Taking $5,000 per month or less in card payments?
You’ll save with Square
- Date Established
- Columbus, OH
- Predictable flat-rate pricing
- Month-to-month agreement
- Ideal for international merchants
- Excellent website & advertising
- Not suitable for card-present merchants
- Held funds
- Not good for high-risk merchants
Since the early 2000s, 2Checkout (2CO) has served as a third-party payment processor for eCommerce merchants. As the name suggests, 2Checkout allows customers “to check out” and pay when completing an online purchase. 2CO appears similar to Stripe and PayPal, and competes for much of the same marketshare. You may have encountered 2Checkout as a payment processing option within one of the its many partnered shopping cart, invoicing, or booking platforms.
As far as I can tell, the primary advantage to selecting 2Checkout over other competitors has been its availability in additional countries — over 200 markets in all. Global payments tools like this aren’t exactly common, and so when they are available, it’s worth taking note.
In March 2017, an eCommerce platform called Avangate purchased 2Checkout and decided to adopt 2Checkout’s branding going forward. Up until the acquisition, Avangate’s platform was specifically geared toward the sale of digital goods (i.e., software and software subscriptions). To make things simpler, sometime in 2018, Avangate and 2Checkout re-branded and re-launched the service solely as 2Checkout, but now calling itself a “monetization platform” rather than a payment processor or eCommerce software. The Avangate website redirects to the 2CO website, and it appears the two companies are now fully blended into one.
I will say that the new launch and rebranding seems to have both simplified and complicated 2Checkout’s services. On the one hand, the tools available to merchants are fairly clearly spelled out. On the other, calling a payment-related service a “monetization platform” seems a little vague, and doesn’t totally describe the services that 2Checkout offers.
There are several positive and negative factors to consider when working with 2CO. For starters, withheld funds and terminated accounts are the main complaints of 2CO users, which isn’t surprising given that the company is a third-party processor (also called a payment service provider or PSP). Other companies using this business model — PayPal, Stripe, and Square, to name a few, have the exact same complaints levied against them. However, I can’t deny that 2Checkout’s offerings are some of the most sophisticated I’ve seen. If you need a robust yet flexible way to accept card-not-present payments, I can certainly see the allure of a service like 2CO.
I’d like to take a moment here to say that 2Checkout is only able to process card-not-present transactions. These transactions occur online or in-app, or they’re keyed-in transactions. In addition, 2Checkout offers more features than your average online payment processor, which is great if you need recurring billing and an online store builder. However, it also means that 2Checkout is more expensive than more basic options. So, if you just need a basic online processor, or if you need a way to accept card-present transactions, you might consider taking a look a few of our other preferred payment processors.
So, does this “monetization platform” fit your business’s needs? Keep reading to find out.
Table of Contents
Products & Services
You’d think all payment companies would make basic information about their own products and services crystal clear. But you’d be mistaken. The marketing copy on many sites (especially for low-quality, predatory providers that use a massive sales network) is often vague or meaningless, the site is poorly organized, or both.
I’m happy to say 2Checkout’s main product offerings are outlined very clearly. Take my word for it — this is a minor miracle.
2Checkout breaks up their product offerings according to pricing plan. Merchants on higher (read: more expensive) plans will have access to more features. That said, you can always add on more features a-la-cart style via 2Checkout’s add-ons. You’ll need to decide what features you business actually needs before you’ll be able to really evaluate cost. Here is a brief breakdown of the features included in each plan:
(It’s worth noting again that 2CO is for card-not-present purchases only. If you’re hoping to process a lot of card-present transactions, you’ll want to use another processor in addition to or in place of 2CO. Take a look at a few of our recommended providers for card-present transactions.)
- Sell Internationally: Sell in 220+ countries and territories. List your checkout in 29 languages, and accept payment in 100 currencies. Your customers won’t have to sign up for 2CO themselves, but can quickly make purchases using one of the 45 accepted payment methods (including PayPal if they have a PayPal account).
- Integrate With Shopping Carts: 2Checkout has already pre-built integrations with 120 of the most popular software options.
- Checkout Features: Make your checkout page mobile-friendly and customize the look to match your brand. Localized checkout is also available.
All of the features from 2Sell PLUS:
- Recurring Billing: Recurring billing is available globally through nine specific payment methods. Take advantage of 2Checkout’s subscription management tools. Customize your subscription’s billing frequency and determining your pricing model (you can choose from flat-rate, usage-based, and hybrid). Subscription reporting is also included.
