Bit of a tangent: my first "traditional" merchant account provider processed 6 times PayPal's volume last year ($1.2 trillion), and charges as little as 0.09%+$0.30 for debit cards versus the 2.9%+$0.30 flat rate all these 3rd party processors start at. Why do so many startups write off going straight to an ISO/MSP? Or do they, but Stripe/Braintree make better offers? They don't all have BS fees, and flat markups over interchange are becoming the norm for pricing. Popular payment gateways like Authorize.net have drop-in libraries for just about any language or shopping cart you can imagine.
The same as debit: interchange plus 0.04%+$0.10. Even though I sell mostly B2B, Visa debit cards make up over 25% of my transactions, all at 0.05% interchange. Interchange on CNP credit ranges from 1.6% to 2.8%, but most cards are closer to the low end.
There are no extra fees for Amex/Discover, and "unqualified transactions" (which is nothing but commercial purchasing cards sent to the gateway without line-item info) are <5% of volume over the past 12 months.
The MAP charges $15/mo in fixed monthly fees, which includes paying for a 3rd-party for PCIDSS compliance (the SAQ and quarterly scans). The payment gateway costs an extra $20/month I think. Regardless, the savings on transaction fees pays for them immediately.
No, they gave me that rate when I was doing just a few thousand a month in volume, before I launched my current SAAS business and switched off PayPal subscriptions. I'm getting that through Vantage now. I used to use FDIS, which initially gave me similar rates, but they had a habit of adding new fees every month which is why I switched to a processor that does interchange-plus instead of a rate table.
I happen to have this picture I took for someone else that didn't believe me a few months back. This was the rate sheet in the paper application I signed to open the account.
Do you think there is a value to the somewhat ubiquitous use of paypal in the consumer online space in that many customers have paypal accounts? In the sense that it is a bit more frictionless? I can see how a B2B market might be different.
