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      AD2AD

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The Cloud-Based Classified Advertising System for Community Publications

 

proudly serving community publications since 2003

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Getting Paid

The Best Thing About AD2AD...

AD2AD’s built-in, simple online payment system improves your cash flow.

  • By default, web customers prepay by credit card
  • AD2AD’s automated renewal emails include a one-click link to renew by the same credit card
  • For your billed customers, you can optionally email invoices and statements with a link to pay by credit card

But How Do You Get the Money?

AD2AD gives you two settlement options:

  1. Direct deposit of funds to your own checking account this requires that you get a merchant account
  2. A monthly settlement check this is AD2AD’s default method.
 
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Option 1: Daily Direct Deposits to Your Checking Account

AD2AD recommends using your own Merchant Account with any merchant account provider that uses Authorize.net as a gateway. (For a list of such providers click here.) About 80% of merchant account providers use Authorize.net as their gateway. Your current bank may provide Authorize.net merchant accounts. If you get your own merchant account, you are selling directly to your customer AD2AD is acting solely as a software service provider, not your agent so funds are settled directly to your checking account on a daily batch basis.

 

How does AD2AD get paid in this case? AD2AD will ask you to provide a credit card, and charge that credit card for its service charges on a monthly basis.

 

 
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Option 2: Monthly Settlments AD2AD’s Default Method

If you don’t have or don’t want a merchant account, AD2AD’s can collect payments on your behalf and to settle accounts with a monthly check. In fact, this is AD2AD’s default method until you set merchant account parameters.

 

With option 2, in effect, AD2AD sells ads as your agent, collects credit card payments, then turns around and buys the ads from you at cost. AD2AD then sends you a monthly check for those ads, less gateway fees and our service charges.


Payments typically settle 30 days after the end of the month. (Payments can be delayed for a few days if we need to deal with chargebacks and credit card disputes. These happen more frequently when we process payments, as the customer’s charge card statement says “Newspaper Ad through AD2AD” rather “Small Town Press-Herald” or whatever, and customers often wonder if this is a fraud.  Typically you will have fewer chargebacks/disputes with your own merchant account, as customers will recognize your name on their credit card statement.)

 

Choosing Between the Options

Aside from the way you choose to get paid monthly settlement check or direct deposit of funds, you and your customers will not see any difference in the way the system operates these are differences in how the system manages accounts.

 

Why wouldn’t you want a merchant account? Mostly because of the costs involved. Merchant account fees vary widely. Merchant accounts offered by banks are often have high fixed monthly costs.

 

But despite those costs, a merchant account may still be preferable to AD2AD settlements, because of the immediacy, certainty, and availability of funds, and because of the likely reduction in chargebacks and costly and time-consuming disputes. The decision is not cut and dried.

 

With option 2, monthly settlements, AD2AD absorbs many of the fixed monthly fees charged by merchant accounts. For a small publication, the monthly merchant account fees could eat up a 20%-50% percent of your profits. So:

  • If you monthly classifieds revenue is small a few hundred dollars you may make significantly more money with AD2AD monthly settlements. But you won’t get immediate settlements, and you’ll likely see more chargebacks.

  • If your revenue is large thousands of dollars per month the fees charged by merchant accounts will not be so significant. In any case the money is in your account immediately no waiting and no worries. Also, there will be likely be fewer chargebacks and disputes, which can be costly.

  • If you fall between these extremes you will have to use your best judgement.

  • But don’t worry. You can change methods any time.

Calculating the Costs of a Merchant Account

For an example comparison, here are the costs of an Authorize.net merchant account. There are lots of other merchant account providers out there, some with higher fees, some with lower, but Authorize.net’s merchant account fees are pretty typical. When looking at the fees of merchant account providers, READ THE FINE PRINT VERY CAREFULLY. Very, very, very carefully.

(These fees come from the Authorize.net website: http://www.authorize.net/signupnow/)

 

Authorize.net Pricing

(June 2013 subject to change by Authorize.net)

Gateway Fees

Setup Fee

$99.00

Monthly Gateway Fee*

$20.00

Transaction Fee**

$0.10

Batch Fee***

$0.25

 

 

Merchant Account Fees

Setup Fee

$0.00

Monthly Service/Statement Fee*

$9.95

Transaction Fee**

$0.25

Visa/MasterCard/Discover Qualified Discount Rate****

2.19%

Monthly Processing Minimum Fee*

$25.00

 

 

 Notes on Authorize.net pricing: (these are our notes to clarify the fine print)


*Monthly fees combine $20 + $9.96 + $25 = $54.95/month

**These two fees combine $ .10 + $ .25 = $.35/transaction

*** $.25, any day you have a transaction so likely $5-$7.50/month

**** Higher rates apply for business, debit, and reward cards

In other words you’re looking at a minimum of about $60/month....

 

 

 

 

By comparison, with AD2AD settlements, most of these charges go away

NO fixed monthly costs we simply pass through the credit card processing costs

Gateway Fees

Setup Fee

$0.00

Monthly Gateway Fee*

$0.00

Transaction Fee**

$0.00

Batch Fee***

$0.00

 

 

Merchant Account Fees

Setup Fee

$0.00

Monthly Service/Statement Fee*

$0.00

Transaction Fee**

$0.35

Visa/MasterCard Base Discount Rate****
(Our Wells Fargo Merchant Account often charges higher discount rates on certain cards)

2.49%

Monthly Processing Minimum Fee*

$0.00

 

Switch Any Time

AD2AD is flexible. You can change your settlement options at any time.

 

You can see if AD2AD Monthly Settlements work for you, and if not, set up a merchant account. Or if you find the costs of a personal account absorb too much revenue, switch back to AD2AD settlements. If you change Merchant Account Providers, it’s easy to change your Authorize.net settings as well.

 

 

 
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