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Payment Costs to Providers - PayPal vs. Credit Card vs. Others
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Payment Costs to Providers - PayPal vs. Credit Card vs. Others

emgemg Veteran

I am an end user, and I buy VPSs, domain names, and many other goods and services on the Internet. I can pay using PayPal (bank account), PayPal (credit card), or directly with a credit card. Many of you are VPS providers, hosting providers, etc. I am interested in understanding your costs to accept payment, because I would like to choose the payment option that is best for my providers. (My costs are the same no matter which payment option I choose.)

Here are my questions - How much "bite" do your payment services take for:

  • PayPal with a bank account?
  • PayPal with a credit card?
  • Paying with a credit card directly?
  • Other payment options?

In other words, which is the lowest cost way that I can pay for goods and services that I buy on the Internet?

Comments

  • KihiKihi Member

    Out of all of them, Bitcoin is the best possible way with the lowest amount of fees. Even converting it to USD or CDN is cheaper than other methods.

    Then credit card (depending on your end-provider) and then PayPal.

    Thanked by 24n0nx Anna_Parker
  • @Kihi said:
    Out of all of them, Bitcoin is the best possible way with the lowest amount of fees. Even converting it to USD or CDN is cheaper than other methods.

    Then credit card (depending on your end-provider) and then PayPal.

    What merchant do you have that is less than Paypal's 2.9%?

  • Awmusic12635Awmusic12635 Member, Host Rep

    ItsChrisG said: What merchant do you have that is less than Paypal's 2.9%?

    Braintree is free for the first 50k per year

  • Awmusic12635 said: Braintree is free for the first 50k per year

    It's from paypal correct ?

    Thanked by 1TheKiller
  • Awmusic12635Awmusic12635 Member, Host Rep

    sdglhm said: It's from paypal correct ?

    owned but pretty much operated separately

  • ItsChrisGItsChrisG Member
    edited July 2015

    Cool for small guys I guess... but I really want to know where he is getting merchant rates lower than PP or Stripe's 2.9% on AMEX/VISA/MC

  • elgselgs Member

    PayPal: 4.4% + $.3 per transaction.

  • PP's fee is so expensive.

  • @ItsChrisG said:
    Cool for small guys I guess... but I really want to know where he is getting merchant rates lower than PP or Stripe's 2.9% on AMEX/VISA/MC

    If you're pushing volume, Paypal has discounts. I think we're at 2.2%. You have to call and ask for it though, but it's advertised on their fee chart.

  • vfusevfuse Member, Host Rep
    edited July 2015

    Paypal lowest advertised fee here is 1.5% but you'll have to do 100k per month.

  • WilliamWilliam Member
    edited July 2015

    ItsChrisG said: Cool for small guys I guess... but I really want to know where he is getting merchant rates lower than PP or Stripe's 2.9% on AMEX/VISA/MC

    A bank here in EU (based in LU) offers 1.7% on Visa/MC and 2.2% on AMEX - VISA/MC with 9c/transaction and AMEX at 11c/transaction. No volume required.

    So yea, totally possible.

  • BruceBruce Member

    @William said:

    online processing?

  • MrXMrX Member

    William said:

    A bank here in EU (based in LU) offers 1.7% on Visa/MC and 2.2% on AMEX - VISA/MC with 9c/transaction and AMEX at 11c/transaction. No volume required.

    So yea, totally possible.

    And even that is pretty expensive.

  • 4n0nx4n0nx Member

    I pay for any service in the EU that accepts it via bank transfer (IBAN). No fees at all...

    Bitcoin is great,too. Especially if the customer uses a method to buy them instantly and the seller exchanges them into real money instantly (=> no volatility risk).

  • vfusevfuse Member, Host Rep

    @MrX @William said:
    And even that is pretty expensive.

    I see a lot of people posting that these fees are high but no link to merchants. Care to post the processor thats charging less than 2%?

    Thanked by 24n0nx ItsChrisG
  • ItsChrisGItsChrisG Member
    edited July 2015

    @MrX said:
    And even that is pretty expensive.

    All talk, no meat.
    Try to stop acting cool and post some info or you just loook like a wannabe bullshitter...
    1.7% and 2.2% are expensive? YOURE A JOKE! Show a cheaper legit processor of CC's or be known as a liar.

  • @William said:
    A bank here in EU (based in LU) offers 1.7% on Visa/MC and 2.2% on AMEX - VISA/MC >with 9c/transaction and AMEX at 11c/transaction. No volume required.

    >

    So yea, totally possible.

    Which bank is it then? Where is the link to this offer or promo?