- Revenue Recovery Tools: 2Checkout claims to help merchants recover up to 20% of their revenue using their account updater and their retry logic tool.
2Monetize: For Selling Digital Goods ONLY
All of the features from 2Sell PLUS:
- Conversion Rate Optimization Tools & Services: I wasn’t able to find more detailed information about exactly what these tools and services include.
- Cart Abandonment Prevention: These tools typically include cart abandonment reports.
- A/B Testing: See what inspires more purchases.
- Invoice Management: Send invoices to customers.
- Global Taxes: Use 2Checkout to manage VAT and sales tax collection and handling.
- Risk & Fraud Protection: Reduce chargebacks with fraud protection tools.
As I’ve already mentioned, you have the ability to add more features to your chosen plan through add-ons. Some of these add-ons are already included as features of specific plans, and some you can purchase at additional cost. I like how this add-on model lets you customize your features set. On the other hand, I don’t like that prices for add-ons are not listed, making it difficult to determine the overall expense of your custom plan. Here are those add-ons:
- 2Convert: Conversion rate tools. Already included in 2Monetize.
- 2Bill: Subscription management. Already included in 2Subscribe and 2Monetize.
- 2Comply: Tax and VAT handling and compliance tools, compatible with digital products only. Already included in 2Monetize.
- 2Partner: Increased channel distribution and automation. Available only for 2Monetize at additional cost.
- 2Service: For Premium Services and Dedicated Support. Available at additional cost.
In addition, the following features are available to all merchants using 2Checkout:
- Hosted & Inline Checkout: You can choose between 2CO’s hosted cart or their inline cart (or the integrated payments option we discuss below). The hosted cart allows you to offer checkout on 2CO’s servers. This checkout is mobile responsive and customizable. Alternatively, you can use 2CO’s inline cart to offer checkout on your own site. Customers will not be redirected to checkout. 2CO recommends the inline cart for merchants with a smaller product catalog.
- Payment API: 2CO has now added a third option for checkout: directly integrated payments. This solution gives you the most control over the payment process and is the most streamlined for your customer. Buyers place sales directly on your website without the need for redirection to a hosted payment page. Card data is tokenized, and you submit the charge from your own server via the 2Checkout API.
- Reports: View executive, financial, and marketing reports. Merchants on the 2Subscribe plan can view subscription reports, including renewal and churn rate, active customers, etc.
- Security: 2Checkout provides tools for fraud management. In addition, 2Checkout complies with a whole slew of security standards. They are PCI DSS compliant, ISAE 3402 and SSAE 18 compliant, and GDPR compliant (for the EU). 2Checkout also boasts a 99.98% uptime.
- Shopping Cart Integration: In addition to hosted payment pages and direct integration options, 2CO already integrates with an ever-increasing lineup of established eCommerce shopping carts. The current cart count is over 120. Note that invoicing, booking, and other types of software integrations are also included in 2CO’s “shopping cart” list. You’ll also have access to 2Checkout’s simple plug and play cart with both hosted and inline checkout.
In addition, 2Checkout offers an optional and unique selling solution that they’re calling “Merchant of Record.” In this model, 2Checkout becomes a reseller of your digital and physical goods. Your goods are sold on a “co-branded” website, and 2Checkout is responsible for order processing, payment processing, and tax collection. You, as the merchant, are able to change the look and feel of the website and monitor your sales through a dashboard. You are still responsible for shipping your physical products, but aside from that, the daily operations of your business are passed on to 2Checkout. 2Checkout also offers add-on services for building integrations and marketing, which are available for purchase. I was not able to find pricing information about any of these services online. I imagine pricing depends upon your business and current sales.
Keep in mind that this Merchant of Record service is entirely separate from the payment processing service. If you choose to use 2Checkout’s payment processing service, you will not be required to sign up for Merchant of Record.
All in all, I am impressed by 2Checkout’s range of features. I like especially that 2CO offers three different ways to add their checkout services to your website (Standard, Inline, and Payment API). You can see which of these checkout services are compatible with your shopping cart by looking in 2CO’s master list of third-party integrations. Each integration lists the available checkout options, as well as whether recurring billing is available. Hooray for an organized website!
Fees & Rates
2Checkout bases their pricing on a pay-as-you-go model. That means that you’ll pay per transaction. There are no monthly fees or early termination fees, and that’s great!
