Merchant Fees - eCommerce

[mtools]

Hi All

I've read the sticky on merchant accounts and I'm looking to move away from PayPal. I've always been with them as it is pretty straightforward and I wanted to benefit from also getting a reduced rate as I sell on eBay as well as my site. As the percentage from eBay falls and finally getting round to quantifying my actual rates I realised I am paying significantly more than what I could pay by doing a 2 minutes google search. I am on the 2.9% +20p rate with PayPal, however this works out as around 3.05 - 3.11% per transaction when the 20p is factored in. Barclays have offered me 1.5% though there is a bit of confusion around some of the other fees, so I want to drill down on my exact costs; i also pay £20 a month for PayPal so that is in addition to my 3.05 - 3.11%, making it around 3.3%.

What sort of percentages is everyone else paying? I currently pay around £350 a month and with Barclays it looks like I could be saving almost £200! I'm sure Barclays can't be the most competitive, only reason I looked is because I bank with them...

another factor i'd like to consider is that it needs to work with woocommerce / have a woocommerce plugin

 

[japancool]

Knowing other people's percentages won't help you, because the percentages will depend on your business sector, your turnover and so forth.

Going by your figures, your average transaction value is around £110, and you're doing 100 or so transactions a month. That should put you on the 2.4% band?

You will also have to pay a monthly fee with Barclays, which looks like it will be around £45 according to the first line of the small print on this page, so factor that in:
http://www.barclaycard.co.uk/busine...ose/ntc/online?WT.mc_id=C033L011N91&WT.srch=1

You might try using www.cardswitcher.co.uk to get a quote and see what sort of other rates you can get.

 

[Payment Expert]

The average interchange charged by Visa/MC is somewhere at 1.8% (debit cards are much lower, reward cards are higher). Amex is generally higher at 2.5%. The per item assessments depending on the type of transaction will average about 5 cents. Everything else that a merchant like him pays is the surcharge by the MSP/gateway that he uses. If his volume is high, he could find a better option, if not, then tough luck…

Ifyou need some more information on how the processing fees are charged you can have a look at articles on Paylosophy – ‘Processing costs’ and ‘Credit card convenience fees’. I cannot add links into my posts yet, so you can just google Paylosophy and find it.

 

[ecoleman]

Paypal charge you £20 but even having a merchant account you would need a payment processor. We use Secure Trading for this and are very happy with them. They charge us £15 for the first 300 transactions and then a couple of pence per transaction after that.

Credit card fees will vary depending (as said above) on your turnover, what you sell and the perceived risk involved. You may be quoted something like 1.5% for Visa or Mastercard, but in reality they don't tell you about purchasing cards and corporate cards for which they normally charge a slightly higher rate.

With a merchant account you will normally be charged a fee to process a refund. So unlike Paypal where you get your fees back, most merchant accounts will actually charge you twice. Once to take the payment and again to refund it.

However, if you are selling low value items, you should find (like ourselves) that most people will pay with a debit card. Debit cards cost us around 0.22p per transaction, whereas with Paypal on a £50 transaction you would be paying £1.65. Even on a £10 transaction you would still be paying paypal 0.49p

Having a merchant account means it is a bit more difficult for a customer to claim fraud or non receipt or not as described, so you tend not to get the scammers trying it on. Unlike Paypal, your merchant account provider is happy to hear your side and make a decision based on true facts.

Okay, so these are just some things to consider, but regardless of all of the above, having a merchant account will probably save you a fair bit of money over Paypal.

 

[mtools]

thanks for all the advice. on my website sales, the average order is around £50, around 80% are debit card, and 20% are paypal payments. so around £8,000 in debit card payments at £50 each, I'm paying 2.4% + 20p. I figure that the 20p is really driving up the price. i sell sporting goods and very rarely have to give refunds (only usually if an item is out of stock and they don't want to wait for it to come back in)

 

[japancool]

thanks for all the advice. on my website sales, the average order is around £50, around 80% are debit card, and 20% are paypal payments. so around £8,000 in debit card payments at £50 each, I'm paying 2.4% + 20p. I figure that the 20p is really driving up the price. i sell sporting goods and very rarely have to give refunds (only usually if an item is out of stock and they don't want to wait for it to come back in)

Bear in mind that normally, you will only be charged a fixed transaction fee with debit cards, in the order of 12-20p. If the vast majority of your sales are by debit card, I recommend you look for a merchant account that doesn't charge you a percentage for debit cards (which is almost all of them - the Barclays one is an exception).

