The intend of this article is not malicious or to badmouth 2CO (2CheckOut) but rather to give insight to those interested in using it, to relate to those who have faced the same problem and also to tell our story.
We have been using 2CO for 7+ years with great success, selling hundreds of thousands of dollars through their system and we also built up hundreds of recurring payments/subscriptions over the years. Everything went quite well and we were happy with 2CO.
We received an email from 2CO notifying that they are closing our account. I quote:
During their most recent review, your account was flagged because the percentage of your buyers that reported their transaction as fraudulent exceeded this standard. Unfortunately, due to your volume of fraudulent activity 2Checkout will no longer be able to support payment processing on your account
The month before, there were 4 large fraudulent orders on our account, all submitted in Japanese names/addresses. We noticed that they were fraud and they were charged back shortly thereafter so it was all good. Before that, we had some fraud orders but very few and many months without any fraudulent orders at all. So 2CO is closing our account because of 4 fraudulent orders the month before?
Note that those fraudulent orders weren’t submitted by us, they were maliciously submitted by people on our site who stole credit card details. There is no way for us to control this or stop anyone from using a stolen card through our site. There just isn’t. 2CO is under the impression that it is our fault that fraudulent orders were submitted on our account and that we should’ve prevented it somehow?
I was quite shocked to read this email and I understood what they said in the email but couldn’t understand how they would terminate an account without a warning or any collaboration/communication. I replied, expressing my disappointment and also requesting reconsideration. The reply was:
I completely understand your position; nevertheless, and while we provide our sellers with an anti-fraud tool, it is also the seller’s responsibility to take steps toward combating fraud and keeping a healthy account.
We would like to continue processing payments for your business. However, at the moment, we are required to close the account. We will review this decision in 60 days and look into the possibility of reinstating your account.
So we accepted that and moved on. We couldn’t move on just yet because it created much work and a loss of income for us.
First we had to update our systems to no longer give our customers the option of paying with 2CO anymore. This required quite a bit of work since the payments are integrated in several places but we managed to update that before the account was finally terminated.
Second, we had hundreds of recurring subscriptions on the 2CO account. Those recurring subscriptions were our residual income which we rely and depend on and it took us literally years to build up that large amount of recurring subscriptions. 2CO is just taking those away with the termination of the account. We had to get all those into a database to update our records and also to notify each and every one of those customers so that they can reinstate their recurring subscription manually using PayPal. The conversion on that will only be a percentage.
We are happy to move away from 2CO and actually feel relieved though. Here are the reasons:
1. Not user-friendly
Their system wasn’t user-friendly and their vendor panel was updated several times but it lacked essential features and finding things was a nightmare.
2. MasterCard stopped working
At one stage, in 2012, we only used 2CO for processing payments. For weeks, we received notifications from customers saying that they cannot pay on our site getting an “Unkown error” and we contacted 2CO with no resolution. The pattern started to form and some customers even let us know that their one card works but the other doesn’t. So the conclusion was that MasterCard payments stopped working. Eventually, 2CO changed that error message to “MasterCard is no longer supported”. We couldn’t process MasterCard payments for about 8 months until 2CO eventually did something about it.
3. Intermittent errors
Many customers complained throughout the 7 years that they cannot pay on our site. There were intermittent PE101 and PE102 errors when you go from our site to 2CO. Sometimes it worked, sometimes it didn’t. We contacted 2CO on several occasions and there never was any resolution to this. Up until just before our account was terminated, we still had those errors intermittently. I wouldn’t even want to imagine how many sales we lost due to that.
4. Extremely high fees
2CO charges 5.5% + $0.45 per transaction which is higher than many payment processors. If you compare it to PayPal which charges 2.9% + $0.30 per transaction you realize how insane the fees are. We are happy that we won’t be paying that much in fees anymore. In addition to that, we they also have a withdrawal fee which PayPal doesn’t have.
And so I can go on about it…