-03-12, 10:51 AM

I got an anon email several months about how a certain processing company was abusing the ACH gateway.

Care to comment on that?

GonZo · 2007-03-14, 03:36 PM

Did you know that even when you use an anon proxy to send an email that it stamps the originators IP address on that email?

Add that to the fact that I own a webmaster resource board that tracks IPs and the knowledge that IP addresses remain static in Ellijay is one dangerous combination.

Still dont want to comment?

GonZo · 2007-03-14, 03:37 PM

Maybe Ill just post the email.

WTS - Ben · 2007-03-14, 03:58 PM

Hi Gonzo,

Can you please drop me an ICQ? 138827832

Thanks,
Ben

GonZo · 2007-03-14, 04:02 PM

Quote:

Originally Posted by WTS - Ben

Hi Gonzo,

Can you please drop me an ICQ? 138827832

Thanks,
Ben

If you think Im kidding Im not.
Im tuning up the band.

http://zombiecreep.vox.com/library/a...fc1b3685e.html

GonZo · 2007-03-14, 11:34 PM

from Tommy Jones <concerned_webmaster@hotmail.com>
Jan 6
to GONZO@gonzo.com
date Jan 6, 2007 12:40 PM

Greenguy · 2007-03-15, 09:58 AM

Piece by piece?

GonZo · 2007-03-15, 10:29 AM

Quote:

Originally Posted by Greenie

Piece by piece?

I guess so. I know if ACH was my core business and there was a threat to it --- Id certainly NOT leave taking care of business to someone like me. And come on... an anon hotmail account from your home PC? Its kind of insulting to think I wouldnt see the originating IP address in the headers.

This rabbit hole runs deep.
Ben I will be happy to discuss this issue here.
I think its important enough for people to know the type of bullshit and manipulation that goes on behind closed doors. So important that Ive chose to address it here instead of Oprano so Im not accused of looking to inflate page views with some kind of fake drama.

Ill be your huckleberry. Heres the footer of the message.

Yours truly,
An anonymous webmaster who would like this to be kept anonymous by allowing
you to expose them on your own. Do not reply to this email. It will not be
checked.

Jim · 2007-03-15, 10:59 AM

I don't really think this thread belongs in the products forum anymore.

GonZo · 2007-03-15, 11:06 AM

Quote:

Originally Posted by Jim

I don't really think this thread belongs in the products forum anymore.

Should I have started a new thread?

terry · 2007-03-15, 11:10 AM

Im confused, what happened here? WTS-Ben is offering a check processing service.. and GonZo received an anonymous email about someone abusing the ACH gateway.. was it Ben that sent the email?

GonZo · 2007-03-15, 11:18 AM

Quote:

Originally Posted by terry

Im confused, what happened here? WTS-Ben is offering a check processing service.. and GonZo received an anonymous email about someone abusing the ACH gateway.. was it Ben that sent the email?

Tommy Jones supposedly sent the email.

Unless Ben changed his name and moved to Ellijay, GA then I cant say that he did.

GonZo · 2007-03-15, 11:23 AM

I thought you might like some direction in showing the webmaster community
exactly how unreliable and risky their service is. Try the following,
screen cap it or do whatever you know how to do to document the process and
expose these guys as the risk that they are to the adult industry and the
merchants who use them.

1. Go to site www.fuckherright.com as an example. Click to Join.

2. Put in a blatantly fake name like Donkey Dick. Enter a zip code. Enter
a bogus email. Select the check option. Submit.

3. Enter any City name. Enter in any Driver’s License # such as 123456789.
Leave other defaults as they are.

4. Highlight terms link and take screen shot showing where the terms point
to.

5. Click on terms to show they use xxxxxx terms even though the site owner
holds themselves out as the merchant account holder. IOW, This site is
using xxxxxx as a gateway. Ron Levy uses xxxxxxx as a 3rd party if you want
to look there as well and duplicate.

6. Go to FDIC.gov and search for ABA and grab a random aba that you find in
search results

7. Put in fake info for every field and whatever ABA you locate (make sure
its small town bank) The ABA needs to be valid. Make up an account number
between 7-11 characters. It will likely not hit an actual account and be
returned as such to xxxxxx. It appears that they do submit this to the ACH
network.

8. Submit transaction and you should be accepted.

9. Login into members area.

Note that they have 2 pre-checked cross sales and that the terms and age
verification box is also pre-checked. It goes without saying, but a free
trial turns into 5 charges. I know I don’t have to tell you what this means
for the future of their ACH processing. I think merchants who use them as
well as the adult community should be aware of the risk they pose to the
industry as well as the risk merchants have in their recurring database by
using these guys.