  • MrXMrX Member
    edited July 2015

    vfuse said: I see a lot of people posting that these fees are high but no link to merchants. Care to post the processor thats charging less than 2%?

    It depends a lot on who you are as a merchant. The reason you are all paying 2 - 3% for cards is because the processors you work with just assign you some figure and you don't even question it. This is called a blended pricing, and it's an extremely lucrative way for PSPs to make money on clueless merchants.

    The true costs from the card schemes depend on the domicile of the merchant and the location of the card issuer. It also depends on card type. For example, a MasterCard World Elite costs more than a regular MasterCard. Corporate cards also cost more.

    Accepting a consumer (non-corporate) UK issued debit card in the UK is cheap. I don't have the exact math in front of me, but we're talking around 1 to 1.2 GBP flat. If you are being charged a percentage for that, you are being absolutely ripped off.

    However, accepting an American issued credit card in the UK costs a lot. It can easily go up to and above 2% - before margins for the acquiring bank and the payment gateway are accounted for.

    Whether it's domestic, intra-region cross-border, international, and so all matters.

    You can get this kind of pricing with most of the big names in the industry: WorldPay, Adyen, GlobalCollect, Datacash, CyberSource, and so on. Operators like 2CheckOut and Stripe make it easy to sign up and start processing, in exchange for them bleeding you on fees. It sure is convenient, but it sure is expensive.

    Now, the catch is that you might not qualify for it if you are a very small operator. If you're struggling to turnover at least 10,000 EUR a year, for example, it might be hard to get any form of unblended pricing. Semi-blended might be possible.

    Oh, and you won't find the pricing on their websites necessarily. You have to ask about it.

    ItsChrisG said: All talk, no meat. Try to stop acting cool and post some info or you just loook like a wannabe bullshitter... 1.7% and 2.2% are expensive? YOURE A JOKE! Show a cheaper legit processor of CC's or be known as a liar.

    I'm sorry I made you so angry. I didn't realize what a sensitive issue this was for you.

    Thanked by 34n0nx souvarine erkin
  • leapswitchleapswitch Patron Provider, Veteran

    In India, gateways can go upto 1% per transaction for mc/visa depending on volume of transactions. However these are only for INR payments and they do not accept any International payments.

  • WilliamWilliam Member
    edited July 2015

    ItsChrisG said: Which bank is it then? Where is the link to this offer or promo?

    Banque de Luxembourg. Contact one of their reps. French/German required (UK office does not offer merchant services). Needs EU company or EU citizenship and residence as you are required to open a bank account with them (KYC laws in EU do not allow Americans to create bank accounts anymore).

  • MrXMrX Member
    edited July 2015

    William said: KYC laws in EU do not allow Americans to create bank accounts anymore

    Not true. It's just a bit more difficult now with FATCA. When FATCA first came around, many banks around the world tightened the requirements on US persons while setting up policies but this has changed now. It's almost back to normal.

  • SetsuraSetsura Member
    edited July 2015

    @William said:
    Needs EU company or EU citizenship and residence as you are required to open a bank account with them (KYC laws in EU do not allow Americans to create bank accounts anymore).

    Would it be difficult if I have EU citizenship but not residence? I wonder if just a mail forwarding place would work. I also speak French well enough so I've got that covered at least.

  • asfasf Member

    Sometimes the cheapest is to go directly with the bank in your country.
    This is just one example with one bank.

    UniCredit Bank

    Setup fee: 275 USD

    Montly fee: 27.5 USD

    VISA/MC transaction: ~3%

    For instance this is great for micro transactions.

  • MarkTurnerMarkTurner Member
    edited July 2015

    It all comes down to volume, I know that Wells Fargo offers one of our companies sub 2%, same with Beanstream. Stripe will negotiate pricing on significant volume as well as offer daily deposits.

    In Europe Streamline (Natwest?) were offering sub 2% to us on European transactions. HSBC was around 2% in HK.

    Its Volume vs Risk. Also capturing European cards in Europe, US cards in the US stops the addon % for cross-border.

    [Added]

    BBVA was cheap for Spain/Portugal and certain South American countries

  • vfusevfuse Member, Host Rep

    Cheapest I could find with public prices is icepay, 1,9% + 0.25EUR per transaction (+50-100 euro per month). Lot's of bad reviews tho (mostly in dutch)...

  • Looking it up Coinbase for accepting bitcoin payments has a 1% fee to convert from bitcoins to cash after the first $1,000,000

  • Our local bank charges us 1.7% for credit cards and €0.30 for debit cards.

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