PayPal is an aggregator. They pile all of their merchants into one merchant account.
When you choose to process with your bank or an independent merchant services provider, you get your own merchant account with a unique merchant identification number, i.e. MID#. This merchant account is in actuality a bank account. You are required to apply for the account. You will be asked to provide your social security number or federal tax ID number. Your credit will be checked.
How does having your own merchant account compare to having a PayPal account when you have a chargeback?
The card issuing bank protects the cardholder to whom it has issued credit. Typically the cardholder has 6 months to request a chargeback from a merchant. When a cardholder requests a chargeback from its issuer, the amount of the chargeback is immediately taken out of the merchant’s bank account, whether you are processing with PayPal or your own merchant account with a merchant services provider. When you have your own merchant account, you will be notified of a chargeback and have the opportunity to refute it. If you can prove that you had a legitimate sale with your customer, then the money gets put back into your merchant account. Proof involves copies of invoices along with the name, address, and phone number of the card holder, so the transaction can be researched. Signatures on a credit card sales receipt, signatures on a contract for an ecommerce sale and/or signatures on delivery receipts also provide proof of sale.
PayPal does not work with their merchants on reversing chargebacks. They do not go to bat for you.
You simply lose your money, period.
Merchant services providers have a customer support phone number for chargebacks. Electronic Money Company does as well, but we also go above and beyond by providing consulting to you. It sure helps to have someone interpret the geek, provide an explanation of why certain documents are required for proof and also guide you, as a merchant, on how to prevent chargebacks in the future.
In other words, Electronic Money Company does go to bat for you!
If you are having challenges with chargebacks with PayPal, Square, or another merchant services provider, please give us a call at 505-296-2847. We are happy to give you guidance even if you are not our client.
We recently got this text from our client, Tam, who had a chargeback issue the Friday before Christmas this year at 4.45 PM! I answered my phone while preparing for a holiday party for our staff. Next Tam called the office and talked to the super wonderful, Carolyn at our office, who had forwarded the phone to her cell on her way to our festivities.
“Hi guys, ok……I’m feeling better….I’m over the shock. I am so thankful for you all. Who has a processor that gets called on a Friday afternoon on their way to a Christmas party? Who answers the phone while cooking the party food? You guys do and that, to me, is priceless!!”
Thank you ❤️❤️❤️, Tam Chavez, Tour New Mexico