Good luck and have fun.

Yours truly,
An anonymous webmaster who would like this to be kept anonymous by allowing
you to expose them on your own. Do not reply to this email. It will not be
checked.

Greenguy · 2007-03-15, 11:33 AM

Quote:

Originally Posted by GonZo

Tommy Jones supposedly sent the email...

Didn't he play Two Face in Batman?

GonZo · 2007-03-15, 11:34 AM

Quote:

Originally Posted by Greenie

Didn't he play Two Face in Batman?

I dont imagine hes tossing a coin right now. I dont think they expected me to handle business this way and for sure that I would wait this long. But hey... they thought I couldnt trace route an IP address too!

terry · 2007-03-15, 11:47 AM

Ahhh ok now I understand.

Thanks

2007-03-07, 12:10 PM	#1
WTS - Ben WHO IS FONZY!?! Don't they teach you anything at school? Join Date: Sep 2004 Location: ACHdebit.com Posts: 40	Comparative Study of Checks vs. Credit Cards for Subscription based merchants Hello everyone, Over the last few years, checks have started to take on a more significant role as an Internet payment option. Yet, checks are still widely misunderstood and under-promoted. The following study was done by a large volume Internet company that runs a major Affiliate program. We hope that this will help subscription based merchants make better decisions in payment options. Obviously, one of the key ingredients to successful affiliate programs is the ability for sponsors to accurately forecast the gross revenue created by each sign-up that is sent by it's advertisers. Balancing this against the race to offer higher payouts in order to gain traffic and affiliate market share is a tricky proposition. Recently, one of our clients did an in-depth analysis of their credit card and check sign-ups. What they found is that they make almost twice as much per check sign-up as they do with credit cards. As a result, they came to us wanting advice on how they can make checks play a larger role in their sign-ups. But, before we discuss what can be done to increase check sign-ups let's clear up a few of the misunderstandings that exist about checks as a payment method. 1) Checks take away from credit card sign-ups. This is not really true. Certainly, there are some instances where a credit card holder may opt for using a check, but this is the exception. Moreover, this is a very good thing when it does happen as is explained below. 2) There is a problem with returned checks. This is true. Unlike credit cards, there is a limited way in which account information can be verified. However, WTS has developed proprietary systems that result in the lowest Check Return percentages in the industry! The additional revenues generated by the 75+ million Americans that do not have credit cards far outweighs any cost associated with returned checks. Remember, WTS does not charge for returned checks in our managed ACH program, so you are only dealing with access issues. 3) Checks convert better and have better retention. This is true. Checks convert from trial better and have a longer retention rate than credit cards. More importantly is the following A) The time in which a consumer can initiate a dispute is limited to 60 days after it posts to a bank statement. As you know, credit card charge-backs often encompass 1 years worth of charges. Since non face-to-face transactions carry this risk, it is important for merchants to understand this. B) Risk models show that credit card transactions that recur for longer than a certain amount of time become high risk and are sometimes cancelled to limit risk exposure. Not so with Checks! Checking accounts are also not changed often versus the inevitability of expiration dates on credit cards. C) Checks are cheaper to process than credit cards. Under our managed ACH program, there are no fees for checks that are not collected. There are no charge-back fees, return fees or credit fees. All this equals a cheaper cost of processing with less risk for the merchant and affiliate program operator. So, how can merchants and affiliate programs capitalize on check processing? Here are some of the basics: 1) Make sure that you give equal exposure to checks as a payment option. In fact, quite a few merchants made it the primary payment option and have been quite happy with the results! 2) Always direct declined credit card transactions to the check option. Track traffic by country if possible to send foreign traffic to appropriate payment methods. 3) Consider discounting check trials or offering free check trials to garner a larger share of check sign-ups. 4) Make sure you take advantage of WTS' Data Dump (FTP/SFTP) service to account for settled and returned checks so you only pay out on settled check funds. 5) Take advantage of our cross-sell, up-sell and loyalty programs to increase check sales and improve retention. We hope this information is helpful and look forward to the opportunity to process your check transactions. Please visit us at ACHdebit.com, or contact me directly to get started. Thank you. Kind Regards, Ben Zuckerman Web Transaction Services Toll Free: 1(866)735-5987 ext.1168 Fax: 1(512)263-3099 ICQ: 138827832 __________________ ICQ_138827832

