Wednesday, August 18, 2010

PayPal Merchant Account Reliability

Frankly, over the last month, my Paypal Merchant account has been a lot less reliable than I expected. I keep getting this message:

History Search is currently unavailable. Please try again later or call us at 866-837-1851.

Sometimes Paypal gives me a security message about verifying the ownership of my account. I called once but it was time-consuming. Usually, I just wait a few hours until the message disappears.  IS the paypal merchant account getting flaky?

Tuesday, August 10, 2010

Passing the credit card expense directly to the consumer

I wondered if some company would start passing the cost of credit card processing onto the consumer. I just paid a bill online and it appears, although I'm not sure, to be the first time that I've seen someone pass the credit card expense directly onto the consumer. I notice that they don't take Visa, does Visa refuse to participate?

Thanks for making your tuition payment through US Tuition, the easy way to pay.

To get started, just enter the name of your school and click the MAKE A PAYMENT button. Note: MasterCard®, Discover®, and American Express® cards are accepted for tuition payments.
Visa® does not participate in the tuition payment program at this time.

When you use this service, they charge a 2.8% "convenience" fee. In their FAQs, they say:

Does the School profit in any way from the fee charged?
No, the convenience fee is paid to USTuition LLC. The School receives no portion of the fee.

Will a parent who is entitled to a refund and who paid using USTuition LLC receive all or a portion of the convenience fee back?
No, the convenience fee is non-refundable.

Tuesday, August 3, 2010

American Express AcceptPay

I got this in the mail:  At American Express OPEN, we value you as a Cardmember and understand that collecting payments and managing cash flow is crucial to running your business. We're always working to find new solutions to help our Cardmembers and business owners run and mana ge their businesses even better. That's why we're proud to bring you AcceptPay, an online payment acceptance solution built for business.

Then there's some stuff about free for 60 days. It's not clear to me if this is a full merchant account or what.  They certainly don't provide any pricing info in their mailer (I got two of their mailings this weekend).

I went to their website and I found the pricing. It's a traditional mode which does not match the Paypal system for simplicity.  I would think that Paypal would start driving the others down to their pricing level soon.  Or out of business. I wonder what moved Amex to start something (is this new?) and to not go with the simple pricing of PayPal?

Paypal, I'm hoping, will bring some rationality and value to the merchant account business. Right now, it seems like the vendors just run amuck promising all sorts of things and then not delivering.

AcceptPay Transaction Fees(1)Print | Close
American Express Merchant Rate2.89% + $0.15 per transaction2
Merchant Rate For Other Major Payment Cards1Starting at 2.29%3
Processing Fee For All Payment Cards$0.29 per transaction4
eCheck (ACH) Check Rate$0.55 per transaction
1. PaySimple, a registered ISO/MSP in association with First National Bank of Omaha, Omaha, NE is offering and shall provide all AcceptPay enrollment and payment services. American Express is not providing or acting as an Agent for the solicitation of any product for or on behalf of First National Bank of Omaha. 

2. Alternate merchant rates may apply based on industry and charge volume. American Express reserves the right to make adjustments to our merchant rate tables and other pricing policies and will notify you of pricing changes in advance. Other fees may apply. 

3. For non-American Express payment cards, the merchant rate is determined by PaySimple. Minimum base rate of 2.29% applies to qualified MOTO rate transactions. Alternate merchant rates may apply based on card and transaction type. PaySimple reserves the right to modify its rates and pricing policies and will notify you of changes in advance. Other fees may apply. If you choose to link your pre-existing merchant account to AcceptPay, you will be subject to additional fees of $10 per month + $0.15 per transaction. 

4. Processing fee is charged by PaySimple for all American Express, Visa, MasterCard and Discover transactions.

Sunday, August 1, 2010

Merchant Account Fees Higher than Paypal

I run a series of websites so I'm now in a position to compare the use of Paypal as a merchant account credit card vendor with a commercial old style online one that I use.  Here's the deal.

PayPal charges a fixed 2.5% cost for processing credit cards.
My bank along with the fees from visa, mastercharge, and amex for credit card processing total 3.8%.

This is a pretty significant finding. I'm wondering, since I process in the millions, whether I should switch entirely to PayPal.  The 1.3% difference is $13K per million per year.  On a five million dollar business, thats $65K per year.  That's a lot.