Not an answer to the question, but does anyone have experience with PayLane? I'm met them at the next web conference and their rates seem pretty fair. Since I will be processing small transactions, I'm looking for a payment provider that has a low fixed amount to integrate in my startup product. $0.30 is quite a sum of money if you only process $10 and you make about $0.50 margin on top of that.
Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
81–88 of 88 posts
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#82It's not quite true that all payment processors charge 2.9% + $0.30. In the real world you'll find rates almost half that for brick and mortar merchants, more like 1.8% + $0.15, which is very close to a processor's wholesale cost (called "interchange"). It's specifically ecommerce processors that are easy for anyone to sign up with. There are two main reasons "no hassle / developer-friendly" ecommerce processors char…
great read, thank you
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#83I've always wondered what kind of rate a high volume company like McDonalds or Walmart could negotiate? Could they be paying pennies per transaction?
Even they don't get lower rates than interchange, because issuing banks get that no matter what. But they can get a very low margin above that.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#84Everyone forgets points/cashback. That visa card you just got that gives you 2% cashback? That doesnt come from thin air. It comes from the merchants pockets paying their transaction fee.
I always wondered where that came from, but I assumed it was on the backs of people paying interest on their balances.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#85link to your company's website?
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#86link to your company's website?
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#87Earlier quoted context omitted.
+1 -- if anything, the trend has been for quicker payouts and fewer holdbacks.
Exactly. In an ideal world: Merchants want zero fees, and instant payout (like cash), but "wait a minute" you might say. Don't businesses pay taxes, and how do you think those tax dollars are spent (in a non-gov't shutdown state)? Partially keeping the dollar bill presses running. Herein lies the problem. Cash is a government-run operation, and credit card networks are privately owned. We forget that our cash system…
People also forget that cash isn't free - you have to protect it (with a safe/locks/doors/armoured cars), count it, process it, watch for counterfeits, have change on hand, deposit it, and so on. And it's flammable.
Given a choice, there are lots of (big) businesses who would switch to debit/credit exclusively if that was an option, especially with the existence of branded credit cards. Home Depot would love nothing more than having all its customers using the HD credit card.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#88Everyone forgets points/cashback. That visa card you just got that gives you 2% cashback? That doesnt come from thin air. It comes from the merchants pockets paying their transaction fee.
That 2% is received more form the Consumers directly. Banks make 80% of income from Consumers in terms of late fees, interest charges, annual fees and various other charges they slap on consumers. Part of this goes to pay for the rewards i.e. not all rewards are paid from Merchant acquisition fees.