Help, transaction fees are too high!

[Jess78]

Hello,

I want to create a online store to sell products on, I have been looking at different website builders. However they have transaction fees when selecting payment methods, so if a customer was to buy something for £10 from me I will not receive the whole £10. The website builder will deduct some money off of that £10 as a transaction fee. What website builder does not charge a transaction fee? As I would like to avoid this.

If I build a website from a professional web developer will I still have to pay a transaction fee?

Thanks
Jess

 

[ctrlbrk]

Hi Jess

Unfortunately nothing is free. Yes, you can find website systems with no transaction fees but to receive payments you will need a payment processor (e.g. PayPal or Stripe), and they charge you to process the payment transactions as well.

In other words, to receive money you'd end up having to pay a transaction fee of some kind. I'd suggest it comes down to minimising your fees.

I think you'd have to become a merchant yourselt to avoid transaction fees - I could be wrong on this, I'm sure others will correct me.

 

[ahr56]

I would suggest building these fees into your pricing.

 

[ecommerce84]

You’ll never find a payment processor who doesn’t charge fees.

Someone such as Stripe charge approximately 1.5% + 20p per transaction with no monthly fees, so if you don’t make any sales you don’t pay anything.

If they process a £10 payment for you it will cost you 35p. You may get cheaper elsewhere though.

As mentioned above, you basically build this fee into your price so you effectively pass it onto the customer. If you aren’t able to do this as it will make your prices too high or your margin too low then you don’t really have a viable business.

 

[fisicx]

@Jess78 - and don’t forget you will need to subtract in the running costs of the site, marketing and returns. All of these mean you will get less than £10 for the sale.

 

[japancool]

I've just added a payment processor called Super Payments to my site, which allows people to pay using their banking app. It doesn't cost anything (i.e. there are no transaction fees).

However, this is only really appropriate if your target demographic is comfortable paying that way. Not everyone will. Out of all of my customers, the ones who use it the most are East Asian students.

 

[japancool]

Someone such as Stripe charge approximately 1.5% + 20p per transaction with no monthly fees, so if you don’t make any sales you don’t pay anything.

Stripe have put up their payment fees, I think it's 1.89% now.

 

[DontAsk]

Stripe have put up their payment fees, I think it's 1.89% now.

Not according to their website, for standard UK cards used in the UK.

 

[Mark T Jones]

Everyone who provides a service on your behalf needs to make money from it - if it appears to be free you need to think about how they are making money.

As has been mentioned, have you costed this through as a business? If merchant fees are a shock I suspect there will be bigger ones waiting.

I'm astounded how many of my friends - some of whom are smart people - have proudly told me how their kids have 'a nice little business selling xxxx on ebay' when I enquire 12 months later it ended due to 'costs'

 

[ctrlbrk]

Stripe have put up their payment fees, I think it's 1.89% now.

Where did you get that?

Pricing & Fees

Find Stripe fees and pricing information. Find our processing fees for credit cards, pricing models and pay-as-you-go fees for businesses.

stripe.com

 

[japancool]

Where did you get that?

Pricing & Fees

Find Stripe fees and pricing information. Find our processing fees for credit cards, pricing models and pay-as-you-go fees for businesses.

stripe.com

I had an email from Stripe a while ago. I'll need to try and find it again.

 

[Chris Ashdown]

You will need far greater costs on your marketing the site, than worry about transaction fees,There are millions of web sites that ever see a customer unless they spend on Marketing, in my case when the site was up i expected to spent between 7-10% on marketing to get customers and stand out from competitors

 

[StevensOnln1]

Pricing & fees | Stripe Official Site

View Stripe fees and pricing information. Explore pricing by product, by payment method including credit and debit cards, or design a custom pricing package.

stripe.com

1.9% + 20p for premium UK cards (business/corporate/commercial Visa/Mastercard).

3.25% + 20p for international cards issued outside the EEA.

 

[ctrlbrk]

i expected to spent between 7-10% on marketing

this may be a silly question, but 7-10% of what, turnover or profit?

 

[Paul Kelly ICHYB]

Stripe was 1.4% as is now 1.5%.

WooCommerce payments, powered by Stripe, is still 1.4%.

