Why CyberSource sucks for Small Business
Just like so many others in the space do, CyberSource (NASDAQ CYBS) closed down BidPay abruptly and without notice. The question of course everyone is asking is: Why? About two years ago, CyberSource realized that it was faltering. There are so many Fortune 500’s out there (500 to be exact), but of those, there aren’t too many who would even bother to consider dropping their current solution and moving to an antiquated solution like CyberSource. They had to do something to try and recapture some momentum as they didn’t want to find themselves where they were 5 years ago (headed towards bankruptcy).
They quickly realized that while their risk management tools did little to help small merchants with fraud, they still had a name out there in the space that they could use, so they turned to the small business arena. They soon came out with a small business package, in the hopes that they could parlay many of those clients into the more lucrative business of consulting services which CybersSource finds is not only much more profitable, but accounts for a good chunk of change they didn’t even know existed a few years back. Unfortunately, they quickly realized that very few small business clients had any interest in paying thousands for integration on a service they ultimately would spend $30 a month for. The unexpected challenge for CyberSource was that small business requires even more support than the larger players, maybe not on a case by case basis, but definitely overall.
What ended up happening is CyberSource came to the conclusion that in fact once a small business was locked into their processing system, they often didn’t want to or would think about changing. When it comes down to it, the average merchant simply wont change payment gateways or providers and interrupt their payment flow when their revenues were at stake. One bad move could be disastrous, so thousands upon thousands of small business owners found themselves stuck with a poor risk management tool and an even worse customer support oriented company.
Of course for CyberSource, it didn’t matter. Over the next few years, they quickly began looking for more large quantity small business owner relationships they could funnel more merchants into. They signed a lucrative contract with MIVA which CyberSource now controls and anyone who has ever used MIVA Payments, otherwise known as CyberSource, will tell you that support is nonexistent. Then came BidPay and while merchants demanded more and more, CyberSource was unwilling to put the money behind these clients and couldn’t attract any one of them to its other profitable units. Then of course came the biggie, with the acquisition of Authorize.net, now 200,000+ merchants are forced to settle with hour-long support wait times, poor service, and even poorer solutions, as CyberSource tries to monetize the platform without spending money on badly needed resources.
The funny side of the story is that Wall Street isn’t pay attention to this latest CyberSource move. While yes, Authorize.Net gave CyberSource access to hundreds of thousands of business owners, the reality is that it came at a big price. More so, unlike other solutions, Authorize.Net was built on the premise of ease of integration, which means ease of moving to other providers. I would imagine that a good 40,000 to 60,000 merchants drop the Authorize.Net platform over the next year making CyberSource realize, you can’t turn your back on your small customers forever.
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Comment by Todd on 15 February 2008:
Been using CyberSource’s Authorize.net for a couple years.
Recently I had a purchase. The card was declined due to enabling an Authorize.net “feature” that would decline a charge based on AVS mismatch. I tried the charge a second time to make sure it wasn’t my mistake entering info into their virtual terminal, again declined.
I notified the customer, the customer confirmed that the charges were, indeed, approved. I confirmed that with the merchant account provider, and yes, the charges were funded.
I’ve now spent a week calling everyday to resolve this. I’ve been told only a manager can correct this, but nobody will allow me to speak with one. No return call from management as promised. Their support staff are all condescending cocky little suckers. I’m going to eat a chargeback penalty and consequences because of this.
To this date, Authorize.net is incapable of correcting the charges or providing a way I can get a refund processed. It was suggested I write the customer a check. I own two other businesses with 2 other card processors, both offer a way to process credits. But apparently that is beyond Authorize.net’s capabilities if their “system” says they were declined. WHAT A CROCK!!
Never again! I’m going to recommend to all my clients to move away from Authorize.net at any cost. The fees and lost time from this one incident are over $500.
Comment by Ed on 23 April 2008:
Paypal is worse. Their support for merchants is non-existent. I’ve had Verisign Payflow link for years. When it works, it works. When it doesn’t, your screwed. There is not even a link for online support in their new “Paypal Manager” console that we merchants are supposed to use. All support is for PayPal and consumers. And that’s nothing to brag about either!
Comment by michael on 3 December 2008:
Our online magazine has been dicked around by Cybersource since 2004. The support system they have has practically faded and it appears that we are just another number. Instead of providing hands-on service to make sure their customers are happy, they provide us with an irritable email support system that is inadequate. When we complained that we want to talk to someone when there is a problem they said our account does not qualify to get live support. HELLO? There is no direct help when you need it, and after cursing them for the umpteeth time (finally being able to lodge my complaints with that useless Trish Martin, VP Customer Support) they decided to lock our account - so all this week we have not been able to access our clients accounts to check problems associated with recurring subscriptions. They haven’t helped our company at all, in fact, they have cost us a LOT of time and money. This week we will be changing to another payment gateway. DO NOT patronize Cybersource. You will regret that you did and you’ll be inundated with problems. They need to realize that the customer comes first and that we have a choice whether to patronize their business… AND because they have ticked me off so much I am now spreading this news to everyone over the internet until I get an apology from them.
Comment by George on 24 April 2009:
I called them 5 days ago, trying to open a merchant account. I decided that it would be a good idea to become a reseller (MIIIIIIISSSSSTAKE), filled out application, then, nothing. No emails no calls, nothing. I emailed the person I got the application from, she said she emailed me back, looked everywhere but no email. I finally got a hold of her, she said someone else is in charge of my id now, transferred me, the guy did not answer, sent email to him, no respose.
I wonder how these people are in business.
Comment by Tim on 27 April 2009:
George- Wow that is pretty bad!! CyberSource AKA Authorize.Net is suppose to specialize in Resellers. I am actually shocked they did that. Well, there are a lot of other good Gateways that are always up for Resellers. Let me know if you want suggestions.