Charges for card payments on-line.

[Tombo46]

I'm in the process of moving into home delivery for my greengrocers. As with any business plan I took everything I knew into account but one thing I didn't stress too much over was the cost of transactions on-line. In short. When so much money is handled on-line, why do they take so much? On the bricks and mortar side of my business I am paying a much much smaller fee and that includes my terminal rental and 24hr support. I see that PayPal charge 3.4% + 20p per transaction which I think is a crazy amount. Why is this so much more money than a physical card terminal?

PayPal may not be the best example however I used this based on nearly every website I go on using it. If they are using it, surely there must be good reason?

 

[SugarCubeProductions]

If you talk to the company you use for your physical card terminal you should be able to get an online account with them at the same fee.

Also the paypal charge of 3.4% is only for very small volume clients, as you do more business it drops altomaticly.

 

[LMDServicesUK]

Hi

Merchant account fees for online card processing are always higher as ecommerce is seen by the industry as Higher Risk than F2F transactions.

The actual rates you would pay will vary between different providers, and it is highly unlikely that you will be offered the same rates by your existing provider as already in place for your physical terminal account..

PayPal are expensive but they do not charge a monthly service fee, and the initial rates are based upon low volume of transactions

For example we provide ecomms merchant account and gateway from £ 33 PCM but this assumed you would be trading at least £ 500 PCM. Anything less than this PayPal will work out cheaper.

If you would like to find out more please PM me and I can provide you a more detailed quote once you have told me a little more about your business.

Rgds

Mark

 

[japancool]

If you talk to the company you use for your physical card terminal you should be able to get an online account with them at the same fee.

Also the paypal charge of 3.4% is only for very small volume clients, as you do more business it drops altomaticly.

I don't believe it does automatically drop - you have to apply for the reduced rate if you pass the threshold in the previous calendar month.

@Tombo46 - many sites offer Paypal because a lot of people use it, and you don't want to lose business. Buyers know it and trust it. We offer it as a payment option, but I certainly try to encourage people to use my gateway instead (by making it the default option, labelling it "Pay with credit/debit card"). I find about a third of my customers use it, and that's nothing to be sneezed at.

 

[Paul Norman]

Online carries considerably more risk than face to face, and in reality, payment portal and acquisition service providers have a limited understanding of that risk - and panic a bit. There are some notable exceptions to that.

However, the charge levels you are quoting seem high - it is worth shopping around. And remember, some of the big player/providers are far from the most expensive.

 

[Tombo46]

Thanks for the advice people. I've given my current provider a shout so we will see how things pan out =]

 

[ukwebhosting]

Hi

It doesn't automatically drop you have to apply

https://www.paypal.com/uk/cgi-bin/webscr?cmd=_display-receiving-fees-outside

Paul

 

[Red Wood]

I would highly recommend barclaycard ePDQ solutions. 1.5% approx.

 

[merchant-account-review]

E-commerce and over the phone credit card payments are seen as more risky to the acquiring banks. This is because of the actual / assumed extra risk that the buyer isn't present their sale (which some security needs to be compromised like Chip & PIN)... and therefore 'could' it be a fraudster?!!? which is what is mentioned in the thread above.

I would also mention that in choosing any e-commerce credit card payments partner transactional rate is VERY important (it would be a natural first thought) however please also consider:

How or where is the e-commerce facility going to take the payment? As this will impact on possible additional ongoing costs like PCI Compliance and ultimately the conversion of shoppers whom want conclude a sale.

What additional functionality can this gateway provide? just e-com or over the phone, payment via email?? other??

What additional charges like refunds, charge backs or customer not present transactions are there...?

What is the contract duration? and cancellation charges - if so what?

Is the chosen payment provider (PSP or is sometimes called a gateway provider) and merchant account provider (financial account to move your money to your business bank account) know to be stable and flexible?? giving good customer support? (No point picking a supplier if they have down time – you can’t trade!)

When speaking to any provider for your merchant account or acquiring they will ask do you have any proven turnover this will be a benchmark to get your transactional rates... Some merchants do not go direct to the bank provider they look at buying groups or Independent merchant account providers. They can lump your turnover even assumed turnover with their clients combined turnover thus getting a far better transactional rate / solution thank even going to the same acquirer direct....

Hoping this helps and good luck in your new venture


Best Wishes

Chris Richardson
0844 332 6545
merchantaccount-review.co.uk

 

[japancool]

I would highly recommend barclaycard ePDQ solutions. 1.5% approx.

The problem with Barclaycard is that the rate they offer is, I believe, flat across both debit and credit cards. Depending on your business, you can get better than 1.5% on credit cards and a flat pence-per-transaction at around or less than 25p for debit cards. If your volumes are high, it is definitely worthwhile looking for an alternative.

 

[merchant-account-review]

Would defo agree with Japancool… I would recommend looking at your average transaction value as a guide to help you make this choice… The larger the ATV the more likelihood someone will use a credit card.. To compliment this a debit card transactions in ecommerce should be NO more than 40p even if you have no proven turnover. This would mean:

Barclays processing via a credit card or debit card would cost you @1.5%:

£10 order on a card would be a cost of only 15p

£25 order on a card would be a cost of 37.5p

£50 order on a card would be 75p!!!

Also investigate monthly fees, and PTC (premium tariff charges…)

However

Other merchant account providers can charge an either OR cost…This would usually be charged with a month fee for the service…

For example:

£20 per month (ish!) for the solution, Credit cards charged at a % TBC OR debit cards a fixed fee per sale… no matter the total value of the sale. This transaction cost is typically sub 40p - 32p (ish!) Even if you are new to taking cards in e-com… Which would mean:

Debit Card costs

£10 order on a card would be a cost of only 32p (an additional cost of 17p)

£25 order on a card would be a cost of 32p (a saving of 5.5p)

£50 order on a debit card would be 32p!!! (a saving of 43p)

Again look into monthly fees, additional functionality for your gateway provider, can the solution take payment over the phone for you? Via email? Is it easy to use? Does it push the transactional data into your accounts package? and are there any nasty PTC’S?? (premium tariff charges…)

Obviously PayPal go one stage further by charging both % and fixed fee….! But this has easy integration, no monthly fee no set up. I would also say it is most suited to a younger audience as it is a little techy for some consumers and can put people off actually concluding the sale…

Hoping this is helps you any questions please feel free to get in touch

Chris Richardson
08443326545
Merchantaccount-review.co.uk

 

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