
PayPal Upgrade Calculator - sachinag
http://transfs.com/paypal-calculator
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jasonkester
Wow, that's pretty.

I like this sort of advertisement. It's just a useful thing that people using
PayPal will discover at some point and start playing around with. Naturally,
they'll realize that they should get themselves a merchant account and... hey
whaddayaknow, that link up at the top takes me to a place where I can get one.

I think the earliest and most successful implementation of this idea was that
"What's your political affiliation" test from the 90's that framed all the
questions so that you'd end up discovering that you were a Libertarian. Who
knew? Better follow this link that tells me who I should be voting for...

~~~
leftnode
Exactly, I love this type of advertising. It's useful, pretty, non-intrusive
and works well. It's the same way Mint advertises by having large
infographics. They're pretty to look at and advertise Mint at the same time.

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maushu
Of course they forgot to add an "I'm outside of the USA." checkbox which would
always make paypal the winner.

Just my small rant.

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dchest
Of course they forgot to add an "I'm outside of the USA, and PayPal doesn't
work in my country" checkbox which would always make PayPal the looser.

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karsa
The do not mention:

1) You will need to be PCI compliant (cost 2k +) 2) You will may need to spend
30 days going through due diligence 3) You may be considered high risk and
have to pay much more 4) You may have a high rolling reserve (up to 10% for 6
months). 5) You will need to redesign according the merchants API, while
paypal is pretty much 1,2,3. 6) You will probably be not taken on if you have
no previous history...

~~~
seanharper
Yah, getting a merchant account is a pain in the butt, but I think you are
overstating it a little. The jury is out on whether merchant accounts or
paypal have more onerous reserves.

There is a wide ecosystem of payment processors that like to sign up startup
ecommerce businesses. Note, your local bank isn't included in that group, they
probably won't want you as a customer.

If you use tokenization or recurring transactions and don't store the card
data on your local server (same situation as paypal, btw) PCI requirements are
very minimal and won't cost you anywhere near $2k.

~~~
karsa
Note: I am one of the people who have moved away from Paypal, I have become
PCI compliant (which I did myself for 250 euros) but this I think would really
cost 2k plus for any company. It took me a week to navigate. I ended up
setting up a simple solution for others to help them efficiently with this
<http://www.pcicompliancesaq.com>

However, the whole process was tedious, I went all the way through due
diligence which took about 4 weeks with one merchant who then wanted a 5.25%
rate plus about 500 month in fees.

I finally found a sensible merchant who offered me 3.5% and sensible rates,
who I am extremely pleased with, their support is great and now I'm through
the other side I am very pleased I have.

The payment gateway is much quicker and smother than sending clients to Paypal
and then having them be returned to my site (which in a small % fails because
clients interrupt the process needing me to manually configure).

But all in all it's easier to start your company with Paypal then move to a
merchant account later when you have some trading history and the time and
resources to invest.

But don't be under the impression that you will get going as simple as you did
with Paypal.

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ladyada
This is misleading. The 1.9% interchange fee is going the MINIMUM of many many
different interchange fees especially Amex's and the vast number of 'rewards'
cards. For online 'e-retail', expect at least 2.5% as well as many new and
exciting monthly fees that have been recently added by visa/mc and your
processor.

Going with a merchant account probably wont save you money, but it does
increase your purchase rate since many people may not have a paypal account
and don't want to deal with getting one.

~~~
jsankey
_Going with a merchant account probably wont save you money, but it does
increase your purchase rate since many people may not have a paypal account
and don't want to deal with getting one._

Actually you don't need a PayPal account to buy via PayPal -- you can use a
credit card. However, this message does not always get through to the
customer, and PayPal can be picky about some cards (or vice-versa).

~~~
ladyada
Its been a while, but I recall that you -do- need to make an account - it gets
created when you make your first purchase. But having to send people off to
another site (where they get to reenter all their address info -again-) is a
PITA and is not as 'professional'. Its getting more common... but if you made
it through the hassle of getting a merchant account there is a bit of
respectability there.

Also, we have encountered institutions (schools and businesses mostly) where
there is strict policy that they may not use paypal.

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gbhn
When I did some website commerce programming a while back, the merchant
account we had came with a monthly fee that for many just-starting situations
would be a sizable fraction of the total fees ($70/mo or so). Perhaps this has
changed, but it isn't accounted in the app.

I was struck by how close the levels were until revenue gets quite high. The
convenience of Paypal probably wins in most cases until the mid-to-upper six
figures.

