Why can't the merchant's funds simply be quarantined for say 2-3 months?
... Victims of a fraudulent merchant would have 30 days to 1) get their bill and an extra 30 days notice of the fraud charge on their bill to cancel/dispute. If the customer did not pay bill; the 'visa' could avoid crediting the merchant. A 2.9% transaction fee is like a 1 year quarantine. quite long me thinks.
Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
31–40 of 88 posts
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#32Dwolla doesn't charge that but I have no idea who uses them
It's ACH, which is great for fees but has numerous drawbacks as well.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#33I've always wondered what kind of rate a high volume company like McDonalds or Walmart could negotiate? Could they be paying pennies per transaction?
almost certainly cheaper, but i doubt they ever make it to pennies per transaction. the best rates I have heard about are 1.6% + 20-30c
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#34Why can't the merchant's funds simply be quarantined for say 2-3 months? ... Victims of a fraudulent merchant would have 30 days to 1) get their bill and an extra 30 days notice of the fraud charge on their bill to cancel/dispute. If the customer did not pay bill; the 'visa' could avoid crediting the merchant. A 2.9% transaction fee is like a 1 year quarantine. quite long me thinks.
What merchant would sign up for that?
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#35Why can't the merchant's funds simply be quarantined for say 2-3 months? ... Victims of a fraudulent merchant would have 30 days to 1) get their bill and an extra 30 days notice of the fraud charge on their bill to cancel/dispute. If the customer did not pay bill; the 'visa' could avoid crediting the merchant. A 2.9% transaction fee is like a 1 year quarantine. quite long me thinks.
What merchant would sign up for that?
+1 -- if anything, the trend has been for quicker payouts and fewer holdbacks.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#36Why can't the merchant's funds simply be quarantined for say 2-3 months? ... Victims of a fraudulent merchant would have 30 days to 1) get their bill and an extra 30 days notice of the fraud charge on their bill to cancel/dispute. If the customer did not pay bill; the 'visa' could avoid crediting the merchant. A 2.9% transaction fee is like a 1 year quarantine. quite long me thinks.
What merchant would sign up for that?
A one year CD goes for about 1% now ergo 3% is a long time horizon on value. 2-3 months is ~equivalent to a 0.1% fee per CD rates.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#37Earlier quoted context omitted.
What merchant would sign up for that?
A one year CD goes for about 1% now ergo 3% is a long time horizon on value. 2-3 months is ~equivalent to a 0.1% fee per CD rates.
I think the vast majority of merchants would find more utility in the expedited payout & resulting liquidity than the extra 2-3%.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#38For credit cards, some of the cost is prepaid interest. If a consumer pays their card on time, they don't get charged interest--however the bank loaned them money from the day of the transaction until they either get paid with the same billing cycle, or they start officially charging the consumer interest (which can take up to 60 days). The merchant pays this interest, which is high.
Debit cards are another matter.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#39Interestingly, Plastiq charges the consumer instead of the merchant and they only charge 1.99% (to as high as 2.49%)
Plastiq opens up a lot more borrowers and lending opportunities for the processing networks ( e.g. people use their Visa on items they previously could not --- tuition, rent, etc. ), so Plastiq is able to negotiate some of the lowest rates in the business.
Re: Ask HN: Why do all payment processors charge 2.9% + $0.30 per transaction?
#40Why can't the merchant's funds simply be quarantined for say 2-3 months? ... Victims of a fraudulent merchant would have 30 days to 1) get their bill and an extra 30 days notice of the fraud charge on their bill to cancel/dispute. If the customer did not pay bill; the 'visa' could avoid crediting the merchant. A 2.9% transaction fee is like a 1 year quarantine. quite long me thinks.
Because most merchants would then need to borrow money to pay their suppliers and expenses while awaiting payment, which would end up costing them a lot more than an extra 1%.