2Checkout (2Checkout.com & 2CO.com) is an electronic payment service (merchant account alternative) founded in 2000 that allows online merchants to accept credit card payments from their customers. Also called “2CO,” 2Checkout offers similar services to those of PayPal, Google Checkout, and Amazon Payments with at least one major difference: unlike the others, 2Checkout does not solicit the merchant’s customer to sign up for a 2Checkout account and simply lets the customer pay by using a credit or debit card (among a few other options). For the purposes of this 2Checkout review, we’ll be focusing on the company’s credit card and debit card processing services.
2Checkout focuses its service solely on providing online payment options to small and mid-size businesses and claims to have much lower shopping cart abandonment rates than its competitors. This focus also allows 2Checkout’s services to be more feature-rich and centered on the needs of online sellers. The one feature that lacks with 2Checkout is a virtual terminal, unless your business is a non-profit. Therefore, as a default setting, merchants cannot use 2Checkout to enter credit card information by hand. Merchants who wish to use the virtual terminal will need to contact their 2Checkout account representative.
2Checkout customers can choose from eight different payment methods, 15 languages and 26 different currencies. 2Checkout also serves merchants in 25 other countries outside of the U.S. 2Checkout’s U.S. headquarters can be found at 855 Grandview Avenue, Suite 110, Columbus, Ohio 43215. The founder and chairman of 2Checkout is Alan Homewood, while the CEO is Shawn Budde.
Sales & Marketing
Key Points - Sales & Marketing
|Uses independent resellers?||No|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||Yes|
2Checkout does not appear to use any misleading sales tactics or marketing in its official materials. The service is primarily marketed online through advertising and affiliates. All pricing is clearly displayed without hiding any processing fees or rate tiers, and there are no online complaints filed here or elsewhere that describe issues with the company’s sales staff. We have accordingly assigned the company an “A+” rating in this category.
2Checkout (2CO) Marketing Example
Costs & Contract
Key Points - Costs & Contract
|Domestic (U.S.) rate:||2.9% + $0.30|
|International rate:||3.9% + $0.30 or 5.5% + $0.45|
|PCI compliance fee:||None|
It is important to note that even though 2Checkout’s processing fee is somewhat high, 2Checkout offers several valuable services that are easy to use, and the company has no cancellation fees. This makes it a low-risk option for companies that need to process international payments.
Other 2Checkout Fees
|Change URL or Domain Name||$19|
|Percent of Disputes Incurred During Entire Account History||Fee for each Dispute|
|Up to 0.5%||$20|
|5 or more Chargebacks in last 30 days and Chargeback rate between 0.5% and 1%||$30|
|5 or more Chargebacks in last 30 days and Chargeback rate between 1% and 2%||$40|
|5 or more Chargebacks in last 30 days and Chargeback rate over 2%||$50|
There is an additional $15 fee for each charge dispute a merchant challenges.
There are a few other fees that the company may charge in circumstances unrelated to its credit card processing service. Merchants wishing to accept electronic checks and other forms of payment will want to inquire about these associated fees.
Complaints & Service
Key Points - Complaints & Service
|Live customer support?||Yes|
|Most common complaint:||Fund holds|
Like other popular merchant account alternatives, 2Checkout suffers from the problem of being available to just about anyone who wants to accept payments and therefore has a few dozen complaints filed online. Of the complaints, many appear to have originated from people that did not understand, or take the time to understand, the company’s fees and services. Other complaints seem to have been filed by customers who purchased goods from a 2Checkout merchant and mistakenly filed complaints against 2CO itself.
Of the valid complaints, the three most common types are of 2Checkout holding a merchant’s funds, improperly refunding a merchant, or cancelling a merchant’s account, all of which are likely due to the merchant engaging in transactions with a high risk of fraud or chargebacks. Although it is generally not our policy to lower a company’s score for having stringent fraud prevention policies, it does appear that 2Checkout could do a better job of communicating to merchants that any pending payments will not be released for 90 days after cancellation. There are also a few scattered complaints of technological issues and poor support when trying to resolve these issues.
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Key Points - BBB
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
2Checkout has been accredited with the Better Business Bureau since 2001 and, as of this review, holds an “A+” rating with 60 complaints filed in the last 36 months. Of the complaints, 41 are regarding problems with service, 13 with billing and collection disputes, four with advertising or sales issues, one with delivery problems, and one with a warranty or guarantee issue. 2Checkout has been able to successfully resolve 14 out of the 60 complaints, while the remainder either were not successfully resolved or did not receive a final response from the merchant. The company has also received ten informal complaints against its BBB profile. In light of these figures, we have adjusted the BBB’s rating to a “B.”
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About Phillip Parker
Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded CardPaymentOptions.com to help merchants enact positive change in the credit card processing industry. Schedule a Consultation with PhillipSchedule a Consultation with Phillip