That said, 2Checkout’s transaction rates are higher than we’re used to seeing. The lowest plan charges 3.5% + $0.35 per transaction, which is 0.6% + $0.05 more than the industry standard rate for online transactions (2.9% + $0.30). If you are just looking for a basic online processor, that price might be a deal breaker for you.
However, in return for these higher transaction rates, you’ll gain access to a few features that aren’t available with cheaper competitors. For example, compared to Stripe, 2Checkout has much more extensive international capabilities. While Stripe is open to merchants in 34 countries, 2Checkout is available in over 200. In addition, 2Checkout is often praised for its usability; the same cannot be said for Stripe. And of course, 2Checkout comes with features that cost extra with other services, such as recurring billing and an online store builder.
As you explore your payment processing options, be sure to consider the features you need and what those features will cost you with each processor.
2Checkout’s pricing is divided into three pricing plans. Each step up in pricing includes access to more features. We’ve already covered which features are included in each plan, so I’ll just list the transaction rates here:
- 2Sell: 3.5% + $0.35 per transaction
- 2Subscribe: 4.5% + $0.45 per transaction
- 2Monetize: 6.0% + $0.60 per transaction
There is also an enterprise plan for high-volume sellers. If you sign up for this plan, you’ll be able to negotiate your pricing and features. The enterprise plan includes premium on-boarding, dedicated support, professional services, custom integration, and an affiliate network.
2Checkout charges very few fees on top of their flat transaction rates. You’ll only need to be aware of the chargeback fee (which is charged by all payment processors) and the cross-border fee. 2Checkout’s chargeback fee depends on your business’s chargeback ratio. If your chargebacks make up less than 1% of your transactions, you’ll pay $15 per transaction. If your chargeback ratio falls between 1%-2% it’s a $20 fee, and if your ratio is higher than 2% it’s $45. You’ll want to keep your chargeback ratio under 1% to avoid higher fees and to keep your account in good standing with 2Checkout.
In addition, you’ll need to consider the cross-border fee. If you are operating in one of 23 select countries (including the USA, Canada, and the UK), you can expect to pay an additional 2% cross-border fee to accept payments from customers outside of that country.
Also, note that transaction rates can vary for a few advanced localized payment methods (like Boleto Bancario and Kombini). One of these “advanced” payment methods is 2Check (eCheck)/ACH. I’ve been told that the additional cost for this type of processing is 2.6% + $0.15, and it only available for certain packages. Ask about rates for any local payment method that you plan on using.
Add-ons are also available at additional cost. I have not been able to find any information about pricing for add-ons. Let us know in the comments below how much your business has paid for 2Checkout add-ons!
Contract Length & Early Termination Fee
The 2Checkout website includes two Terms & Conditions documents, however, both of these documents appear to be written for the end consumer, not the merchant. In order to get ahold of a Merchant Agreement, you’ll need to contact 2Checkout directly. Upon request, you may be sent two different documents: one for 2CO’s payment processing services as a PSP, and the other for the Merchant of Record model that we discussed earlier. In this review, we will be focusing exclusively on 2CO’s payment processing.
2Checkout’s payment solutions are offered on a month-to-month basis with no early termination fee. Your agreement may be terminated with 30 days prior written notice. Upon termination, 2CO may decide to reserve a portion of your funds as a “deposit.” The purpose of this deposit is to guarantee security for 2CO by covering any remaining refunds, chargebacks, fees, and penalties that your business may incur after you terminate your 2CO account. 2CO can choose to hold this deposit for as long as they deem necessary; they state in their Merchant Agreement that it is typical to hold these funds for up to 180 days (the standard window for chargebacks on credit transactions). I have seen many complaints online that mention this deposit. You’ll need to consider the potential of having your funds help for up to half a year before you commit to 2CO. And always, always, read the full Merchant Agreement before you sign.
In addition, you’ll want to check out 2CO’s Legal Overview, including 2Checkout’s lists of prohibited and restricted products, listed under Compliance > AUP (that’s Acceptable Use Policy). A lot of these businesses are commonly found on the no-fly list for third-party processors, but I will say that 2CO’s policy is one of the most comprehensive and detailed. The lack of ambiguity is a huge plus. If your business is even remotely close to a restricted category, save yourself some future pain and clear it with 2CO from the beginning, or just look elsewhere. You may need a processor that specializes in high-risk industries, or else live in perpetual fear of a frozen or terminated 2CO account.
