e-onlinedata serves approximately 18,000 merchants, including countless ISPs and webhosts, with a focus on 'merchant-friendly business practices.'

by Jeff Goldman [January 31, 2007]

Merchant account provider e-onlinedata, founded in 2001, is one of the largest reseller/providers of Authorize.Net's payment gateway services, serving approximately 18,000 merchants. The company's key strength, company president Sloane Bouchever says, lies in its "merchant-friendly business practices."

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That starts with keeping the company's fees as low as possible. "The pricing that we offer to ISPs is extremely competitive," Bouchever says. "It's a qualified Visa/MasterCard rate of 2.1 percent, 20 cents a transaction, and we do not charge the additional five to ten cents for address verification. Of course, we do address verification—we just don't charge for it."

Similarly, there are no monthly minimums for ISPs, no batch header fees, no annual fees, no termination fees—and, Bouchever says, no other hidden fees. "If a merchant decides to cancel their account with us, either because they're going out of business or moving to another processor, we have no fee to terminate the account," he says.

Keeping it clear
The fact that e-onlinedata offers gross daily settlement to its merchants, Bouchever says, is a key differentiator. "Most processors in e-commerce take their 2.1 or 2.2 or 2.3 percent out before they deposit, and some odd number goes into the merchant's checking account each day that a deposit occurs," he says. "Ours is a gross settlement—so when you do a $109.12 transaction, that's what goes into the account. It makes it much easier for the merchant to reconcile their checking account."

Similarly, Bouchever says the company is unusually straightforward about its non-qualified rate, the higher rate that's charged for international sales, corporate purchasing cards, government cards and some rewards cards. "Our qualified rate for ISPs is 2.1 percent, and our non-qualified rate is 3.49 percent," he says.

Bouchever says that's different from most providers, who might take out 2.1 or 2.2 percent at the time of the transaction itself, then later add a 'non-qualified surcharge' of an additional 2.5 percent. "Then the merchants think, 'Heck, my non-qualified rate is 2.5—that's a great rate!'" he says. "Not when it's a surcharge on top of everything that's been taken already."

For the same reason, Bouchever says e-onlinedata's statements put all the rate information in one section where it's easy to find. "We see statements all day long here from merchants who fax their existing statements for competitive bids, and we can't make heads or tails of them—and I've been in the industry for 16 years," he says. "They deliberately make it difficult to read. Our statements are easy to read."

Reseller program
Bouchever says e-onlinedata's original business plan didn't include the idea of doing direct sales to merchants—and so the company's reseller program allows ISPs and other companies to offer merchant account services to their customers. "Right now, we've got about 4,000 contracts with folks like ISPs, webhosts, web developers, etc., who refer business to us," he says.

And Bouchever says the fees are structured so that e-onlinedata never undercuts its resellers—a customer who comes directly to e-onlinedata won't get a better deal than they would by going to a reseller like US-ISP Merchant Services.

That same principle extends to all services that e-onlinedata offers. "We offer nothing that competes with our ISP clients or our webhost clients," Bouchever says. "Our clients come to us as a referral from a technology company such as an ISP, and we would never sell anything like a secure certificate or webhosting or a shopping cart that would interfere with our resellers' ability to do business."

Tied to Authorize.Net
In terms of reporting and integration with ISP billing systems, much of the basic functionality that e-onlinedata offers is universal to all merchant account providers who work with Authorize.Net. Beyond that, e-onlinedata offers additional reporting for $10 a month—but Bouchever says no more than 200 of the company's 18,000 clients ever see a need for those additional reports.

Service and support, Bouchever says, are also tied to Authorize.Net. "We do offer 24/7 customer support, but most of the support that an ISP needs, like any merchant, is technical support—and technical support all comes from Authorize.Net," he says. "But if a merchant needs to know about deposits into their checking account, of course they contact us."

Ultimately, Bouchever says e-onlinedata's strengths in the ISP market come down to a few key points. "We've been pursuing and partnering with ISPs since our very beginning," he says. "We love the ISP business, and we support ISPs with extremely competitive pricing, no setup fees, etc., and through our VAR program, in allowing ISPs to tap into recurring revenue as they offer merchant accounts to their customers."

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