Currently, I use PayPal for all online transactions -- and I am quite happy. That said-- I noticed that a bulk shopping group that I belong to offers merchant credit card processing and I was thinking of using the service with my hosting [hosting-q.com] and business directory services. The processing service is with Costco and a bit cheaper than credit card processing with PayPal-- if integrated on the site [I currently only use the PayPal shopping cart service]. Anyone using it? Feedback? PayPal offers invoicing and a lot of the services I use-- also use PayPal so I will not be discontinuing my PayPal business account-- however am looking at ways to cut operating costs and streamlining the transaction process. Q...
As far as cost goes, costco is not going to be cheaper than paypal. Costco currently charges 1.99% + $.27 / transaction for qualified transactions. What this base rate doesn't include is that you also pay downgrade charges, a monthly statement fee, and a monthly minimum if you don't have at least $20 in processing fees each month. This is a decent rate, but at the end of the month, it's most likely going to be about the same to slightly higher in cost than paypal. I think that it is a good idea to use a traditional merchant service provider, but I think that it is also a good idea to use Paypal a well. There is a number of shoppers that prefer to use paypal, so getting rid of it completely may lose you some customers. Alternately you are probably losing customers right now by only accepting paypal so offering both is always a good idea. The best bet for most US based businesses is to offer direct payment through credit cards, and then offer alternate payment using paypal, google checkout, echecks, etc. The good thing about Google checkout and Paypal is that they have no fixed monthly cost, so they can be offered along with other payment methods and the only fixed cost is what it takes for you to get them integrated into your website.
Jestep is absolutely right. As for the costs of merchant accounts, they are always a little bit more expensive but your business will most likely grow even more by accepting credit cards directly as well.
As long as the mergers go through OK, Costco uses Nova which is the second largest transaction processor (I beleive) in the United States. Most of these gateways (Quantum, LinkPoint / YourPay, Authorize.net / Cybersource, Payflow, Yahoo!®, etc) that will connect to a transaction processor (First Data, Nova, etc). Some of the transaction processors that have a relationship with the issuing bank and acquiring bank can complete the transaction instead of sending it to the card associations (Visa, MasterCard, American Express, Discover, etc). You might even remember the lawsuit that Visa was suing First Data because Visa was getting cut out of a lot of the transactions because First Data was completing the transaction. Fortunately, that was settled. What you need to look for in those "cheaper rates" is the mid-qualified and non-qualified rates. For example, some gateways might not automatically batch every night and require you to do it. Or the time the batch goes through is more than the specified time and the transaction is downgraded. This might cost you 2% more or so on the transaction. Now, if you are in the United States, there are some very important pieces of information must be on an ISO / MSP / Agent's website. Let's take a look at CDG Commerce's web site and look at their footer: This tells you CDG is a registered ISO/MSP and what bank he is with. An agent will have something like "independent agent office" with a certain ISO. You might even look into the other options that Paypal provides for certain merchants. Sometimes a merchant account will be better - not because it is cheaper, but will save you time. If you are in the United States, you have a number of options. Getting a merchant account is pretty good if you are doing more than $1,000 a month. One of the bigger reasons is getting your money. Some think this is not important but I have to object. Getting your money is usually the best thing, right? And with a merchant account, your money is deposited into your bank account within 48-72 hours usually after the batch is completed. If you do the math and look at what you might earn if the money if in your interest bearing account you might make money with your money.
I thought they [Costco] waived the monthly fee if you had an Executive membership. The reason I have not yet integrated the shopping cart [PayPal] directly on site is because I cannot justify the PayPal monthly fee. Using Costco would solve that issue? Thanks for your responses. There are a lot of great solutions out there -- and right now I am looking for something I can afford-- and combine the many benefits of the PayPal service. Q...
Most companies will charge some type of a fee. The electronic payment gateway might charge a monthly fee and then a transaction fee. The gateways are charging a fee for their services. The merchant account provider might charge some type of a fee - but it is a fee to help them stay in business. Similar to hosting companies charging a fee, etc. If you are doing 100 transactions a month, at $100 each, that's $10,000.00. Whatever monthly fee is usually "chump change". But the real benefit is you do not need to contact anyone for your money or wait for your money. It is usually deposited into your account 2-3 days later. Even $30 a month is just a dollar a day - I guess you need to look at it like this: is $1 enough for your time going having not to sign into a website to request your money. And is $1 enough to wait a few more days to get your money? Usually yes, because you can sometimes get your money 2-4 days sooner which can make a big difference in the way some companies run
The executive membership waives the statement fee and the application fee. There is still the monthly minimum, which is the difference of $20. For online sales at 1.99% this would be negligible at about $1005 in credit card sales per month.
CDG merchant services are really good. I am using them and with no gateway fees and free fraud protection suite.