What payment gateway options are available and best suited to $1 items

[hulahoop]

Hi,

I'll be processing micro payments of about $1. What payment gateway or payment options do I have out there and what are the fees breakdown?

I know there is paypal, worldpay, 2checkout but don't know if they accept such small values and what their fees are like?

[card_demon]

You will have difficulties because processing charges will eat into that small amount.

Also acquirers don't like these small charges as carders also use small charges with stolen cards when doing card testing.

What is the class of products? Is this a loss leader or recurring into a larger charge or all of them are $1?

[hulahoop]

well i have several classes. the lowest would be $1 then $5, then $10. It is stock images. what and who would you recommend?

[imstillatwork]

1$ each is fine, but put a minimum qty to purchase possibly?

[tangor]

The minimum per transaction charge on lesser amounts will really impact income. Minimum items (5-10) might be a way to go, or groups of similar items as a package.

[MWpro]

Many stock image sites sell "credits" to purchase the images. They solve your problem by requiring a certain minimum of credits to be bought.

So say the least number of credits you could buy is 10 (10 credits = $10, presumably)... this would enable your buyer to cash in those credits for 10 separate images.

So instead of worrying about $1 credit card charges, you have only one $10 charge to worry about.

[piatkow]

Micro payments need massive volumes before you can get processing charges down to realistic levels.

[card_demon]

As the others say credit cards are designed fee wise for charges of $10 and above. Less than that and you are really dinged.

So consider revising your business model on the lines they mention.

[hulahoop]

thanks a lot for your suggestions. yes i will definately have a $5 and $10 and above credit value but thought I'd should be competitve to offer even $1 (per credit). Just knowing the options is good.

By the way I got note from worldpay that their fees are:
1a) The transaction service charge for Visa, Master and Amex cards is 5% per transaction.
b) The WorldAlert charge is USD 0.10 per transaction.
c) The remittance charge is USD 18 per remittance
d) The annual fee is USD 215 per year.

I'm not sure but I think services like WorldAlert does only warn you about a transaction but does not take any risk. Example, if a transaction does not flag and is still fraudulant, you are not covered or compensated in a way.

[LifeinAsia]

yes i will definately have a $5 and $10 and above credit value but thought I'd should be competitve to offer even $1 (per credit).

Offer the best of both worlds. Charge something like $1.50/credit. But give volume discounts (e.g., $1/credit if you buy 10 or more at a time).

That way the people buying a lot will still be in line with your pricing model. But people who only want 1 image won't be forced to buy 10 credits; yet it still allows you to manage some profit for those people who make small purchases.

[edited by: LifeinAsia at 5:19 pm (utc) on April 8, 2009]

[hulahoop]

thanks so much for the advice but nobody posted a list of gateway options aside from paypal, worldpay, 2checkout, are there more (only the reputable ones pls)?