Current state of micro payments / selling low cost/unit items

[haxman04596]

[haxman04596]

Hi stdunbar,

Thats pretty much the way it works.

We have many customers in this exact situation - in fact, most hosting companies are in this exact situation.

Best advise I can give you is factor in the cost of transactions into your selling price.

Hope this helps...

Andrew

[haxman04596]

[haxman04596]

Part of the issue is that each credit card transaction does have a hard, out of pocket cost, to the acquiring ISO/Bank.

There are Visa & MasterCard interchange costs, dues and assessments and network per transaction costs.

So on a $5 sale, you could be easily look atleast 6% in hard cost to a processor as a rough ballpark when you factor in all of the above.

Thus, if you look at a solution that costs only you 8%-8.5% effectively... that's not necessarily a bad deal. And there are only so many ways that something like this can be structured to cover the core banking & network costs that exist.

One thing that you may want to consider is offering a bundled package whereby a customer can get a bunch of documents for a higher price. But in terms of the micro/smaller payments, there isn't a whole lot that can be done to escape the core costs that really exist in the system. (beyond setting up user accounts where they "pre-fund" a certain amount to be used to buy micro ticket items)

Also... not only do you want to look at the % and per trans fees, but also ask about all other costs. Check out the monthly costs and any setup costs or annual fees that apply, as well as any termination fees/policies that exist.

[flki758]

http://www.pay-line.com/

[zune818]

I'm not sure how pay-line would answer this person's concern.

In fact, their $1 per trans cost on a $5 item would represent a 20% cost structure PLUS the 4%... so it would end up costing around 24% on a $5 sale vs. the 8-9% discussed earlier in this thread.

[flki758]

8-9% is not a bad deal. Considering this is all charges and the funds are in your merchant account within a few days. Handling payments is always going to cost, even with cash and checks you have to factor the bank charges, the delays, the risks and the way of paying the items into the bank.

On a side note, Worldpay charge 4.5% however there is a WorldAlert charge of 10cents per transaction too iirc. Too late to do the maths over here, it's Friday night and I'm not at the pub

[flki758]

Pay-Line guys here

Chris is right, at the moment we can not be compared to 2.25% +$0.30 fee for micro payments. Ours is more expensive.

We will be making several changes to the discount rates to challenge our competitors a little and give you guys more choice. Rates for sales up to $10 will be decreased as well as rates up to $60. There will be no changes in maintenance or setup fees. I hope this is not concidered as an ad, I am trying to be informative.

Pay-Line.com guys