Absolutely cheapest merchant fees?
June 26, 2013 2:06 PM Subscribe
How can I arrange for the absolutely cheapest possible merchant fees when processing a credit card online?
The payments would be recurring and rather large: monthly charges of $700+. Is there anything out there that charges fees less than 2% of the charge?
The payments would be recurring and rather large: monthly charges of $700+. Is there anything out there that charges fees less than 2% of the charge?
Best answer: Not likely unless you do huge volume. You may want to look into a payment network like dwolla.
posted by wongcorgi at 2:19 PM on June 26, 2013
posted by wongcorgi at 2:19 PM on June 26, 2013
Best answer: Square has a $275/month pricing plan. If you run $14,000 in charges a month that'd be less than 2%.
There are a number of credit cards that pay 2% or more in rewards, so my gut is that you won't find anything less than 2% for small volume.
posted by payoto at 2:25 PM on June 26, 2013
There are a number of credit cards that pay 2% or more in rewards, so my gut is that you won't find anything less than 2% for small volume.
posted by payoto at 2:25 PM on June 26, 2013
Best answer: Here's a breakdown of the components to give you an idea of the minimum available to you. At $700/ month everyone is going to be close to the same but some providers will offer discounts to encourage you to increase your security requirements (e.g., asking for the CVV, turning on zip code/ card number confirmation). You may be able to reduce the number if you only allow purchases from a certain country or region as that decreases their risk as well.
posted by yerfatma at 2:53 PM on June 26, 2013
posted by yerfatma at 2:53 PM on June 26, 2013
$700 per month is not a large transaction. As mentioned in previous comments, these things scale inversely: as your revenue climbs, processing fees go down.
posted by dfriedman at 3:32 PM on June 26, 2013
posted by dfriedman at 3:32 PM on June 26, 2013
Yeah, what dfriedman said. My credit card processing fees are well north of $750 a month. Granted, this gives me interchange rates, but with that kind of volume, the fees are still a bitter pill to swallow.
You probably need to be in the low tens of thousands before processors will consider you for tailor-made lower rates. And no matter what you do, AMEX will always screw you unless you do HUGE volume.
posted by CommonSense at 5:32 PM on June 26, 2013
You probably need to be in the low tens of thousands before processors will consider you for tailor-made lower rates. And no matter what you do, AMEX will always screw you unless you do HUGE volume.
posted by CommonSense at 5:32 PM on June 26, 2013
Best answer: Not the most helpful responses, except for the Square comment and the Dwolla one, which wasn't really in the scope of what I asked, but probably should have been.
Here's more of what I hoped I'd see:
Amazon: 2.9% + 30 cents
posted by jsturgill at 5:51 PM on June 26, 2013
Here's more of what I hoped I'd see:
Amazon: 2.9% + 30 cents
- Volume discounts at $3,000 (2.5%), $10,000 (2.2%), and $100,000 (1.9%) in sales per month.
- Volume discounts start at $1 million per year, individually negotiated.
- Volume discounts at $3,000 (2.5%), $10,000 (2.2%), and $100,000 (negotiated) in sales per month.
- $25 per month.
- Didn't see any volume discounts.
- Volume discounts individually negotiated.
- Swiped cards (worth noting even though I specify online in the question) have a percentage fee of 1.69%.
- Monthly fee of $19.95.
- Looks like they charge an exorbitant amount for bank transfers (1% + 30 cents) (does that mean ACH?).
- Monthly fee of $34.95.
- Reasonable flat 55 cent fee for ACH.
- Higher fees if based outside the US.
- No discounts advertised.
posted by jsturgill at 5:51 PM on June 26, 2013
Response by poster: Any others not on the list? Anything that can be done with the ones I listed to obtain an additional discount?
posted by jsturgill at 5:54 PM on June 26, 2013
posted by jsturgill at 5:54 PM on June 26, 2013
I do e-comm for a living. No one is going to charge less than 2% at your volume. I'm settling several thousand a month, including one SINGLE charge of $100,000 a month average, and we're still paying more. Yes, we've researched it. In some cases 2% is less than the COST of the level processors you're going to be able to talk to. Your pricing for whatever you are doing simply needs to take this into account.
posted by randomkeystrike at 6:42 PM on June 26, 2013
posted by randomkeystrike at 6:42 PM on June 26, 2013
Not the most helpful responses
Sorry for being realistic. Fact is, nobody in this industry is impressed by $750 a month. Even $7,500 a month isn't going to impress too many processors.
