Home – New Forums Money matters Merchant Fees too high – how to receive payments from customers?

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  • #1004892
    tildavirtual
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    I’m with the ANZ for my merchant facility. I have just the merchant facility with them and my payment gateway with eWay. So instead of using an eftpos machine I use QuickBooks or I log into eWay to process the credit card. eWay is hooked up to my hosting website shopping cart and to my Virtual Assistant shopping cart for my QuickBook software sales. Funds are deposited into my account overnight.

    When I applied for my facility it was a $49 application fee and an annual fee of $29.95 and a merchant fee of 2.95% per transaction. With eWay I had an annual fee (can’t remember now how much but they do deals all the time) and I negotiated for $0.30 flat fee per transaction. I process probably about 2 – 5 cards a month and my fees to the ANZ are about $35 while my fees to eWay are about $1.50 per month.

    Because I have a laptop and prepaid wireless broadband, I just need to be in mobile range to log onto eWay to process credit cards. I prefer to have a merchant facility because the focus is on merchant protection whereas paypal is about buyer protection. A buyer only has to make a complaint to get their money back and the onus is on you to prove otherwise to the complaint. If you provide a service like I do, how do I prove that they received my services? Outside the US also means less protection as a merchant.

    If you don’t need the physical eftpos machine, especially now when there are so many different options, I would ask about getting ePOS with ANZ or similiar with your bank. The bank can either bundle the gateway with the merchant facility or you can negotiate your own gateway with someone like eWay which then of course can be integrated with your website.

    Good luck with it.

    #1004893
    Renee Barber
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    I’ve actually found that the vast majority of my clients pay via direct deposit (with the odd few electing to pay by cheque), but I have set up a PayPal account for clients who wish to pay via credit card. So far, only one has wanted to do so. In short, unless I see a marked increase in demand for credit card payments, I definitely cannot justify setting up a merchant account.

    #1004894
    JodieR
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    I know personally i use my credit card for absolutely everything and find it very frustrating when I use a business that doesn’t have credit card facility – I don’t mean to direct that at anyone at all.. I’m just talking about me personally :)

    My banking is set up that way that it benefits me more to use CC rather than withdraw cash or use cheques. I never use cheques unless I really really have too.

    I do 95% of my bill paying after hours, so direct debits are wonderful.

    I also find that people using credit cards tend to purchase more… because they can pay it off or pay for it later. Also helps with impulse buying. Obviously I’m in a different market to a lot of you, so that may not apply to everyone.

    i find CC a huge benefit in every way.

    again… just m personal opinion, not directed at anyone, just expressing what works well for me :o)

    just another thought… with paypal… A lot of people may not feel comfortable using paypal as a payment processor if they’re not use to using it or if it’s a one off type payment or for any number of reasons.

    I’ve found many people still do not like to use their credit card online in any shape or form. But if you’re dealing with someone directly, on a more personal level or even over the phone, being able to process the card yourself is a huge benefit and possibly a convenience for them.

    Some of the banks will tell you not to bother with an eftpos machine unless your processing a few thousand a month… the Click Clack machines – manual credit card is a cheap alternative too. Although the percentage you pay is higher.

    sorry for waffling on…

    #1004895
    Renee Barber
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    Hi Jodie

    I know you weren’t directing your comments at anyone in particular, but your great insights gave me some things to think about down the track, if and when my client payment tendencies change.

    These comments were quite helpful:

    >just another thought… with paypal… A lot of people may not feel
    >comfortable using paypal as a payment processor if they’re not use to
    >using it or if it’s a one off type payment or for any number of reasons.

    That’s possibly true, but PayPal is increasingly popular around the world and is easy to use. I’m still marvelling that only one of my clients has wanted to pay via credit card since it’s also my preferred payment method.

    >I’ve found many people still do not like to use their credit card online in
    >any shape or form. But if you’re dealing with someone directly, on a more
    >personal level or even over the phone, being able to process the card
    >yourself is a huge benefit and possibly a convenience for them.

    If people sell products, see people in person, have a lot of phone traffic, etc., this would absolutely be true. It just hasn’t been part and parcel of my business thus far.

    I guess what I said in the previous paragraph is the bottom line is: we all have to do what works for our respective businesses/clients. When it stops working, then we’ll have to make a change.

    #1004896
    competitions
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    I think what Jodie said about “impulse buying” is the point.

    The market that Jodie is in probably appeals to the emotive side more, so more impluse buying whereas Renee’s market is probably not impulse but more thought before purchase.

    People are more inclined to use cards on impulse purchases so who you are marketing to is a deciding factor as to what purchasing mechanisms you offer.

    Would that be fair to say?