So if you're taking 160 payments at 15p per payment, you'll be paying £24 for those, plus a payment gateway fee of around £20 a month.

 

[nevanjes]

Have you taken a look at Nochex a UK company with transactions fees of 2.9+20p and a one off small set up fee.no monthly fees.

 

[mtools]

Have you taken a look at Nochex a UK company with transactions fees of 2.9+20p and a one off small set up fee.no monthly fees.

that's worse than my current rate. even with the £20 a month, across 160 payments that works out as 12.5p per payment. with an average order of £50 I pay £1.40 fees (2.4% + 20p) + 12.5p = £1.53. with Nochex I would pay £1.65 on the same transaction. also, you have 4 posts and they are all related to Nochex, so I am willing to bet you work for them

 

[LMDServicesUK]

Hi

Happy to provide you a quote for a ecomms Payment Gateway and Merchant account, and I am confident we would be competitive against Barclays, and if you decide to apply and are approved we can have you up and running in 48 hours..

We also fully support Woo Commerce.

We also do not insist on a min 12 m contract term..

If you would like to discuss further please do PM me.

Rgds

Mark

 

[mtools]

Hi

Happy to provide you a quote for a ecomms Payment Gateway and Merchant account, and I am confident we would be competitive against Barclays, and if you decide to apply and are approved we can have you up and running in 48 hours..

We also fully support Woo Commerce.

We also do not insist on a min 12 m contract term..

If you would like to discuss further please do PM me.

Rgds

Mark

Thanks Mark, will PM you now. Looked on cardswitcher and looks like i've found a good one - card-cutters using Ingenico, should cost around £100 a month, there's a few others (CutPay Merchant Services which is around £105), I'm sure I will get better value than PayPal whichever one I choose!

 

[mtools]

ok, so I can pay £19.99 + VAT for my merchant account which includes 300 transactions (i had 200 last month), then 15p for each extra one. For debit cards I can pay an extra 19p on top or credit it is a percentage (something like 1.5%). My transactions are mainly debit so at 200 transactions last month I would have paid £38 in fees along with the £20 + VAT, so looks like considerable savings. they asked for 4 year contract though! not sure if I like the sound of that!

 

[Payments Guy]

Hi

Likewise, I'd love to provide you with a competitive quote. You will be able to beat the price that Paypal are charging, and get better service. Same goes for with Mark. If you PM me, I can get straight on with it. Turnaround time usually less than a week, and I can place you with Barclays, Streamline (Worldpay) and others.

Richard

 

[Payments Guy]

Stuart
Thanks for the PM. I've now replied. Thanks for the opportunity.

 

[LMDServicesUK]

Thanks Mark, will PM you now. Looked on cardswitcher and looks like i've found a good one - card-cutters using Ingenico, should cost around £100 a month, there's a few others (CutPay Merchant Services which is around £105), I'm sure I will get better value than PayPal whichever one I choose!

Hi Stuart

Be careful here, Ingenico is a physical card terminal so will be of no use to you for your ecommerce facility. PM me if you need any further assistance.

Mark

 

[Payments Guy]

Mark

Card Cutters use Ingenico's Virtual Terminal. Unusual I know, but I actually had a look at it the other day and it's functional enough.

Rich

 

[mtools]

I had a price off them for the website only bit and also separate quote for taking card payments with physical device. not really needing the latter as the fees are way too high with anything as I only do around 1 event a month at most, (maybe 6-8 a year) so I will probably stick with my SumUp reader which is around 2.7% but no monthly subscription or anything and I've already paid the £25 for the device last year.