3.5

2Checkout Review

  • 11 comments
  • Updated on:
  • Review by: Amad Ebrahimi

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Date Established
2000
Location
Columbus, OH

Overview:

2Checkout (2CO) is an international third-party payment processor that, at its most basic level, allows money to be transferred from a buyer to you after a purchase is completed. Like its main competitor PayPal, 2CO is the name buyers will see if they check transactions on their credit card bill. The PCI-compliant company offers several features, including recurring billing and custom checkout.

If you’re a business that brings in a few thousand dollars per month or less, you’ll probably earn a higher discount rate from 2CO than what’s offered by standard merchant accounts. Another perk of using a third-party processor like 2CO is that you’re not held responsible for fraudulent or disputed charges, although you will have to pay a fee to 2CO for transaction disputes.

After you fill out an application with 2CO it will be reviewed by underwriters before gaining approval, just like when you apply for a personal credit card. Once you’re ready to use 2CO, you’ll either use 2CO’s “Plug and Play” shopping cart software or integrate the processor into your existing cart. When customers place orders on your site, they will be redirected to 2CO to complete transactions. That’s one downside of working with some third-party processors like 2CO: Buyers will have to leave your store to finish their purchase, which could theoretically lead to lost sales.

There are several positive and negative facts to consider when working with 2CO. Withheld funds and frozen accounts are a main complaint of 2CO users. Still, with more than 50,000 vendors 2CO remains a real alternative to competitors like PayPal. Read on to get a better grasp of the processor and see if it’s the right fit for your business.

Products and Services:

2Checkout offers several helpful features, including a handy app, integration with tablets and smartphones, recurrent billing, direct checkout, and the ability to accept 26 currencies in 15 languages. The dashboard includes sales history and trends and the option to grant various amounts of access to different users. 2CO is PCI Level 1 compliant and all transactions undergo a fraud review within 24 hours of completion.

2CO offers two main payment solutions for businesses:

  • Dynamic Checkout.
  • Direct Checkout.

Customers won’t have to sign up for a 2CO account to complete a sale but can quickly make purchases using debit or credit cards with either plan. While both services allow your business to complete transactions by redirecting customers to the 2CO site, there are some differences.

Dynamic Checkout:

  • Automatically displays checkout optimized for customer’s device format (i.e. laptop, tablet, smartphone.)
  • Marketed to sellers just starting out or with a smaller number of product offerings.
  • Payments can be customized and localized.

Direct Checkout:

  • Format gives customers the impression they’re still on your site.
  • Includes overlay payment form.
  • Cuts down on the number of fields that must be completed to finish a transaction.

In my opinion, unless it’s really important for your site to remain visible in the background while customers complete purchases and you’re a small to mid-range store Dynamic Checkout is a solid pick.

Fees and Rates:

2Checkout charges no statement, recurrent billing, cancellation, or other monthly fees. Although at one time merchants were required to pay a $49 setup fee, 2CO now advertises that it charges nothing to set up accounts. Service commitments are month-to-month. You can view the full fee schedule including chargeback rates here.

You will come across a few extras costs as a 2CO customer, including a $10.99 set-up fee. Depending on your account, chargebacks will range from $20 to $50 for disputed transactions processed using U.S. dollars and $25 to $65 for disputed transactions processed using non-U.S. dollars. Also, each account’s reserve for chargebacks begins at 5% of your gross sales per pay period–that amount is held for 90 days before it’s released.

2CO keeps rates simple across the board, taking a flat 2.9% and $0.30 for each processed transaction regardless of how much you process. Although new accounts qualify for the 2.9% rate, 2CO charges significantly more per transaction (5.5% and $0.45) for accounts it considers high-risk, if, as the website states, “the Products or business practices of a Sub-Merchant create a potential or actual financial or reputational risk to 2CO, such as the sale of Restricted Products or high chargeback percentages.” International sellers pay 5.5% and $0.45 per transaction. International sales may cost an extra 1% per transaction.

Contract Length and Cancellation Fee:

2Checkout’s payment solutions are contract-free and are offered on a month-to-month basis.

Sales and Advertising Transparency:

2Checkout offers merchants plenty of ways to garner information and encourages social media interaction but doesn’t appear to use gimmicky marketing tactics. Pricing is straightforward and advertising is standard and mostly limited to the web. 2CO attracts new customers either via their site or referrals, and I found no evidence of an old-school sales force making cold calls to potential customers.

