The Dangers of Third Party Credit Card Arrangements

Many online event registration services allow clients to use their merchant accounts for collecting fees by credit card. This is very easy for you since it means you don't have to go through the process of applying for a merchant account. However, the use of such third party accounts can incur tremendous liabilities for the third party and you, as well as increasing your per registrant fees.

Why should you pay third parties a percentage of your registration fees to increase your liability exposure with only minimal benefits in short-term convenience?


How Liabilities May Be Incurred
  • Let's say online registration CompanyX, the third party, collects registration fees for you with their merchant account.
  • They make payments to you on a regular basis, although they keep some monies back for chargebacks (disputed charges).
  • Then, for some reason or another, your event is cancelled.
  • CompanyX is liable for the refunds to your registrants and if your organization has spent the money on pre-event items, you can immediately see CompanyX's problem.
  • If CompanyX had a problem like that above with a company other than yours, then they may use the cash flow from your event to pay off those other liabilities, thereby delaying payments to you for an undefined time. Your payments from them are at risk.
  • Security Liability: By using CompanyX you are exposing your clients' credit card numbers to an intermediary and trusting them to keep that information secure. As recent news on identity theft shows, the less exposure you have to credit card numbers being in multiple hands the better.
Save Money, Be More Professional

Amplify encourages its clients to obtain their own merchant or PayPal account in order for us to collect your fees by credit card. We can facilitate the whole process, and generally your total online event registration costs will be considerably less. Amplify does not ever store any credit card number/expiration date information on its server; we merely pass information securely through to our clients trusted merchant bank for approval and payment.

In addition, with your own merchant or PayPal account, your name will appear on your registrants' credit card statement (as opposed to the third party's name) thereby reducing confusion and giving you a more professional image.

Your own merchant or PayPal account will almost certainly save you money, reduce your liabilities, and increase the security of your clients' critical credit card information. And you will normally receive your money within three business days of a registration payment taking place.

Amplify Software Online Event Registration is a transaction service of Amplify LLC. For more information: e-mail, or call (916)933-7700. Copyright © Amplify LLC 1999-2007. All rights reserved.