Wednesday, April 15, 2009

Keep your pre-registration money in your bank account

I have read of a few meeting management companies going bankrupt this year, taking some of their clients' pre-registration revenue with them. Having lived through the event registration carnage of 2001-2004 (remember,,, I thought that large event producers had learned to process fees directly into their own bank accounts. Meetings technology companies seem to be stronger this time, but I don't think these will be the last bankruptcies.

If your event produces a substantial amount of money (whose loss would severely hurt your organization) then I suggest you set up an Internet-ready merchant bank account and have your registration service provider process payments directly into your account. This is standard practice for many companies like Certain Software.

Don't trust your vendors bank accounts, and don't trust escrow services as funds can be diverted by criminal or accidental negligence.


Anonymous said...

Can you please explain how the process works for setting up the merchant account with Certain for direct deposits. Or give a visual for the various gateway/merchant account/bank account or other pieces involved?

Rick Borry said...

In general, the integrated e-commerce payment process works as follows:

1. Client sets up an "Internet-capable" merchant account with their bank (also called "Mail Order/Phone Order" or "Card Not Present" accounts) - this allows credit card processing into your merchant bank account.

2. Client works with bank to set up Credit Card Processor for merchant bank account. In some cases this is part of step #1, e.g. Wells Fargo and BofA provides both the bank account and credit card processor; in other cases the bank will recommend a third-party processor such as Chase Paymentech or First Data. The best payment processor for you depends on your bank and the types of charges you process (e.g. some processors charge flat transaction fees and will be better for low volume / high amount charges compared to percentage-based fees).

3. Client works with Certain Software to set up an Internet Payment Gateway, typically Paypal / Verisign or Cybersource. This account makes the connection between Certain Software and your credit card processor.

4. Your Certain Software implementation manager enters access information for your Internet Payment Gateway into an "E-commerce account" in Certain Meetings. This allows real-time, seamless payments and refunds from your online event registration forms into your merchant bank account.

This entire process can require 3 days to 3 weeks, depending on how fast you and your bank move. But after setting up the connection for one event, you won't have to make any changes for future events unless your bank changes.