Talk processing fees for internet business

[theBiz]

It is amazing to me how often this is NOT talked about. We here all of these stories about start ups launching and then within two months doing X amount. Do most people realize your merchant will shut off your account if you exceed what you have signed off with your merchant? Do you know that you have to have a good credit score in order to get merchant services (accept credit cards).

Is anyone open to talking about their rates? I see many people are paying over 2% for qualified cards and sometimes almost 4% for non qualified plus all sorts of fees such as authorization fees, batch fees, payment gateway fee plus monthly fees.

I mean it seems some internet business startups can be paying anywhere from 2%-5% especially 5% if you are doing small transactions like 29.99 etc.


What would be considered a "good rate" for qualified and non qualified for a startup company? Please stick with "high risk" accounts only such as memberships sites where members do not receive anything tangible or may not get their desired results such as a dating site.

 

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[PatrickP]

Around 3% close to the same as Pay Pal.

I know some e-commerce stores doing 100K per month and only using Pay Pal. Because of course your customers can use a credit card when paying and not even have a Pay Pal account

I believe Am Ex we pay 4% not sure. I figure there is no way around it.

Of course when thinking about profit margins it should be taken into consideration.

 

[haosmark]

Nice, I was thinking of creating this thread not too long ago, but got sidetracked.

Please stick with "high risk" accounts only such as memberships sites where members do not receive anything tangible or may not get their desired results such as a dating site.

Do you want to create 2 threads? One for low/mid risk tangible goods, the other one for high risk intangibles?

I know some e-commerce stores doing 100K per month and only using Pay Pal.

That seriously makes no sense. Everyone should be aiming at reducing paypal usage on their site, they are such a rip off.



Can someone experienced expand on the following:
1) Difference between non-qualified and qualified
2) Average per transaction fee
3) Average monthly account charge, with anti-fraud included (fixed fees)
4) Why is authorize.net so popular? It's just a gateway, doesn't include merchant and has a high fixed monthly fee amounts.
5) What's the average that merchant accounts (only their rate, without payment gateway) charge per transaction, as well as monthly fee.
6) How does batch fee work?
7) Is tokenization an ability to save payment info in your merchant's database and request it next time a purchase is made, without making the customer retype it all again?

Last time I spoke with a sales rep, he wasn't too good at explaining things... Just kept saying "yes" in a very unconfident voice...

 

[theBiz]

Wasnt expecting a response, thank you. Wow rates are high. I realize most of the time merchants will not make the charges fall under qualified rates and it will almost always fall into mid qualified im concerned about the "interchange fees" and how they will vary, i put that in quotes by the way because im getting the feeling it is what they want it to be when they want it to be.

 

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[theBiz]

Can someone experienced expand on the following:
1) Difference between non-qualified and qualified
2) Average per transaction fee
3) Average monthly account charge, with anti-fraud included (fixed fees)
4) Why is authorize.net so popular? It's just a gateway, doesn't include merchant and has a high fixed monthly fee amounts.
5) What's the average that merchant accounts (only their rate, without payment gateway) charge per transaction, as well as monthly fee.
6) How does batch fee work?
7) Is tokenization an ability to save payment info in your merchant's database and request it next time a purchase is made, without making the customer retype it all again?

this is simple stuff please just google it.... its just terminology, lets stick with the more difficult parts please before this gets side tracked.

 

[PatrickP]

It is amazing to me how often this is NOT talked about. We here all of these stories about start ups launching and then within two months doing X amount. Do most people realize your merchant will shut off your account if you exceed what you have signed off with your merchant? Do you know that you have to have a good credit score in order to get merchant services (accept credit cards).

Is anyone open to talking about their rates? I see many people are paying over 2% for qualified cards and sometimes almost 4% for non qualified plus all sorts of fees such as authorization fees, batch fees, payment gateway fee plus monthly fees.

I mean it seems some internet business startups can be paying anywhere from 2%-5% especially 5% if you are doing small transactions like 29.99 etc.


What would be considered a "good rate" for qualified and non qualified for a startup company? Please stick with "high risk" accounts only such as memberships sites where members do not receive anything tangible or may not get their desired results such as a dating site.

Instead of waiting for answers to those questions, personally I would google most of them.


Is it at all possible that not thinking to do that yourself, or wanting to put in the effort to do that part of the reason you haven't started your business yet.

BTW while you are using up time trying to figure that out and and saying it makes no sense to use only PP are up and running doing over 1 million in sales/year.

 

[haosmark]

Is it at all possible that not thinking to do that yourself, or wanting to put in the effort to do that part of the reason you haven't started your business yet.

BTW while you are using up time trying to figure that out and and saying it makes no sense to use only PP are up and running doing over 1 million in sales/year.

I guess that was addressed to me.
Paypal charges you more in fees, that's why.

I did google stuff and called a few companies. I was looking for more opinions of experienced users, hence why I asked.

 

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[theBiz]

Paypal WONT accept high risk businesses....so it is not an option.

Is it at all possible that not thinking to do that yourself, or wanting to put in the effort.

I try not to do that here... I have done a ton of research.. a ton, most of it is bias opinions coming from merchants, even on forums posting for themselves pretending to be a happy customer, this is not my first day trying to figure this out.

 

[PatrickP]

Personally I think you can get caught up in researching things that really don't matter to your starting and operating a successful business.

Think of it this way.

If you want to take credit cards you can use Pay Pal and be up and operating in minutes.

If you want to have a credit card processor, email or call them and see if you qualify. If you don't then no need to learn what all those things mean.

If you DO qualify then call a bunch and get the one with the lowest rates.


Same with hosting. I don't need to know the minuta of uptime, max spled rate etc etc. I get advice from a few people, I check to see what host some sites use and I use the same one.

 

[theBiz]

Ok i agree with your outlook so i will not argue, there are very few options for a new high risk business with no previous sales so calling around is not even worth it. Most will not even accept it, so basically if a merchant approves a company like this just deal with the fees, focus on revenue, and worry about reducing cost later. Thanks

 

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[mlangley]

If you're in the USA and want to keep things simple and fees low. Check out Stripe for eCommerce and Square for in-person transactions.