Hi,

I have two main clients. One pays via a wire transfer (international) and the other pays by check. This works fine so far.

A third (new) client wishes to pay by credit card, and there are very good reasons for them to pay this way and for me to accept the payment using this method.

Question - What are your experiences with credit card processors ?

If I go through this process, it makes sense to just setup my web site to accept CC payments and be done with it.

The merchant bank / processing firms all seem to want about $ 25 + / month for gateway fees, another $ 25 + / month minimum transaction fees, and another 10 + / month for a "statement" fee, plus some other extras tacked on + 2 - 3 %.

The good news is that they are professional about it, and I am highly likely to actually get my money.

The other options I found so far are
- Paypal - no (obvious) monthly fees, but lots of transaction fees, and I have some not pleasant experiences wtih them, so they are a definite - second place to anything else reasonable.

- Amazon payments - Fees similar to paypal, but the customer MUST register with amazon and they only process domestic credit cards. Seems like this is just silly as it means I would have to turn down someone in Canada or similar who might want to buy something from me.

Anyone have any other suggestions ?

Thanks

Harry

Don't know about down in the US, but in Canada, if you are a member of the Canadian Federation of Independent Business, you can get somewhat better rates on setting up merchant accounts with a bank. Guess you could look up the NFIB down in the US and see what they say. Typically, they ask for a couple of hundred dollars a year for a membership fee, so you'd have to factor that into the cost of doing business.

Get a membership at Costco and try their service. I don't take cc's but I know of a few people who use Costco and the are happy.

Gary

Hi - Thank you both for the advice.

I am already a costco member, so that is an interesting lead I had not thought of.

NFIB - I will also look at that one.

Once I figure it out, I will report back.

Take care

Harry

Do check out the Costco Credit Card service - I believe you have to be an Executive member to do this, but the fees are about the best you are going to get anywhere.
Also their website service has fantastic rates. I'm an executive member just for their website service as it saves so much money and I convinced a friend to do the same just for the credit card services that he makes use of.

For a low $$ volume business, paypal is not good, but not bad either. In my experience their fees are about 5%. Not a bad way to start.

You should check with your local banks (especially ones that specialize in supporting small businesses), your businesses bank, and any local groups you are members of (Chamber of Commerce, Kiwanis, other networking groups, etc) and see who others in your area use. Even make friends with some competitors. We all like to lower our overhead while getting reasonable service. We are customers too.

Once set up, figure you are going to stay with them a while. Every couple of years checking the 'temperature of the market', like shopping for insurance, is a good thing. I don't suggest jumping unless you have a reason (economic, service, etc) that you can't work out.

Let us know what you find out.

If your volume is low and not involving much money paypal is probably the least expensive and easiest to set up.
I use paypal for my business, they charge me $30.00/month and 2.9%
No contract, no minimum, you can cancel and start up again very easy.
I looked into Costco and the contract was for 2 years, percentage was 3.2% for "web portal" card processing. Plus they do have a minimum fee of $25.00/month.
This was last year so might have changed but would cost more money.
If you only have the 1 client you might work something out so it's cheaper by canceling paypal and starting up when you need to process their card.
I process about $10k yearly from about 5 to 7 different clients so with that low volume makes more sense for paypal.
If you find a cheaper route please let us all know.

I use paypal for my business, they charge me $30.00/month and 2.9%
No contract, no minimum, you can cancel and start up again very easy.

You can also accept cc's through PayPal using Quickbooks or Outlook - no monthly charge but you pay 2.9% + $0.30 per transaction.

Gary

I sell on ebay and have a business account with PayPal....I can accept checks and credit cards. Merchant Account Services (http://www.merchantaccountsllc.com)

Google checkout could perhaps be an alternative: http://checkout.google.com/support/sell/bin/answer.py?answer=134420&topic=8664

Hi harryn

I did not see anybody say to use online banking this is by far the best & most of the time there are no fees at all next thing I would use is PayPal (I use both) thay charge just under 5% per charge (so you add 5% to your bill) To have a credit card machine is to much money for a small business unless you are going to use it a lot like more than 160 times per month

Hi, I am just updating this thread with what I have found as I go along.

The interesting aspect is how important it is to the credit card company "what is your business like, typical transaction, etc".