2007-03-14, 03:58 PM	#5
WTS - Ben WHO IS FONZY!?! Don't they teach you anything at school? Join Date: Sep 2004 Location: ACHdebit.com Posts: 40	Hi Gonzo, Can you please drop me an ICQ? 138827832 Thanks, Ben __________________ ICQ_138827832

2007-03-15, 09:58 AM	#8
Greenguy The Original Greenguy (Est'd 1996) & AVN HOF Member - I Crop Pics For Thumbs In My Sleep Join Date: Feb 2003 Location: Blasdell, NY (shithole suburb south of Buffalo) Posts: 41,929	Piece by piece? __________________ Promote POV Porn Cash By Building & Submitting Galleries to the Porn Luv Network

2007-03-15, 11:10 AM	#12
terry You can now put whatever you want in this space :) Join Date: Apr 2004 Location: Montreal Posts: 5,883	Im confused, what happened here? WTS-Ben is offering a check processing service.. and GonZo received an anonymous email about someone abusing the ACH gateway.. was it Ben that sent the email? __________________ Stop That 9 To 5 Go Green Grocery Store

2007-03-15, 11:47 AM	#17
terry You can now put whatever you want in this space :) Join Date: Apr 2004 Location: Montreal Posts: 5,883	Ahhh ok now I understand. Thanks __________________ Stop That 9 To 5 Go Green Grocery Store

2007-03-12, 10:51 AM	#2
GonZo You can now put whatever you want in this space :) Join Date: Apr 2003 Location: Atlanta,Ga Posts: 893	I got an anon email several months about how a certain processing company was abusing the ACH gateway. Care to comment on that?

2007-03-14, 03:36 PM	#3
GonZo You can now put whatever you want in this space :) Join Date: Apr 2003 Location: Atlanta,Ga Posts: 893	Did you know that even when you use an anon proxy to send an email that it stamps the originators IP address on that email? Add that to the fact that I own a webmaster resource board that tracks IPs and the knowledge that IP addresses remain static in Ellijay is one dangerous combination. Still dont want to comment?

2007-03-14, 03:37 PM	#4
GonZo You can now put whatever you want in this space :) Join Date: Apr 2003 Location: Atlanta,Ga Posts: 893	Maybe Ill just post the email.

2007-03-14, 11:34 PM	#7
GonZo You can now put whatever you want in this space :) Join Date: Apr 2003 Location: Atlanta,Ga Posts: 893	from Tommy Jones <concerned_webmaster@hotmail.com> Jan 6 to GONZO@gonzo.com date Jan 6, 2007 12:40 PM

2007-03-15, 10:59 AM	#10
Jim Banned Join Date: Aug 2003 Location: Mohawk, New York Posts: 19,477	I don't really think this thread belongs in the products forum anymore.

2007-03-15, 11:23 AM	#14
GonZo You can now put whatever you want in this space :) Join Date: Apr 2003 Location: Atlanta,Ga Posts: 893	I thought you might like some direction in showing the webmaster community exactly how unreliable and risky their service is. Try the following, screen cap it or do whatever you know how to do to document the process and expose these guys as the risk that they are to the adult industry and the merchants who use them. 1. Go to site www.fuckherright.com as an example. Click to Join. 2. Put in a blatantly fake name like Donkey Dick. Enter a zip code. Enter a bogus email. Select the check option. Submit. 3. Enter any City name. Enter in any Driver’s License # such as 123456789. Leave other defaults as they are. 4. Highlight terms link and take screen shot showing where the terms point to. 5. Click on terms to show they use xxxxxx terms even though the site owner holds themselves out as the merchant account holder. IOW, This site is using xxxxxx as a gateway. Ron Levy uses xxxxxxx as a 3rd party if you want to look there as well and duplicate. 6. Go to FDIC.gov and search for ABA and grab a random aba that you find in search results 7. Put in fake info for every field and whatever ABA you locate (make sure its small town bank) The ABA needs to be valid. Make up an account number between 7-11 characters. It will likely not hit an actual account and be returned as such to xxxxxx. It appears that they do submit this to the ACH network. 8. Submit transaction and you should be accepted. 9. Login into members area. Note that they have 2 pre-checked cross sales and that the terms and age verification box is also pre-checked. It goes without saying, but a free trial turns into 5 charges. I know I don’t have to tell you what this means for the future of their ACH processing. I think merchants who use them as well as the adult community should be aware of the risk they pose to the industry as well as the risk merchants have in their recurring database by using these guys. Good luck and have fun. Yours truly, An anonymous webmaster who would like this to be kept anonymous by allowing you to expose them on your own. Do not reply to this email. It will not be checked.