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Balanced Makes Volume Pricing Public

blog.balancedpayments.com

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Re: Balanced Makes Volume Pricing Public

#21

Post by abalone »

And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced.

Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic".

So here's Balanced's interchange costs, for Visa:

Major debit cards[1]: 0.05% + $0.21

Unregulated debit cards (small banks): 1.65% + $0.15

Non-rewards credit cards: 1.8% + $0.10

Rewards credit cards: 1.95% + $0.10

Visa Signature Preferred (highest-end Visa cards): 2.4% + $0.10

Mastercard is usually similar. AmEx is usually more expensive.

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[1] This 0.05%/$0.21 rate is super interesting to note. The Durbin amendment was recently passed and regulates most debit card interchange down to practically nothing. This basically just happened and is potentially a huge profit center for processors who haven't updated their fees to reflect it. My guess is processors are right now all looking at each other and waiting to see who breaks rank.. but for the moment, merchants are not necessarily seeing the benefit. Processors are.

Re: Balanced Makes Volume Pricing Public

#22

Post by jareau »

abalone wrote: post #21

And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced. Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic". So here's Balanced's interchange costs, for Visa: Major debit cards[1]: 0.05% + $0.21 Unregulated debit cards (small banks): 1.65% + $0.15 No…

This is really good insight abalone. Thanks for sharing.

Re: Balanced Makes Volume Pricing Public

#24

Post by [deleted] »

abalone wrote: post #21

And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced. Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic". So here's Balanced's interchange costs, for Visa: Major debit cards[1]: 0.05% + $0.21 Unregulated debit cards (small banks): 1.65% + $0.15 No…

[deleted]

Re: Balanced Makes Volume Pricing Public

#25

Post by dangrossman »

abalone wrote: post #21

And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced. Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic". So here's Balanced's interchange costs, for Visa: Major debit cards[1]: 0.05% + $0.21 Unregulated debit cards (small banks): 1.65% + $0.15 No…

This is one of the advantages to having a real merchant account instead of using a 3rd-party processor like Balanced/PayPal/Stripe. I pay interchange + 0.04% for all cards, so when someone pays me with debit, I'm charged 0.09% and not 2.9%. Several thousand dollars a month of my subscription payments are from debit/check cards; it adds up.

Re: Balanced Makes Volume Pricing Public

#28

Post by dangrossman »

rasengan wrote: post #6

Bravo to transparency. Isn't this expensive though?

PayPal's volume pricing has always been public as well:

    $0 - $3,000/month	2.9% + $0.30
    $3,000 - $10,000	2.5% + $0.30
    $10,000 - $100,000	2.2% + $0.30
    $100,000+		1.9% or less, requires calling sales
Nonprofits automatically get 2.2% with no minimum volume, and in-person transaction with a PayPal Here dongle on your phone/tablet automatically get 2.7% flat with no minimum volume.

https://www.paypal.com/webapps/mpp/merchant-fees

Re: Balanced Makes Volume Pricing Public

#29

Post by zende »

abalone wrote: post #21

And to further the transparency, Visa & Mastercard also publish their interchange fees, which is the main cost for a processor like Balanced. Here's Visa's: http://usa.visa.com/download/merchants/visa-usa-interchange-... For online the fee program is usually "e-Commerce Basic". So here's Balanced's interchange costs, for Visa: Major debit cards[1]: 0.05% + $0.21 Unregulated debit cards (small banks): 1.65% + $0.15 No…

This is dead on. Here's a few other things to keep in mind:

1. A Durbin Regulated Debit Card include any bank that has over $10B in deposits. That's most debits cards by volume.

2. We've been lucky in being able to negotiate with our processing banks (also called acquiring bank) to receive very favorable rates to pass on those savings. You have to factor in this cost in addition to the interchange defined by the card brands.

3. Amex is more expensive than most other cards, but Amex is also the only card brand that will negotiate on their interchange based on volume and other factors.

abalone: thanks for writing this up. It's a more detailed answer to https://news.ycombinator.com/item?id=7033534

Re: Balanced Makes Volume Pricing Public

#30

Post by jareau »

dangrossman wrote: post #28
rasengan wrote: post #6

Bravo to transparency. Isn't this expensive though?

PayPal's volume pricing has always been public as well: $0 - $3,000/month 2.9% + $0.30 $3,000 - $10,000 2.5% + $0.30 $10,000 - $100,000 2.2% + $0.30 $100,000+ 1.9% or less, requires calling sales Nonprofits automatically get 2.2% with no minimum volume, and in-person transaction with a PayPal Here dongle on your phone/tablet automatically get 2.7% flat with no minimum volume. https://www.paypal.com/webapps/mpp/mercha…

PayPal's open pricing was part of the inspiration for opening up our pricing tiers. PayPal however sells directly to merchants. Balanced sells to marketplaces, which benefit from the aggregated volume of merchants on their platform, hence the higher transaction volume criteria for our tiers.
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