Customer Service and Support:

2Checkout offers several ways to reach its customer service, including:

Unfortunately, no weekend phone support is offered. Developers can access documentation, care integration instructions, and more here. You can also reach out on 2CO’s Facebook and Twitter pages.

Negative Reviews and Complaints:

Merchants report a broad range of complaints about 2Checkout, with most centering around product and service issues. A member of the BBB for more than a decade, the business maintains an A+ rating. Of the 65 complaints issued in the past three years, 54 have been resolved. You can read more details here. While Merchant Maverick is dedicated to completing exhaustive online searches for complaints, we weren’t able to read all of the issues users reported online. With that in mind, we were able to cull several common 2CO negatives, including:

  • Account Termination –  2CO appears to closely monitor accounts, with users reporting account closure with no notice. If your business could be considered high-risk you might want to choose a processor such as Durango Merchant Services. Read more about how to avoid freezes, fees and the termination of accounts here. You can also check out 2CO’s prohibited products list for more info.
  • Withheld Funds – Merchants report dissatisfaction with 2CO’s policy to hold funds 90 days after accounts are terminated.

Positive Reviews and Testimonials:

There are also positive 2Checkout comments out there to balance out the negative feedback. While many merchants report spotty customer service, others are satisfied. Common positive interactions with 2CO include:

  • Convenient Checkout – The one-page checkout setup is fairly straightforward.
  • Widely Accepted – 2CO works with eight payment methods and can accept foreign currency in 15 languages and more than 20 currencies.
  • Easy To Use – Merchants report that 2CO is quick to setup and operate.

Integrations and Add-Ons:

2Checkout supports more than 50 third-party shopping carts. Click here to view a full list. It can be integrated with various add-ons, including online booking service Checkfront, classified software Listbingo, and FreshBooks cloud-based accounting software.

Final Verdict:

Like other third-party processors, 2Checkout is more likely to take on sellers with less than flawless credit scores and is better at dealing with risk than merchant accounts. As mentioned above, the company also deals with fraud for you, which is a big perk.

If you choose to work with 2CO, it’s a good idea to take time to familiarize yourself with the processor’s procedures and fee structure so you’re one step ahead of the game. 2CO offers plenty of features and is compatible with virtually all shopping carts.

If possible, apply for a traditional merchant account as well as a third-party processor like 2CO. That way you’ll have access to funds in case there’s ever a problem with either resource. Whether or not the commission you earn after paying 2CO fees makes sense with your bottom line is important to consider. I like that 2CO has a broad reach and integrates well with mobile devices. However, its wide assortment of merchant complaints would make me take pause.

Amad Ebrahimi
Amad has worked in the eCommerce and online marketing world since 2002. He started as an eBay seller, then slowly graduated to building & marketing his own websites and consulting others to do the same. He founded Merchant Maverick out of frustration with all the misinformation and shady tactics that he encountered when trying to find a merchant account for his and his client's businesses. He's the man behind most of the merchant account reviews, and articles posted on MerchantMaverick.com. Have any questions related to credit card processing? Talk to him.
Amad Ebrahimi
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11 Comments

    Anne

    Hi – I’m posting on behalf of 2Checkout. I am in the Marketing Department here. I ran across this post and just wanted to make sure it’s up to date. Our pricing has changed. For US sellers we are now 2.9% + 30¢ per transaction. International sellers remain at the 5.5% + 45¢ per transaction.
    If you have any questions don’t hesitate to reach out. https://www.2checkout.com/contact/

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    Amad E.

    Thanks for the heads up Anne. We’ve made the adjustment.

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    S. V. Than

    The charge posted by 2Checkout.com appears as “Internet Services” – Hong Kong in the credit card statements of customers.

    This is an amazingly foolish step of 2Checkout.com and is leading to high amount of chargebacks across its customer base.

    As I said, it is a stupid step by a credit card processor which will lead to greater customers and sellers dissatisfaction.

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    Joseph Thomas

    I agree that the chargebacks have increased as they have shifted their processing to Hong Kong.

    Seriously, which customer would not dispute a charge billed in Hong Kong especially when 2Checkout.com mentions itself as a US company.

    May be they will move to Vietnam and Pakistan next for processing the charges.

