5 ms·

Transaction costs are a killer. It hurts on cups of coffee which I sell a lot of. Merchant services are bastards.

blhack 17y ago
I imagine that you wouldn't actually have to process the transaction until somebody owes a largish ammount of money (relatively). Something around $10-20. What would work even better (this is how allofmp3.com used to work) would be to buy a bunch of credits...$10-$20 worth of them, then as you make "micropayments", it draws from this supply. Google's ad program also works this way. You pay in $50 or so, then each click costs you $0.90 or $0.10 or whatever it is, it doesn't process a transaction for each one, it just draws from your reserve. This is good because it encourages people to continue using the service until their balance is gone. This causes the cost of moving to another service to increase. The idea of this isn't new, it's just stupid.
- teej 17y ago
  Doesn't Apple do this? If you make a purchase, you won't get a receipt until a few days later. It will aggregate all your "store" purchases across iTunes desktop, iTunes on devices, and the App Store on a weekly basis.
  - enomar 17y ago
    Amazon does. I use their mp3 store on Android. They appear to only charge my credit card at the end of the day so that songs can be grouped.
  - chollida1 17y ago
    > It will aggregate all your "store" purchases across iTunes desktop, iTunes on devices, and the App Store on a weekly basis. I don't know how they do it exactly but for what its worth I made a purchase on Monday and then again on Tuesday and I recieved seperate charges for each. Though each charge came 2 days after the purchase( Wednesday and Thursday). For what it's worth I use the Canadian iTunes store.
- dan_the_welder 17y ago
  True, I am currently researching giftcards for that reason. Merchant services are still bastards. Rich, rich bastards.
- skinnymuch 17y ago
  I really don't think the buying credits would work better. It would work, but not better. The whole point of micropayments is spending a tiny bit of money. How is buying $10+ in credits beforehand a micropayment? Defeats the purpose.
  - blhack 17y ago
    It sounds like somebody needs to create a micropayment service. I don't have the coding chops, but I know a lot of the people around here do. You put $10 into a micropayment account that can then be used across websites like facebook or blogger, or whatever else service decides to do this. I could even see ISPs rolling this into part of your payment plan for internet...$50 a month for access, $10 a month that gets picked at by people that use micropayments. If anybody does this, will you buy me an Ariel Atom?
    - eru 17y ago
      Isn't this exactly what your bank or credit card company should be providing? (Only massively cheaper than they do now.)
chollida1 17y ago
StarBucks, and I assume other retailers, have figured this out and offer refillable cards. The idea is that you put say $25 on the card and that is a one time VISA charge. Then each time you use the card there is no additional merchant charge to them. At the price of say $3 drink this can save them 7 of the 8 flat fee credit card processing charges, the variable charges for using the credit card are of course still there.
- skinnymuch 17y ago
  I go to Starbucks regularly and rarely see anyone using the Starbucks card. Though I see it being advertised near the cash register everywhere.
  - adamc 17y ago
    Does it offer any advantage to consumers? (I don't drink coffee.)
    - joeyo 17y ago
      Yes, if you register a Starbucks card you become eligible for "rewards" according to: https://www.starbucks.com/cardrewards/default.asp https://www.starbucks.com/cardrewards/default.asp
    - chollida1 17y ago
      My wife gets free soy(instead of milk) in her Chai latte. Normally this is an extra 50 cents each time.
ryanwaggoner 17y ago
I've always wondered about this...I live in SF, where a huge number of the little coffee shops are cash only or have a $10 minimum or whatever. As a result, I don't go there, I go to Starbucks instead. I get that the transaction costs of $.25 + 3% is brutal on a $1.50 cup of coffee, but wouldn't it be better to just raise the price of the cheaper items in the store by $.25, or even just $.15? The COG on a cup of coffee is what, like ten cents? So your gross profits are good, you just need more volume. Are consumers really so price sensitive that they'd go elsewhere over a fifteen cent increase? I wouldn't...I value convenience and a good cup of coffee over fifteen cents.
- eru 17y ago
  Why not just two different prices? Just make sure to call it a cash discount, instead of a credit card markup. This way the store does not care how a customer pays, and the customer can decide for herself whether fifteen cents are worth the convenience. (By the way, why aren't you paying with cash? I find it much more convenient in general than plastic cards.)
  - dantheman 17y ago
    Cash is easier than a card? You swipe the card and your done, how can it be any easier? With cash you have to constantly go to the atm, and deal with change.
  - ryanwaggoner 17y ago
    Why not just two different prices? Just make sure to call it a cash discount, instead of a credit card markup. Someone correct me if I'm wrong, but I'm virtually certain that this violates the merchant agreement with the card networks.

