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Processors have upstream costs to Visa/Mastercard/etc that are charged in similar ways. The idea behind them using a percentage is that it relates to the risk.
by casca 13y ago
Processors have upstream costs to Visa/Mastercard/etc that are charged in similar ways. The idea behind them using a percentage is that it relates to the risk. The more you spend, the more could be fraud and might need to be written off. The $0.30 is effectively a lower bound to stop micropayments. Otherwise people could do a $0.10 transaction and only pay $0.003. This could be to avoid system load.
While it might seem expensive, until a few years ago, taking card payments required getting a merchant account at a bank with high monthly fees which could take months. Now you can pay similar rates but without the misery of dealing with the banks.
- arcdigital 13y agoAre you from the US? If so, that stuff about merchant accounts isn't true. While they're backed by a bank (acquiring bank), you don't have to go to a consumer bank to get one. You can go through any company called an ISO. In my opinion banks are the worst place to get one. We do merchant accounts with a monthly fee of $5/mo and instant setup (you can start processing in less than 2 minutes from when you complete the form). All backed by our friendly customer service team in Ohio. Now if you're in the UK...things are very different :).
- savetz 13y agoPayPal has a micropayments account option that it doesn't publicize very well. If you set up a new account with their special micropayments link (google it) they charge 5 cents + 5%. Which makes it cheaper for transactions under $11.