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I'm sure there is a lot of business out there that run through the same situation. Any suggestion ?
That said, strongly consider anything you can do which pushes your average transaction value up above ~$20 or so. This is partly due to decreasing the bite of transaction fees but mostly because building a business on $1.50 transactions is really, really, really, really hard when Steve Jobs has not already arranged a captive audience with credit cards on file.
One of the traditional solutions in e.g. social games is selling a virtual currency in $10, $20, $50, etc increments and then using the virtual currency to effect small-value payments. For example, $10 gets you 7 dragon eggs, $20 gets you 15 (one bonus egg!) The thing you were thinking of selling for $1.50 now costs 1 dragon egg. This both helps you get your average purchase up, saves your processing costs, and also increases transaction volume by not having people feel like they're being asked for $1.50 on a frequent basis. (The fact that $10 doesn't divide evenly by 7 is not accidental.)
I'm disappointed in Stripe on this one. There should be better rates for micropayments.
I'm disappointed in Stripe on this one. There should be better rates for micropayments.
I agree, Stripe is one of the most advanced, easy to plugin platform with just a completely wrong old school, bank-a-like business model.
To the OP's question: for apps that facilitate micro-transactions I ended up using Stripe, but I forced the user to add a balance to their account first. So, rather than charge their credit card for every micro transaction, they'd add $20.00 to their account in the beginning, and every transaction would just draw-down from that account. Antiquated, but seemed to work alright.
EDIT: if you don't have a couple months of volume to show a processor it makes it harder to get a good rate. brand new company with online transactions are pretty much highest risk category for a processor, therefore highest rate. fees the processor has to pay visa would be close to $0.50 probably
Paypal Micropayments is 5% and 5 cents. That said, strongly consider anything you can do which pushes your average transaction value up above ~$20 or so. This is partly due to decreasing the bite of transaction fees but mostly because building a business on $1.50 transactions is really, really, really, really hard when Steve Jobs has not already arranged a captive audience with credit cards on file. One of the tradit…
what kind of monthly volume are you expecting? are these cardless transactions? if they're cardless i dont really see a scenario where you can have $1.50 transactions and make any money. too high risk for the processor. EDIT: if you don't have a couple months of volume to show a processor it makes it harder to get a good rate. brand new company with online transactions are pretty much highest risk category for a proc…
There must be a completely different deal that opens up once you have that volume
Paypal Micropayments is 5% and 5 cents. That said, strongly consider anything you can do which pushes your average transaction value up above ~$20 or so. This is partly due to decreasing the bite of transaction fees but mostly because building a business on $1.50 transactions is really, really, really, really hard when Steve Jobs has not already arranged a captive audience with credit cards on file. One of the tradit…