Card Processing Fees

[Bl1ng]

Dear All,

I am building a business plan and need to understand the likely online card processing and direct debit fees I may incur.

A bit of background first, I will need to process a mixture of one off and recurring payments with individual transaction values ranging from £5 to £60. I don't need to take international payments, only UK payments.

Anticipated first year sales would be around £500k to £750k.

For Direct Debits, I believe the cost would be 1% of the transaction value from someone like Go Cardless - si this a correct assumption?

For debit and credit card processing, I would like to separate out the Merchant account/acquirer part from the payment gateway so as to allow flexibility in negotiating acquirer fees in future years.

I would be grateful if I can get some help on the costs I should be accounting for, broken out into Payment Gateway and Merchant/Acquirerer along with any minimum transaction fees I could be facing.

Thanks for any help you can provide.

 

[ecoleman]

card processing fees will differ from business to business depending on the perceived risk to the bank.
You should probably get a quote from a merchant account provider

Payment processing fees will also differ depending on Volume.

 

[BusinessTeam]

Good afternoon - as above card processing will differ depending on your supplier. We have 90% of our clients on GoCardless and this is a great platform and the fees are only1% which is correct.
Best wishes

Richard

 

[Payments Guy]

Hi @Bl1ng

I'd be happy to provide a full quote for card processing etc. Will need to get some details about the business etc firstly, if you'd like to open a PM conversation.

Regards

Richard

 

[Payment Expert]

The processing cost for credit card transaction processing is a combination of the base costs and markups (merchant discount). Base credit card processing fees consist of interchange and assessments. The interchange fees are the same for all the processors and constitute 70-80 % of processing fees. Interchange fees are paid to the card-issuing bank and sometimes they can vary depending on the processing method, card type, business peculiarities. Assessments are different for each card brand but still they are fixed and they cannot be changed by the processor.

Markups comprise 30-20% of the credit card processing fees and they can differ depending on the acquiring bank, processor, ISO(s), gateway or software provider. The markups can be decreased due to the merchant’s processing volume and the risk level. Or for instant, they can be higher if you need to accept international payments.

You wrote that you would like to separate Merchant account/acquirer part from the payment gateway. It is the right point in my opinion because when your processing volume is high and you have processing history it is easier to negotiate with the acquirer and it is most likely that they will suggest decreasing the fee they charge.

If you want to get to know more about processing cost components and transaction pricing strategies you can visit paylosophy

 

[Virtual Phone Numbers]

Dear All,

I am building a business plan and need to understand the likely online card processing and direct debit fees I may incur.

A bit of background first, I will need to process a mixture of one off and recurring payments with individual transaction values ranging from £5 to £60. I don't need to take international payments, only UK payments.

Anticipated first year sales would be around £500k to £750k.

For Direct Debits, I believe the cost would be 1% of the transaction value from someone like Go Cardless - si this a correct assumption?

For debit and credit card processing, I would like to separate out the Merchant account/acquirer part from the payment gateway so as to allow flexibility in negotiating acquirer fees in future years.

I would be grateful if I can get some help on the costs I should be accounting for, broken out into Payment Gateway and Merchant/Acquirerer along with any minimum transaction fees I could be facing.

Thanks for any help you can provide.

For card processing, there are loads of options and could depend on how old the company is and turnover.

For direct debits, I would also recommend Fastpay. A flat fee of maximum 50p, possibly lower on higher volume, and great people to deal with.

 

[busybob]

card processing fees will differ from business to business depending on the perceived risk to the bank.
You should probably get a quote from a merchant account provider.

Take note of this as the sector is important. e.g. adult websites are considered very high risk.

 

[andygambles]

For budgeting you should consider using 6% to cover both merchant and processor fees. It will be likely lower but to get an exact figure you would need to obtain quotes.

But also look at your average transaction value. If the majority of transactions are £5 and customers pay by debit card then the fee may be around 50p which is 10%.

 

[Nochexman]

Anticipated first year sales would be around £500k to £750k....

...For debit and credit card processing, I would like to separate out the Merchant account/acquirer part from the payment gateway so as to allow flexibility in negotiating acquirer fees in future years.

Hi Bl1ng. Do you have any trading history? If you don't then that will restrict your ability to negotiate rates. Many suppliers will offer you a headline rate based on the £750k, but behind that there will be penalty rates if you don't achieve that turnover, so be wary. Best of luck.

 

[singhabhishek251]

Fastpay is looking good to me and one of my friends has used this for his website and he was telling that their service is good enough.

 

[LMDServicesUK]

Hi

Like Payment Guy

Please PM me if you would like an indicative cost package, as it will depend on your Business, your risk type and Bus plan, happy to help if I can..

Mark

 

[Bl1ng]

Thank you for all the advice.

I am aware that price will vary with volume, industry and trading history hence was looking for indicative prices.

I also came across cardswitcher.co.uk that was helpful in getting a better idea of the type of charges I need to budget for.

 

[Bl1ng]

Good afternoon - as above card processing will differ depending on your supplier. We have 90% of our clients on GoCardless and this is a great platform and the fees are only1% which is correct.
Best wishes

Richard

Thanks for confirming this Richard