 

[Paul Kelly ICHYB]

Forgot to mention, if you want to reduce transaction costs, you need to have a proper merchant account, which could be lower than 0.3% for big volumes.

 

[JEREMY HAWKE]

The cost of doing business
Worldpay use us to pay their coffee bill each week .
Just pass it on to the customer

 

[ctrlbrk]

Stripe was 1.4% as is now 1.5%.

WooCommerce payments, powered by Stripe, is still 1.4%.

@StevensOnln1 pointed out that Stripe fees vary according to what type of credit card you're paying with. So apparently if you pay with a "commercial" or business credit card the fee is in the region of 1.9%.

 

[Chris Ashdown]

this may be a silly question, but 7-10% of what, turnover or profit?

Turnover

 

[Socio South West]

The cost of doing business
Worldpay use us to pay their coffee bill each week .
Just pass it on to the customer

It was very common to see surcharges for credit card payments until the Government's drive to track everyone's expenditure made it a useful device to make these charges illegal.
One of my customers reaction to this was to increase all prices by around 5%, regardless of method of payment - and they now tacetly offer discount to anyone paying by Bank Transfer (that they like!!!)
Interestingly enough, the number of cheques has dropped to a dribble, making the labour of going to the bank or wherever to pay them in a disruption.... so payment by cheque is now surcharged!

 

[AlanJ1]

It was very common to see surcharges for credit card payments until the Government's drive to track everyone's expenditure made it a useful device to make these charges illegal.
One of my customers reaction to this was to increase all prices by around 5%, regardless of method of payment - and they now tacetly offer discount to anyone paying by Bank Transfer (that they like!!!)
Interestingly enough, the number of cheques has dropped to a dribble, making the labour of going to the bank or wherever to pay them in a disruption.... so payment by cheque is now surcharged!

Why would anyone in business ever accept a cheque these days? Never understood them, let's send you something through the post that will take 5-7 days to clear when a BACS payment can be made in seconds!

 

[pentel]

Why would anyone in business ever accept a cheque these days?

The most recent cheque we received was from HMRC for a corporation tax refund. We had supplied them with our bank details....

 

[Kerwin]

Why would anyone in business ever accept a cheque these days? Never understood them, let's send you something through the post that will take 5-7 days to clear when a BACS payment can be made in seconds!

You can take a photo of a cheque on your phone, and it is automatically paid into your account.

 

[fisicx]

Why would anyone in business ever accept a cheque these days? Never understood them, let's send you something through the post that will take 5-7 days to clear when a BACS payment can be made in seconds!

Nope. BACS takes 3 days. A bank transfer takes seconds. Two different things.

 

[DontAsk]

The most recent cheque we received was from HMRC for a corporation tax refund. We had supplied them with our bank details....

Royal Mail pay compensation for lost items by cheque.

 

[DontAsk]

You can take a photo of a cheque on your phone, and it is automatically paid into your account.

Only if your bank app supports that.

 

[DontAsk]

Nope. BACS takes 3 days. A bank transfer takes seconds. Two different things.

Until relatively recently BACS was it for "bank transfer" for most people.

Nowadays "faster payments" generally take seconds, but can take much longer.

 

[fisicx]

Until relatively recently BACS was it for "bank transfer" for most people.

Nowadays "faster payments" generally take seconds, but can take much longer.

Agree. People thought they were making a BACS payment but they weren’t. We only discovered this when getting a payment from a solicitor, they used BACS not faster payments and it ended up taking 6 days (sent late Friday arrived following Wednesday)

 

[AlanJ1]

You can take a photo of a cheque on your phone, and it is automatically paid into your account.

Up to £500 in most banks, some are £2000

 

[AlanJ1]

Nope. BACS takes 3 days. A bank transfer takes seconds. Two different things.

Fair point, it's what I meant though.

 

[DontAsk]

Agree. People thought they were making a BACS payment but they weren’t. We only discovered this when getting a payment from a solicitor, they used BACS not faster payments and it ended up taking 6 days (sent late Friday arrived following Wednesday)

Are you sure it wasn't CHAPS, or is that only available to banks? Our bank has a daily limit of 4 x £20k for faster payments. Anything over that has to be chaps, requested by 'phone. Another bank (Virgin One) had a ridiculously low £1k per faster payment, max 10 per day.