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We have been using PayPal and FastSpring hosted payment processing for a long time now without any issues.

Just wondering, why do small businesses opt for self hosted payment processing given that one has to deal with issues like security, security certificates , dedicated IPs and what not. As I can see even the processing fee doesn't get lower] with self hosted solutions.]

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If by "self hosted payment processing" you mean having your own merchant account, there are a number of reasons to have your own.

  1. The rates on your own merchant account are much lower than Fastsprings, but not lower than Paypal
  2. Without a merchant account you can not process orders yourself. Your customers can not call you, write you, fax you, or send you an order via email. They must place the order themselves via a web site.
  3. Payment via your own merchant account is much faster than Paypal or Fastspring. Funds typically are directly deposited in your checking account the next day.
  4. With your own merchant account you control refunds and dispute resolutions (as fas as the credit card comapnies let you).
  5. If you process the orders yourself you can institute additional security for high risk items.
  6. Your customers see your company name on their credit card bill, not some other companies name.
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