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Affirm doesn't list their B2B pricing on their website, but credit cards typically charge up to 5% of the total purchase price in processing fees. It wouldn't b
by andjd 5y ago
Affirm doesn't list their B2B pricing on their website, but credit cards typically charge up to 5% of the total purchase price in processing fees. It wouldn't be hard for a challenging upstart to make a solid business that just charges less. That's probably not the primary revenue driver for most BNPL companies though.
You've also seen credit card companies change their offerings to compete with the BNPL model. One of my credit cards has a "plan it" feature for large purchases, which allows you pay it of in a shorter period of time for a lower interest rate and without incurring interest charges on your month-to-month purchases.
- JumpCrisscross 5y ago> credit cards typically charge up to 5% of the total purchase price in processing fees Source? I thought it’s 2 to 3%.
- jjoonathan 5y agoSure, 2-3% if you're WalMart. If you're (small respectable retailer) you'll be paying three times that and if you're a tiny retailer you'll be paying five times that.
- pc86 5y agoNobody is paying 10-15% in credit card fees regardless of their size. This is just blatantly wrong.
- kube-system 5y agoI wouldn't say nobody. High-risk payment processors can have rates that high.
- leetcrew 5y agothere's also a flat fee per transaction (eg, 3.25% + $0.10). this can make the effective rate pretty high for small purchases. https://www.valuepenguin.com/credit-card-processing/interchange-fees https://www.valuepenguin.com/credit-card-processing/intercha...
- arrosenberg 5y agoCredit Cards are 2-4% + 0.1-0.3/transaction depending on your volume. Small businesses would pay the max on the flat and near it on the percentage. Affirm and similar were 6% last time I talked to them (admittedly 3-4 years ago), and represented a far superior value proposition for a lot of customers because it gives them a longer period of time and forces them onto a payment schedule.