In my case, my business is Business Development Consulting, so when I bill a customer, the service is usually already rendered, they have received an invoice, and they are just paying the invoice. In this case, the odds of a "reversal" are very small, since the customer just would not pay at all if they were unhappy.

They also are very sensitive to loosing business to paypal, so if you tell them you are just comparing them to paypal, they tend to be a bit more flexible - at least that has been my experience so far.

My clients in the EU mostly pay via wire transfer, which costs me a flat $ 50 for the wire transfer + $ 10 of bank fees. My client ensures that I am paid at the invoiced rate in US dollars. (If I were a little smarter, I would have done the deal in Euro when the exchange rate was $ 0.90 per Euro)

Paypal fees based on my expected useage:

Paypal Fees (from their web site for Business Users)

Setup fee = 0
Gateway monthly fee = 0
Monthly batch fee = 0
Monthly statement fee = 0
Monthly Transaction fee (fixed) = $ 0.30 per transaction
Transaction fee (variable) = 2.9% for transactions up to $ 3,000.
Currency conversion fee (fixed) = 0.30
Currency conversion fee (variable) = 3.9% for transactions up to $ 3,000

Example Month Transaction

No transactions = $ 0.00 per month

1 transaction for $ 3,000
- Fixed transaction fee = 0.30
- Variable transaction fee (US purchase) = 2.9% x 3,000 = $ 87.00
- Currency conversion fee if International (fixed) = 0.30
- Currency conversion fee if international (variable) = 3.9% x $ 3,000 = $ 117
- Currency conversion rate relative to market conversion rate = unknown

Estimated total fees for an International transaction of $3,000 = approx US$ 215 - almost 2.5 X the cost of a wire transfer.


Prior experience with PayPal protecting the seller from fraud = poor

Prior experience with PayPal communication and attempting to understand situation = very poor

Ease of setup and use = simple

In other words, the primary benefit is that you do not have monthly fees if there are no transactions.

One thing I highly recommend is that if you are going to accept credit cards, and especially if you are going to accept PayPal, make sure you set up a separate, independent, dedicated bank account JUST FOR THIS or they can really screw up your entire bank account.

Coming in a few days - amazon pay, google pay, costco update, microsoft money (remarkably, it is worth looking at)

Hi harryn

I did not see anybody say to use online banking

Hi, I am only planning to accept the credit card transactions via on-line through my web site. There will not be a card reader machine at all.

So far, I have not seen a price break for "just on line" vs "credit card machine" transaction, but in any event, I don't want a machine.

BTW, very few customers will allow a person to just "add on" 5 % to a transaction in order to accept the CC or paypal. I think technically, the CC companies actually require you to agree that you will not do this. This is why you see many businesses that will not accept discover - they percentage transaction fee is nearly 2X visa.

One thing that I find particularly annoying is that Canada is considered an "International Transaction and subject to these fees".

I hope no one minds my thinking like this, but I grew up in N. OH and we used to routinely go fishing along the St. Claire river. We had to have the right fishing license, but you could fish anywhere and go to lunch on either side of the river and no-one thought twice about it.

Of course we knew that Canada is its own country, and we were just visiting, but I always viewed it more like visiting my Uncle's house - you knocked before entering, but everyone always smiled and let you in.

There has been extensive trade between Canada and the US for longer than there was a Canadian or US Govt - so why charge double for the transaction ?

Sorry for the ramble - I just miss the simple border crossing experiences of the past.

One thing that I find particularly annoying is that Canada is considered an "International Transaction and subject to these fees"......
.....
Sorry for the ramble - I just miss the simple border crossing experiences of the past.

We deal with customers on both sides of the border and there is no distinction between Canadian and U.S, customers with regards to credit card fees; I just confirmed this with my Financial Comptroller. (Aka, my wife :))

What credit cards do you accept? We take Visa, Mastercard and (I think) American Express.

I also miss the simple border crossing experience.:)

Hi Goef, so far, we have not been set up to accept credit cards at all. I am just getting started in that aspect as one of my clients wishes to pay using a visa or mc.

This thread is my way to help make a reasonably intelligent choice based on the small number of transactions I am expecting.

The "simple choice" - paypal - charges about 2X the fee for an international transaction. In my example transaction, it would be $ 87 for domestic PLUS an additional $ 117 to sell international (currency conversion fee).