Finally, information on payouts and 2CO’s rolling reserve is available in the knowledge base. Here’s a quick overview on 2CO’s policies:
Payouts occur on a weekly basis for merchants on the 2Sell and 2Subscribe plans. Sellers on 2Monetize will have monthly payouts by default. One week is a long time to wait for a payout, and one month can feel like an eternity! In fact, slow payouts is one of the negatives that we’ve seen users mention on third-party review sites. If you decide to go with 2Checkout, try to negotiate a more frequent payout schedule. As always, get your negotiated payout schedule in writing.
2Checkout operates on a rolling reserve: the company will withhold 5% of your transactions for 90 days, on a rolling basis. 2Checkout also maintains the right to raise the reserve rate (hold more of your money) if your business experiences too many chargebacks or refunds. This is another frequent cause of complaints. Read 2Checkouts’ information on how to maintain a low reserve rate in their knowledge base. However, keep in mind that this issue (held funds) is typical of all PSPs. Check out our article, How To Avoid Merchant Account Holds, Freezes, And Terminations, for more advice on how to avoid this problem.
Overall, 2Checkout is on par with similar providers as far as processing agreements go, maybe even a bit better thanks to that super-clear list of prohibited businesses. I’ve said it once, and I’ll say it again: Make sure you read every word of each document you sign. You don’t want to be surprised by held funds or a terminated account later on down the road.
Sales & Advertising Transparency
2Checkout doesn’t appear to use gimmicky marketing tactics, which is great news. Pricing is straightforward and easily accessed, as is the fact that 2CO is a PSP, not a merchant account provider. Advertising is standard and mostly limited to the web. 2CO attracts new customers via its site or referrals, and I found no evidence of an old-school sales force making cold calls to potential customers.
As I’ve already mentioned, the website is clear and quite easy to navigate, which goes a long way toward transparency. The Legal center contains several handy resources such as privacy policies and restricted industries. One way I think 2Checkout could continue to improve in transparency is to make this list of restricted industries even more available for onboarding merchants; negative reviews indicate to me that many merchants sign on with the processor without having read this list. Overall, though, 2Checkout does very well in this area.
Customer Service & Technical Support
2Checkout offers technical support through a few different avenues. You can get help for order and payment issues 24/7 through phone and email. And true to 2Checkout’s international approach, that support is available in nine different languages.
Take a look at all the ways you can contact 2CO, as well as a few of the learning resources you can access:
- Phone Support: Monday-Friday, 8 AM-4:30 PM EST. Not great hours, but the fact that phone support exists at all is a mark in 2CO’s favor.
- Support Tickets: Inquiries outside normal the operating hours listed above are answered ASAP.
- FAQ: This webpage covers a dozen or so basic topics.
- eCommerce Resources: Whitepapers, webinars, infographics, and data sheets are available for download. You’ll have to hand over some personal information (name, phone number, and email) to access these resources. You can also view product release videos (no personal information required).
- Glossary: Not extensive, but better than nothing.
- Blog: 2Checkout publishes articles regularly, covering selling strategies and industry news.
- Developer Resources: Includes a knowledge base and API documentation. I’d definitely suggest perusing these resources if you’re considering 2CO. I found very important bits of information here, such as details on payout options and the rolling reserve.
You can also contact 2Checkout via social media (although this is more of a last resort option). 2Checkout is active on Facebook, Instagram, LinkedIn, and Twitter. They occasionally respond to customer complaints and concerns on these platforms.
Negative Reviews & Complaints
Every processing company receives its fair share of complaints, and 2CO is no exception. Reviews of 2Checkout cover a wide variety of opinions. Some users love 2CO, others call it a scam. In total, I found more negative reviews than positive, however, this is not abnormal for a payment processor (take a look at our article on negativity bias). After reading hundreds of reviews, I was able to identify a few trends in these comments, both positive and negative.
First of all, 2Checkout maintains an A+ rating with the Better Business Bureau, with 39 complaints issued in the past three years. This number has remained relatively stable since our last check-in, with 23 complaints filed in the last year. Of these 39 complaints, 10 have been resolved to the customers’ satisfaction. Trustpilot, Google reviews, and other sites gather up more complaints. Here are the issues that come up the most:
- Account Termination: 2CO appears to closely monitor accounts, with users reporting account closure with no notice or a highly inadequate explanation. Some merchants said that 2CO closed their account after performing a final review of the business, even after those merchants had been using 2CO for years. Before filling out a 2CO application, read our article on how to avoid freezes, fees, terminations. Most importantly, review that prohibited products list. If your business could be considered high-risk, you might want to choose a processor such as Durango Merchant Services.