They have us all over a barrel, and we're simply telling you that. I guess you want to shoot the messengers.
And from your follow-up post, it looks like you've done a lot of homework already, so I don't see why you even need our help.
Protip: Next time you ask for help from people, try not to shit all over them for answering your question.
posted by CommonSense at 8:03 PM on June 26, 2013 [5 favorites]
Sorry for being realistic. Fact is, nobody in this industry is impressed by $750 a month. Even $7,500 a month isn't going to impress too many processors.
They have us all over a barrel, and we're simply telling you that. I guess you want to shoot the messengers.
And from your follow-up post, it looks like you've done a lot of homework already, so I don't see why you even need our help.
Protip: Next time you ask for help from people, try not to shit all over them for answering your question.
posted by CommonSense at 8:03 PM on June 26, 2013 [5 favorites]
I'd be surprised if as of right now you find lower than 2.9% + $0.30 for non-swiped transactions with no other fees because that seems to be the rate at which the current price-leader companies like Stripe, Braintree, etc. are all calling a cease-fire as far as price competition goes.
posted by Dansaman at 11:14 PM on June 26, 2013
posted by Dansaman at 11:14 PM on June 26, 2013
Is there anything out there that charges fees less than 2% of the charge?
You asked for <2%, and then posted a long list of 2.3-2.9% options. There's a reason nobody brought those up - they don't fit your criteria, and you aren't a big enough volume customer to have the weight to negotiate.
posted by Tomorrowful at 6:47 AM on June 27, 2013
You asked for <2%, and then posted a long list of 2.3-2.9% options. There's a reason nobody brought those up - they don't fit your criteria, and you aren't a big enough volume customer to have the weight to negotiate.
posted by Tomorrowful at 6:47 AM on June 27, 2013
Response by poster: My primary question was "How can I arrange for the absolutely cheapest possible merchant fees when processing a credit card online?" That's the question I want answered, which is why I tried to emphasize it by putting it in the title and above the fold. I didn't intend to place undue emphasis on an arbitrary price point--the under 2% was a bonus unicorn query.
Going from 2.9% in fees to 2.3% is a large savings, and it's easy to calculate the break even point when taking the monthly fees into consideration. Publicly listed volume discount break points are relevant as well. That's very helpful information that I can act on, as well as anyone else that finds this question in the googles or whatever.
No offense meant to anyone with my followup attempt to redirect responses. There might be some agro at the credit card industry holding you over the barrel that's being projected into what I've written... and regardless, memail might be a better forum for scolding me in the future.
posted by jsturgill at 8:21 AM on June 27, 2013
Going from 2.9% in fees to 2.3% is a large savings, and it's easy to calculate the break even point when taking the monthly fees into consideration. Publicly listed volume discount break points are relevant as well. That's very helpful information that I can act on, as well as anyone else that finds this question in the googles or whatever.
No offense meant to anyone with my followup attempt to redirect responses. There might be some agro at the credit card industry holding you over the barrel that's being projected into what I've written... and regardless, memail might be a better forum for scolding me in the future.
posted by jsturgill at 8:21 AM on June 27, 2013
If you ever have to input the transactions manually (for example, a phone order if your website is not working), it might be important to know that with Stripe there's a virtual terminal you can use to input such transactions, whereas with Braintree you can't do that, and with PayPal it's a higher rate (3.1%) for doing that. Amazon's rate also appears to be for online transactions only.
posted by Dansaman at 12:22 PM on June 27, 2013
posted by Dansaman at 12:22 PM on June 27, 2013
Response by poster: For completeness' sake:
Balanced: 2.9% + 30 cents
posted by jsturgill at 1:13 PM on June 27, 2013
Balanced: 2.9% + 30 cents
- Cheap ACH out-bound transfers to pay others (25 cents)
- 1% + 30 cents for incoming ACH payments
- No volume discounts listed
posted by jsturgill at 1:13 PM on June 27, 2013
This thread is closed to new comments.
Potentially, but not at that revenue point. Wal-Mart probably pays smaller fees than that, but they do hundreds of billions in annual revenue. You're talking something in the neighborhood of ten grand. No one is likely to cut you many breaks at that point. If you can find a processor that will charge less than 2%, by all means go for it, but that's pretty much the industry standard in my experience.
posted by valkyryn at 2:17 PM on June 26, 2013