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Payment Processor

Posted on 2016-07-24
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Last Modified: 2016-08-22
Hi,

I have been using Stripe for the last few years but I find them too expensive, as they don't put a cap on their fees. One of my clients processes €5,000 payments with a fee of €120.

01 - does anyone know of a cheaper payment processor?

02 - I presume it is very difficult to build your own... regulated by the bank, PCI compliance, etc.?
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Question by:oo7ml
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Expert Comment

by:Jackie Man
ID: 41726484
Can you give a breakdown of your $120 fee?

What is the average amount of your transaction?

There are not many choices.

Braintree might be a better alternative as they only apply the standard rate when your monthly transacted amount is over $50k.

https://www.braintreepayments.com/braintree-pricing
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Author Comment

by:oo7ml
ID: 41726489
Thank you.

Braintree is still very expensive.

2.4% of $5000 = $120
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Expert Comment

by:John Hurst
ID: 41726491
The overall fee (2.4%) is only a bit high. We have done a bit better with Global Payments but I think that is higher volume than you are talking about. Your fee probably reflects lower volume.

Q2. Not a chance. Bank compliance is an expensive and time consuming process (more than 6 months if you can get it correct on the first try).
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by:John Hurst
John Hurst earned 83 total points (awarded by participants)
ID: 41726494
In terms of payment processors for the example above, you are talking about $20 (or 20 Euros) because getting below 2% requires very high volume and perhaps some negotiation .
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Author Comment

by:oo7ml
ID: 41726501
Yes, but even paying $50 (1%) for one transaction is far too high.

The work involved in processing $5 vs $5000 is the same so there should be a cap.
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by:John Hurst
John Hurst earned 83 total points (awarded by participants)
ID: 41726505
You will not get a 1% fee, Cannot happen.  Bank draft fees are as high or higher except they might be capped. Wire transfer fees are very expensive.

Even credit card fees are 2% or more.
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Author Comment

by:oo7ml
ID: 41726510
So do Stripe pay the bank and credit card companies some of their fee?
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Expert Comment

by:John Hurst
ID: 41726538
I do not know for Stripe, but in general, every middleman takes their cut.
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Author Comment

by:oo7ml
ID: 41726550
Ok, thank you.
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by:Dave Baldwin
Dave Baldwin earned 83 total points (awarded by participants)
ID: 41726724
My main client was whining last night that Paypal is increasing their rates to 2.9%.  He also keeps saying that Braintree is the processing arm of Paypal.
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Author Comment

by:oo7ml
ID: 41726746
So PayPal plan to increase their fees?
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Expert Comment

by:John Hurst
ID: 41726747
It will probably depend on volume how much fees go up. Competition works to keep fees down.
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Jason C. Levine earned 251 total points (awarded by participants)
ID: 41728584
Competition works to keep fees down.

And collusion between the banks and gateways keeps them up.  This is not a battle you can win, don't even waste the energy to fight it.  Find the best rate for your volume and go with it but expect to pay at least 2.5-2.9% for this stuff.
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Author Comment

by:oo7ml
ID: 41728947
Thanks.

We (Europe) only page 1.4% with Stripe which is good, but it still doesn't make large transactions feasible through online payments.
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by:Jason C. Levine
Jason C. Levine earned 251 total points (awarded by participants)
ID: 41728962
This is just the way it is.  You pay the percentage or don't take credit cards.
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by:Jackie Man
Jackie Man earned 83 total points (awarded by participants)
ID: 41728980
Large transactions are subject to more rigid compliance issue in order to control money laundering.
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Expert Comment

by:Jackie Man
ID: 41755349
Well thought answers which should help all members.
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