- Withheld Funds: Some merchants report dissatisfaction with 2Checkout’s reserve policy — the automatic holding of 5% of each payout for 90 days to protect against risk and chargebacks. Most often, sellers were frustrated that their money was (or still is) being held for an indefinite period after their account was suddenly frozen for review or just plain closed. This period is typically at least 90 days and sometimes much longer (up to a year!).
- Poor/Slow Customer Service: The most common complaint of this type is a frustration with the lack of urgency and clarity in the resolution process with 2CO. Merchants feel strung along or left in the dark for long periods.
That all sounds pretty bad at first glance, but it’s important to point out that compared with its prominent competitors, the overall complaint total for 2Checkout seems “reasonable” to me.
I know — we’d all love a company with a perfect track record. Yet, when pretty much anyone can initially sign up and start selling, things are almost guaranteed to go awry a certain percentage of the time. Some accounts will never make it past further review.
I don’t believe 2Checkout relishes closing accounts or holds funds simply for its own gain. On the other hand, it’s clear that improvements could be made to 2Checkout’s communication and notification process. My best advice is to not leave the tiniest bit of ambiguity about what you do and don’t sell, keeping 2CO updated at all times.
Positive Reviews & Testimonials
2Checkout includes a brief list of testimonials on the “Clients” page of their website. These reviews were originally written on third-party review sites, and 2CO provides links to those original comments. 2Checkout also lists a handful of video testimonials on their Youtube channel. Around the web, I found bits of praise for 2CO in the form of written reviews from users. Here’s what those positive reviews tended to mention:
- Widely Available: 2CO works in multiple payment methods, currencies, and languages. Most significantly, there are only handful of countries 2CO does not serve. Some merchants have selected 2CO essentially by default, but have been happy with the option nonetheless. Several sellers expressed gratitude that 2CO is available in countries where companies such as Stripe or Shopify Payments are not. Merchants also like how 2CO is able to manage international tax rules.
- Easy To Use: Merchants report that 2CO is quick to set up and operate.
- Support: Some comments report positive interactions with customer service and support. Note that overall I’ve seen many more negative comments on customer support than positive.
By now, you might also be wondering about Avangate’s reputation. The Artist Formerly Known as Avangate has garnered an equal mix of five star reviews and one star reviews across the web. Now that Avangate has completely transitioned to 2CO, we likely won’t see any new comments about this specific company name.
All in all, I’d say that 2Checkout is a good solution for a couple specific categories of merchants. If you are selling exclusively online, and you need access to comprehensive subscription management features, 2CO may be for you. In the same vein, if your business is located in a country without many payment processing options, it’s likely that 2Checkout will in fact be available. Merchants who fall into either of these two categories — and who don’t mind paying a little more per transaction — should consider 2CO.
Along with its easy-to-navigate website, I appreciate 2Checkout’s two simple hosted payment page options, as well as its experience handling payments for both physical and digital goods. I also like that they’ve added a third option to host checkout yourself using 2Checkout’s direct API. (Note: If they dare change their name to “3Checkout” because of this, I’m going 2Befurious.)
Anyway, the point is, there are now three payment setup options — so no coding needed unless you want to — plus compatibility with virtually all shopping carts. 2Checkout is most definitely a viable option when compared to other merchant account alternatives like Stripe or PayPal. Considering this, along with 2CO’s decent reputation up to this point, I’m giving 2CO a score of 4.5 stars.
Like other third-party processors, 2Checkout is more likely to take on sellers with less than perfect credit scores, and it is better at dealing with risk than a lot of traditional merchant account providers. At the same time, the meaning of “risk” is always a bit subjective. 2Checkout reserves the right to close your account if you’ve crossed the acceptable threshold in its eyes. If you choose to work with 2CO, familiarize yourself with the processor’s procedures, as well as the fee and payout structure, so you’re one step ahead of the game. Talk to a live risk department employee before applying for an account if there’s a modicum of doubt.
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. In addition, it is important to consider how 2CO fees will affect your bottom line. Lastly, I’d suggest reading through the comments at the end of this review, at the BBB, and around the web. That should help you wrap your mind around the types of sellers and products that most of often result in account instability with 2CO.
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.