We process in the millions of dollars a year of online credit card for educational services. We've been in business for eight years, very low chargeback rate. It's all intangible goods, card not present.
We do some businesses entirely through PayPal. They charge, all in, an even 2.5%. It's primarily Paypal Merchant account services so the customers only know that they are paying by credit card. (We have their highest advertised level of service. Are there higher levels?)
We do one business entirely through a classic ISO/Bank arrangement with all sorts of complexity of fees being charged and credited back by Visa/Mastercard, the merchant account bank, and the ISO. But, it looks to me to be about 4% which I think is crazy high. However, with a switching cost of training and programming and testing, I estimate our costs are $50-$100K to switch. And it will be a major pain for my little company. So, there is a business case (strong ROI) to switch but I just don't want to go through the hassle.
Does you guys take a lot of international cards? Maybe I'm off on your volume, but 4% is pretty high unless you have a poor rate or are hitting some ugly interchange categories. Shoot me an email if you want an objective look at what you've got going.
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