I imagine that you wouldn't actually have to process the transaction until somebody owes a largish ammount of money (relatively). Something around $10-20. What would work even better (this is how allofmp3.com used to work) would be to buy a bunch of credits...$10-$20 worth of them, then as you make "micropayments", it draws from this supply. Google's ad program also works this way. You pay in $50 or so, then each click costs you $0.90 or $0.10 or whatever it is, it doesn't process a transaction for each one, it just draws from your reserve. This is good because it encourages people to continue using the service until their balance is gone. This causes the cost of moving to another service to increase. The idea of this isn't new, it's just stupid.

teej 17y ago
Doesn't Apple do this? If you make a purchase, you won't get a receipt until a few days later. It will aggregate all your "store" purchases across iTunes desktop, iTunes on devices, and the App Store on a weekly basis.
- enomar 17y ago
  Amazon does. I use their mp3 store on Android. They appear to only charge my credit card at the end of the day so that songs can be grouped.
- chollida1 17y ago
  > It will aggregate all your "store" purchases across iTunes desktop, iTunes on devices, and the App Store on a weekly basis. I don't know how they do it exactly but for what its worth I made a purchase on Monday and then again on Tuesday and I recieved seperate charges for each. Though each charge came 2 days after the purchase( Wednesday and Thursday). For what it's worth I use the Canadian iTunes store.
dan_the_welder 17y ago
True, I am currently researching giftcards for that reason. Merchant services are still bastards. Rich, rich bastards.
skinnymuch 17y ago
I really don't think the buying credits would work better. It would work, but not better. The whole point of micropayments is spending a tiny bit of money. How is buying $10+ in credits beforehand a micropayment? Defeats the purpose.
- blhack 17y ago
  It sounds like somebody needs to create a micropayment service. I don't have the coding chops, but I know a lot of the people around here do. You put $10 into a micropayment account that can then be used across websites like facebook or blogger, or whatever else service decides to do this. I could even see ISPs rolling this into part of your payment plan for internet...$50 a month for access, $10 a month that gets picked at by people that use micropayments. If anybody does this, will you buy me an Ariel Atom?
  - eru 17y ago
    Isn't this exactly what your bank or credit card company should be providing? (Only massively cheaper than they do now.)

chollida1 17y ago

StarBucks, and I assume other retailers, have figured this out and offer refillable cards. The idea is that you put say $25 on the card and that is a one time VISA charge. Then each time you use the card there is no additional merchant charge to them. At the price of say $3 drink this can save them 7 of the 8 flat fee credit card processing charges, the variable charges for using the credit card are of course still there.

skinnymuch 17y ago
I go to Starbucks regularly and rarely see anyone using the Starbucks card. Though I see it being advertised near the cash register everywhere.
- adamc 17y ago
  Does it offer any advantage to consumers? (I don't drink coffee.)
  - joeyo 17y ago
    Yes, if you register a Starbucks card you become eligible for "rewards" according to: https://www.starbucks.com/cardrewards/default.asp https://www.starbucks.com/cardrewards/default.asp
  - chollida1 17y ago
    My wife gets free soy(instead of milk) in her Chai latte. Normally this is an extra 50 cents each time.

ryanwaggoner 17y ago

I've always wondered about this...I live in SF, where a huge number of the little coffee shops are cash only or have a $10 minimum or whatever. As a result, I don't go there, I go to Starbucks instead. I get that the transaction costs of $.25 + 3% is brutal on a $1.50 cup of coffee, but wouldn't it be better to just raise the price of the cheaper items in the store by $.25, or even just $.15? The COG on a cup of coffee is what, like ten cents? So your gross profits are good, you just need more volume. Are consumers really so price sensitive that they'd go elsewhere over a fifteen cent increase? I wouldn't...I value convenience and a good cup of coffee over fifteen cents.

eru 17y ago
Why not just two different prices? Just make sure to call it a cash discount, instead of a credit card markup. This way the store does not care how a customer pays, and the customer can decide for herself whether fifteen cents are worth the convenience. (By the way, why aren't you paying with cash? I find it much more convenient in general than plastic cards.)
- dantheman 17y ago
  Cash is easier than a card? You swipe the card and your done, how can it be any easier? With cash you have to constantly go to the atm, and deal with change.
- ryanwaggoner 17y ago
  Why not just two different prices? Just make sure to call it a cash discount, instead of a credit card markup. Someone correct me if I'm wrong, but I'm virtually certain that this violates the merchant agreement with the card networks.