    #1004897
    RobMorris
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    KarenC, post: 3914 wrote:
    I disagree that banks aren’t interested in small fry … I have been a merchant for 20 years and I am solo. The bank charges monthly for the facility so it’s not so important whether I make sales that month by cc or not. My merchant fees are $10 per month for the facility, $16.50 for the electronic Eftpos machine, and 0.73% of transactions. ]

    KarenC could you recommend your merchant provider by name please so I could apply with them. I am starting a new business and want to get the best price as we all do.
    Thanks Rob Morris

    Sorry didnt read the thread all the way then got excited and posted of a request, thanks

    #1004898
    toddo
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    martin,

    you can try http://www.paymate.com

    they take payments via credit cards and do the authorisation. i believe they take 2.5% up to $5K a month in transactions. no set up of account by the client.

    Cheers

    #1004899
    RPL
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    marsmac, post: 3880 wrote:
    I want to make it easy for customers to do business with me but merchant fees are high for a small start up business.

    I recently was sent a link to Tyro who have a transparent, flat rate pricing for EFTPOS and scheme debit cards.(Thanks Astrid!) Currently they only have a point of sale terminal operation, and as far as I know, no immediate plans for a browser based web application, but it is in their future plans.

    If your business has an EFTPOS terminal system, then these guys are definitely worth a look. I don’t have the background in this field, so if you might like to check it out and comment, I’d appreciate it.

    ps I did notice E-Way have dropped their setup fee of $599 in an offer that expires 30 April 09….sounds interesting, but would need to move fast..

    regards,
    Richard

    #1004900
    jeremy886
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    Hi Lai,

    I saw your post and called CBA yesterday (wanting to get Evolve). After waiting forever, I hung up my phone.

    I got a website called securepay from a IT geek site. (http://www.securepay.com.au)

    My situation is that most of my jobs have been from agencies so I don’t need to take care of any transactions. But now I want to get clients by myself and so far probably a handful of transactions (or nothing) a month so I cannot justify any on-going monthly fee.

    Currently I send my clients invoices and ask them to pay through their online banking. It is riskier because I deliver my services before getting paid but so far most people have paid eventually.

    But the biggest problem is being unable to close the deal right away. I worked for an agency before and I noticed how very important it is to get your clients to pay when they are willing to pay. If you let them go, they may find other companies or postpone. (In my own case, I will probably drop CBA and choose securepay).

    I expect my future clients to pay over the phone or send/fax in credit card payment forms. So I find the securepay’s pricing very attractive (see below). Please let me know if there is any better deal for Small Business beginners.

    Virtual POS Terminal
    $125 per annum
    60 cents per transaction

    I will guess I will use free Paypal online until I establish significant amounts of cash flow.

    marsmac, post: 4240 wrote:
    Hi all,

    It’s $79 establishment fee, $20 minimum merchant fee, $28 yearly admin fee and 1.45% merchant rate.

    After setup, you pay $20 per month merchant fee (minimum) and a yearly $28 yearly fee.

    PayPal

    No setup fee, pay for what you use. Pay 2.4% + $0.30 for each transaction.

    #1004901
    King
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    sadly most replies have missed the original question (how can you do business if you don’t listen properly to the customer’s problem!!) – that is alternatives to bank merchant services.

    It does not matter about eway or secure pay, you still need a bank merchant account to use them.

    Talk of eftpos terminals and online authorisations are also off the question.

    So from my recent research for alternatives to banks, look at Moneybookers.com (based in UK) Hit them for a better that published rate. They do the CC processing and deposit into your account

    #1004902
    digital.hybrid
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    marsmac, post: 3900 wrote:
    What I have discovered is that unless you are a business racking up a solid number of electronic transactions, or high $$$ worth, then the banks don’t cater for your business. Its not in their interest to support small/start up businesses unless you can afford it.

    That’s not entirely true. We’re a small start-up and we’re with Westpac Merchant Services and have been given an outsanding deal. Only 0.99% per transaction and $22.00 a month minimum participation fee.

    The thing is, we arranged a PayWay API account so that all of our transactions are done directly with the bank from our secure sites, so we have no need of services like eWay.

    We’ve also been very careful to put really obvious notifications on each of our sites about how the charge will show on the statement, because the company name is different to the site name. We’ve placed those notifications right at the point of payment and right near the payment button itself so it can’t be argued by a customer that they didn’t know about it.

    As a result, Westpac have given us a dispensation and are allowing us to use one merchant account across as many as a half a dozen sites at the moment.

    But the big point of all this is … I shared our vision and our business plan with our account manager ahead of time, and because he could see the big picture, he worked with us to get us the best deal possible.