~~~
seanharper
The average monthly fee (including gateway) on the transfs marketplace is $16
/ month, which is included in the calculation (try putting the volume slider
to $0). Likewise, Paypal Pro (which you need if you want to accept payment
without sending the user off-site) has a $30 / month fixed fee.

Of course there are certainly crooked merchant account providers that will
hose you with bigger monthly fees, so it pays to be careful. The last thing a
startup needs is extra fees.

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portman
PayPal has a "micropayment" option where the transaction fee is only $0.05.

<https://micropayments.paypal-labs.com/>

This changes the equation at the low end ($1 and $2 transaction sizes) and
makes PayPal come up extremely favorably when compared to the merchant
account.

I understand the point of this site is actively encourage people to switch
away from PayPal, but in the interest of fairness, it would be nice if the
author factored in the micropayment rate when you move the slider to $1.

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seanharper
This says "paypal upgrade calculator", which makes it sound more biased than
it really is - it's actually a very fair comparison.

~~~
mmelin
Yeah, but the premise is that people start off with Paypal when they have low
volume and this calculator helps them figure out when they should be starting
to look at "real" merchant accounts. I'm pretty sure the number of people who
willingly go from merchant account -> Paypal is close to zero.

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aresant
Rates are important but not everything.

In PayPal's court, they don't have a merchant reserve - typically your
merchant account will require 5 - 10% of your monthly processing to be held
for up to 6 months after your last transaction is processed.

On the other end of things most Merchant accounts offer substantially better
chargeback resolution, customer service, and flexibility.

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invisible
So pretty much: if you make >= $1,000 from a site you should use a merchant
account (if the amount is really close to $1,000, you may want to use Paypal
if the transaction amount is above $10) otherwise you are better off with
Paypal Standard.

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thinkcomp
Can't resist... FaceCash (<http://www.facecash.com>) is cheaper than both
options at 1.5% flat, though we haven't launched an internet payment solution
yet.

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KevinMS
Couldn't work for me because I use the micropayment mode in paypal and charge
$2. Both of those don't seem to be options.

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smokinn
It's pretty buggy.

It refuses to update if it'll cost you over 100k in fees. Try an average
transaction size of 3$ and a total monthly volume of 1,000,000$ for example.

If you're going to provide a slider with only a few pre-set values you should
at least support all its combinations.

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ten7
Who do you know does $3 per user with $1M per month?

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smokinn
That's hardly the point.

If you're going to make a mini-app and don't want to support certain values
just don't make them possible rather than have buggy/wrong behavior.

If at least both refused to update it would be a little better than now where
one of the prices can update with the other staying the same and thereby
throwing the comparison completely out of whack.

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bdickason
I put together a google docs spreadsheet that is similar but built for
subscription startups:

[http://spreadsheets.google.com/ccc?key=0AumfOxrn5FGtdEN5U21L...](http://spreadsheets.google.com/ccc?key=0AumfOxrn5FGtdEN5U21LTks4QzFnTHBNZDhCaThZSHc&hl=en)

You enter your subscription tiers (3 by default) and what percentage of users
will choose each tier.

It spits out projected revenue, Braintree fees, paypal fees, and then adds
Spreedly/Chargify into the mix so you can switch seamlessly.

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midnightmonster
Sliders are nice large targets and look very touchable, but don't actually
work at all on my iPad.

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boredguy8
$3 / transaction @ $1m volume shows PayPal as cheaper. I think it's an
overflow error.

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pjeide
I saw the same thing. <http://twitpic.com/211wd7>

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Suekhim
Cool.

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borism
So this is essentially somebody whom I never heard about charging the same
price (ie 478 vs 500) that PayPal does? Why am I supposed to chose them now?