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    Michael

    2checkout is one of the worst if not the worst merchant in my opinion.
    after doing two years of business they decided all of a sudden that my site have a high fraud ration (which was never above 4%) and decided to shut down my account of new site which i just started on 5 days notice (which was really small time and not enough to get another merchant without losing credit card paying customers),

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    Alexander

    2checkout now request 500/usd montly sales and prove of that sales(scanned bill).
    they not read my email saiing it is new site, they just not care about.
    Be aware about that

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    AK

    Be aware before you signup with them if you have serious recurring business. I have been loyal 2checkout client for many years until they started experience when they first lost their mastercard processing and then in 2013 visa was giving them hard time. When mastercard processing was lost, my revenue dropped almost 50% and when they started to have problems with Visa, they cleaned up their member base buy getting rid of what they called risky accounts. Thousands of vendors were affected including my business. One chargeback in 4 year history, few refunds account is gone with 400 active recurring memberships worth thousands and thousands of recurring business is all gone.

    Reason given, they claimed there were too many people tried to pay with stolen cards. How is this my problem or how can I control that, isn’t it their job? They are third party processor with high processing fees which suppose take care of this.

    The best thing, once they told me that they are closing my account they gave me 10 days to find new processor.

    Be careful guys.

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    Donnie

    2co.com / 2checkout.com service is the worst of the industry. Their payment proccessing takes way to long, their fraud prevention is a joke, and their customer service…. well there is NO customer service!! Sent in a ticket over 4 days ago, and not a response via email or ticket… Will NEVER use again!! having to wait 5 days (at least that’s what seller states) for 2 refunds totaling over $600 that’s not back in my bank account yet!!

    Rating11111
    Yardy

    Do you guys know from which bank 2C0 do wires to its customers?

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    Sara Billups

    Hi Yardy, thanks for checking in. At the moment we do not know, but if an answer comes up in our research we’ll pass the info along.

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    Really?

    @ Sara,
    Really??? Have you done your research on 2CO before writing this review? Simply write “2CO chargeback” in google and sit back and read hundred of stories.

    You said: “Like other third-party processors, 2Checkout is more likely to take on sellers with less than flawless credit scores and is better at dealing with risk than merchant accounts. As mentioned above, the company also deals with fraud for you, which is a big perk.”

    A Perk? FGS. They have no protection what so ever for seller or buyer.

    Let me add my story of being victimized by 2CO. I am the seller. 2CO is the heaven for people who intend to fraud. Why? Hear me out.
    I am in the business to establish good earning wordpress blogs and then sell them. I became the part of 2CO and that was my bad day. One person bought one of my site and told me that he will pay only on 2CO. He paid for the site and i handed over him all the details of website like files, hosting, passwords, domain etc.
    Once everything is handed over to him, after one week, i got an email from 2CO that they have made the chargeback. They also put the chargeback fee on my account. They blocked my account as my account went in negative after chargeback. They said if i want to challange then they will charge $15 more for that.
    They gave me reason that, the transaction was made using the credit card illegally. Means the card was actually hacked and then payment was made. Now i am in a state where i lost my money, and my asset which was my website.
    If you consider Google, Godaddy, Paypal, escrow, they act as bridge between buyer and seller, and confirms if there is any dispute. Here, they refund all the amount because they have mentioned it on their terms and conditions. No support whatsoever for the seller here.
    Now if you want to make a fraud. Ask your seller to come to 2CO, pay him there, get the product, and then ask your credit card company for chargeback giving the reason, that those transaction was false and you didnt made that transaction. So according to 2CO will refund automatically.
    But on the other side i found dozen of examples, where the buyer are complaining that they didnt get the proper product and asking for refund, but 2CO is telling them that they cannot refund.
    Who knows if they really refund the amount? Who knows if the refund is actually asked? After research i also found dozen of examples where people got the same email that they chargeback the amount because of illegale use of credit card.
    Now if the hacked card is used then whose job is this to check that? As seller, i know that someone wants to buy my product for the amount i want. If that person is buying by robbering even a bank, what wrong i done?
    They have few clauses mentioning in “Intenational seller agreement” nad based on those clauses, they simply dont protect, either seller or buyer. But at the same time they say that they have a department which checks and control frauds.
    Interestingly they give a reply, that they cannot protect every transaction. Now if you do your research you will find out hundred of complaints. Even there are groups who are planning to submit a petition against them as they believed that 2CO is actually involved in fraud.
    Simply stay away from 2CO. Do your research first. e.g. check few of the links like:
    http://www.complaintsboard.com/complaints/2cocom-c20818.html
    Fraud: http://www.minibb.com/forums/other-1/from-history-of-minibb-fraud-gabriel-candiani-5731.html
    http://www.sitepoint.com/forums/showthread.php?231092-Urgent!-2Checkout-Suspends-Account-amp-Demands-128
    http://www.webhostingtalk.com/showthread.php?t=387697

    Be Safe….

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