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Best credit card processing merchant rate?

5:21 pm on Aug 11, 2008 (gmt 0)

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I just received a flyer from PayPal with a new credit card processing feature with

"rates as low as 2.2% + $0.30 per transaction."

while I dont know if I want to go with PayPal for this, it got me thinking that i'm not getting the best processing fee rates out there.

Who do you guys use? What's considered a 'great' rate for a mid-sized e-commerce store? I'm lost and dont know where to begin...


8:28 pm on Aug 11, 2008 (gmt 0)

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We're at 2.4% + .30 for Visa, MC, Disc.
Amex is more.

Our rate was briefly raised to 2.7%, we called and complained.

3:54 am on Aug 12, 2008 (gmt 0)

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I'm at 1.7% plus 55 cents for the phone call to the automated line. That's for Mastercard and Visa. Amex is the same pain that everyone else suffers.
3:56 am on Aug 12, 2008 (gmt 0)

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You can negotiate a better rate from Paypal if you can process over $100k USD per month with them.
2:50 pm on Aug 12, 2008 (gmt 0)

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I would steer clear of PayPal. Just google Paypal + any negative word and you will find entire domains dedicated to how awful they are. Granted a lot that angst is probably in relation to eBay but its the same company either way. I can you tell you from personal experience their customer service is abysmal...and I've been a veteran user of 6 years.

I'm not sure if they'll have the lowest rates, but its worth checking into...PNC Bank. They're running a big promotion that they will beat your processing costs or give you $100 if they can't. And if you do sign up they'll give you $300 more.

I joined during a similar promotion and I can't complain...my account was set up fast and if I have a question help is a fast e-mail away (they actually respond).

Good luck

11:31 pm on Aug 13, 2008 (gmt 0)

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1.7% and a phone call verification? Sounds like a card present terminal. For Internet (card not present) around 2% isn't bad. The advantage of PayPal, even though they may not have the best discount rate, is that there is a flat monthly (no hidden statement fees), they integrate USPS and UPS shipping into their back end, and you get added sales by offering express checkout (yes Virginia, there are millions of people out there in cyberspace that pay with Paypal).
3:28 pm on Aug 14, 2008 (gmt 0)

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Don't forget interest and liquidity in your calculation. Some processors keep your funds for several weeks. This can be expensive, especially when you start with your business and your liquidity is low.

When I started several years ago I opted for Paypal because I could transfer the money to my bank account immediatly and so I was able to use the cash discounts for immediate payment with my suppliers. This were between 2-5 % of the invoice amount. I also avoided having to use overdraft credits or my credit card.

So if your account is always in overdraft or you can't use cash discounts, or have to go into debt with your credit cards because your credit card processor keeps your money too long it might be worth considering switching to another processor where you pay more but get your money sooner.