    I couldn’t be happier. So really, if you can’t afford $22.00 a month to have a merchant account, don’t even consider it. PayPal is the only way to go if that’s the case.

    Kerry

    #1004903
    King
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    digital.hybrid, post: 26099 wrote:
    That’s not entirely true. We’re a small start-up and we’re with Westpac Merchant Services and have been given an outsanding deal. Only 0.99% per transaction and $22.00 a month minimum participation fee.

    The thing is, we arranged a PayWay API account so that all of our transactions are done directly with the bank from our secure sites, so we have no need of services like eWay.

    We’ve also been very careful to put really obvious notifications on each of our sites about how the charge will show on the statement, because the company name is different to the site name. We’ve placed those notifications right at the point of payment and right near the payment button itself so it can’t be argued by a customer that they didn’t know about it.

    As a result, Westpac have given us a dispensation and are allowing us to use one merchant account across as many as a half a dozen sites at the moment.

    But the big point of all this is … I shared our vision and our business plan with our account manager ahead of time, and because he could see the big picture, he worked with us to get us the best deal possible.

    I couldn’t be happier. So really, if you can’t afford $22.00 a month to have a merchant account, don’t even consider it. PayPal is the only way to go if that’s the case.

    Kerry

    can i ask what ballpark figure you put through? .99% is incredible. We ask for a quote at one bank on an estimated $150,000 credit card turnover and the best was at least double that.

    #1004904
    digital.hybrid
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    King, post: 26103 wrote:
    can i ask what ballpark figure you put through? .99% is incredible. We ask for a quote at one bank on an estimated $150,000 credit card turnover and the best was at least double that.

    To be honest, at the moment it’s not nearly as much as I’d like, but that’s because we’re a start-up and have invested almost everything into establishing the services and don’t have as much as we need left over for marketing.

    We received this rate right from the outset, without ever having put a transaction through. I’m convinced it was because our Account Manager could see the potential growth in our VoIP services, in the hosted Exchange 2010 service and the range of others in our growing suite.

    I’m personally a 30 year veteran of the broadcasting industry, and from that we’ve also developed and sell a software program for use by radio journalists in their newsrooms (http://www.newsworx.com.au), and because that product has global potential, coupled with all the rest, I believe he saw the same potential as me.

    In my initial call to the Westpac Merchant Services, I ended having an hour-long conversation with my original Account Manager, shared our vision, and that’s the rate he came back with, locked in for a 3 year minimum. And my new Account Manager is just as good and sees the same potential.

    I wish I could tell you it was about the turnover, but in this case, I think it was a small businessman’s vision for his company that seemed to have won the deal.

    Kerry

    #1004905
    King
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    digital.hybrid, post: 26105 wrote:
    To be honest, at the moment it’s not nearly as much as I’d like, but that’s because we’re a start-up and have invested almost everything into establishing the services and don’t have as much as we need left over for marketing.

    We received this rate right from the outset, without ever having put a transaction through. I’m convinced it was because our Account Manager could see the potential growth in our VoIP services, in the hosted Exchange 2010 service and the range of others in our growing suite.

    I’m personally a 30 year veteran of the broadcasting industry, and from that we’ve also developed and sell a software program for use by radio journalists in their newsrooms (http://www.newsworx.com.au), and because that product has global potential, coupled with all the rest, I believe he saw the same potential as me.

    In my initial call to the Westpac Merchant Services, I ended having an hour-long conversation with my original Account Manager, shared our vision, and that’s the rate he came back with, locked in for a 3 year minimum. And my new Account Manager is just as good and sees the same potential.

    I wish I could tell you it was about the turnover, but in this case, I think it was a small businessman’s vision for his company that seemed to have won the deal.

    Kerry

    Even more amazing if you have no proven turnover. Our rate was based on accepting payments based on an existing contract, but by cc instead of cheque.

    Well done!!

    #1004906
    MarkGishen
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    Hi all

    I usually invoice my clients for services and they usually pay by direct deposit. However, a few have asked me if I can accept credit card payment. This is likely to be only for specific clients but may occur several times throughout a project. It may only be required once or twice a year, or every two years.

    After checking with my bank about the merchant set up fees (which seemed exorbitant for the purpose), and some web searching I registered with PayPal (standard). It’s a great option it seems as I can send out invoices that have links for either credit card or PayPal account payment. All went well for the first invoice, but not for the second, as the client was prompted to register for PayPal – something they did not want to do. After many emails to PayPal it seems that this is the rule – the client can only use a credit card for one payment without having a PayPal account.

    Can anyone provide me with advice to solve this problem? What is the best option when I only need to take credit card payments very rarely?

    Cheers, Mark.

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