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It costs 3.25%, or $74.25 for the example of $2300. So if you're looking to just rack up "reward points", you'd be best pumping through a payment processor that

by derwiki 12y ago

It costs 3.25%, or $74.25 for the example of $2300. So if you're looking to just rack up "reward points", you'd be best pumping through a payment processor that takes a smaller cut. $5/month for debit is more reasonable, but my bank will mail my rent check for free.

toomuchtodo 12y ago
A debit transaction only costs 15-70 cents for the processor. $5 is gouging-level. EDIT: change 15-30 to 15-70 cents based on additional information provided in response below.
- juantwo 12y ago
  FYI transaction costs are a percentage of the total charge. Plus interchange and all that crap. Without looking too far into this, I'm pretty sure debit transaction fees are ~1% which would be about $20 for my $2,000 rent.
  - toomuchtodo 12y ago
    "Overall, signature debit networks charged substantially higher fees, on a per-transaction basis (12.5 cents), than did PIN debit networks (5.7 cents), and the difference between these fees on a per-transaction basis widened in 2012." http://i.imgur.com/3iu43vi.jpg http://i.imgur.com/3iu43vi.jpg http://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm http://www.federalreserve.gov/paymentsystems/regii-average-i... "The Board's Regulation II provides that an issuer subject to the interchange fee standard (a covered issuer) may not receive an interchange fee that exceeds 21 cents plus 0.05 percent multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible. Transactions made using certain reloadable general-use prepaid cards and debit cards issued pursuant to government-administered payment programs are exempt from the interchange fee standard, even if the card is issued by a covered issuer." Also: http://www.cardfellow.com/blog/debit-card-transaction-fees/ http://www.cardfellow.com/blog/debit-card-transaction-fees/
- dsl 12y ago
  The other $4.70 goes to paying for the helicopter and hot girl they rented for the promo video.
- adrr 12y ago
  Debit card is 0.22 + 0.05% transactions and this is only for large banks, the fee is set by law with the Durbin Amendment . Smaller banks aren't covered by the amendment and fees are higher, think the going rate is 1.65% and 0.15. $2000 rent fees range $1.22 to $30. Think $5 is reasonable.
tylergalpin 12y ago
A lot of people find it's important to pay on a credit card especially if you're living month to month, or if you can afford to pay the fees you can get decent status with your card company. You're totally right though, $4.95/mo is more likely to happen (or send through your bank). We have some good value add over the bank because we're in the process of letting you build your credit history with successully paid rent payments - something the banks don't offer.
- thenipper 12y ago
  Paying your rent on a credit card if you're living month to month sounds like it is a recipe for some spiraling out of control consumer debt.
  - tylergalpin 12y ago
    Sometimes your paycheck doesn't arrive on time to pay your rent, and paying on a credit card to absorb the fee temporarily is a viable option for some people. Paying with a credit card also isn't a requirement...just an option :)
    - kstenerud 12y ago
      Or get a line of credit. Or overdraft protection. Or in the worst case just take out a cash advance on your credit card for a few days. 3.25% off the top just to pay your rent is insane.
  - sliverstorm 12y ago
    That was exactly my first thought when I saw this headline. You thought people were racking up crazy credit card debt before... When this baby hits 88 mph, you're gonna see some serious shit.
- dsl 12y ago
  Can you give some detail on how your merchant account is categorized? It looks like your product is a "cash equivalent" and probably not eligible for rewards points.
barnaby 12y ago
Good point. This app would make more sense with bitcoin in order to avoid the fees, and would have several benefits over paying rent online through a bank (or over having to write a check by hand and mail it in). Some examples: 1) Instead of waiting 3 days for a bank transfer to clear (or for a check to go through the mail), you could pay your rent through an app like this in seconds using bitcoin (and not pay 3% for the convenience of instant payment). 2) If you're working remotely in a different country then you could use this app with bitcoin to pay neither credit card fees nor SWIFT fees for international bank transfers. 3) If you're an early adopter and your bitcoin appreciate over time you'd effectively be paying tomorrows rent with a big percentage discount with todays BTC purchases if you could use this app with bitcoin. etc. etc.
- adenner 12y ago
  Dwolla might be a good alternative payment system for the app to support also, with a $0.25 processing fee for the transfer part of the fee. Online billpay mailing a check for no fee still wins though.

by derwiki 12y ago

toomuchtodo 12y ago

A debit transaction only costs 15-70 cents for the processor. $5 is gouging-level. EDIT: change 15-30 to 15-70 cents based on additional information provided in response below.

juantwo 12y ago
FYI transaction costs are a percentage of the total charge. Plus interchange and all that crap. Without looking too far into this, I'm pretty sure debit transaction fees are ~1% which would be about $20 for my $2,000 rent.
- toomuchtodo 12y ago
  "Overall, signature debit networks charged substantially higher fees, on a per-transaction basis (12.5 cents), than did PIN debit networks (5.7 cents), and the difference between these fees on a per-transaction basis widened in 2012." http://i.imgur.com/3iu43vi.jpg http://i.imgur.com/3iu43vi.jpg http://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm http://www.federalreserve.gov/paymentsystems/regii-average-i... "The Board's Regulation II provides that an issuer subject to the interchange fee standard (a covered issuer) may not receive an interchange fee that exceeds 21 cents plus 0.05 percent multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible. Transactions made using certain reloadable general-use prepaid cards and debit cards issued pursuant to government-administered payment programs are exempt from the interchange fee standard, even if the card is issued by a covered issuer." Also: http://www.cardfellow.com/blog/debit-card-transaction-fees/ http://www.cardfellow.com/blog/debit-card-transaction-fees/
dsl 12y ago
The other $4.70 goes to paying for the helicopter and hot girl they rented for the promo video.
adrr 12y ago
Debit card is 0.22 + 0.05% transactions and this is only for large banks, the fee is set by law with the Durbin Amendment . Smaller banks aren't covered by the amendment and fees are higher, think the going rate is 1.65% and 0.15. $2000 rent fees range $1.22 to $30. Think $5 is reasonable.

tylergalpin 12y ago

A lot of people find it's important to pay on a credit card especially if you're living month to month, or if you can afford to pay the fees you can get decent status with your card company. You're totally right though, $4.95/mo is more likely to happen (or send through your bank). We have some good value add over the bank because we're in the process of letting you build your credit history with successully paid rent payments - something the banks don't offer.

thenipper 12y ago
Paying your rent on a credit card if you're living month to month sounds like it is a recipe for some spiraling out of control consumer debt.
- tylergalpin 12y ago
  Sometimes your paycheck doesn't arrive on time to pay your rent, and paying on a credit card to absorb the fee temporarily is a viable option for some people. Paying with a credit card also isn't a requirement...just an option :)
  - kstenerud 12y ago
    Or get a line of credit. Or overdraft protection. Or in the worst case just take out a cash advance on your credit card for a few days. 3.25% off the top just to pay your rent is insane.
- sliverstorm 12y ago
  That was exactly my first thought when I saw this headline. You thought people were racking up crazy credit card debt before... When this baby hits 88 mph, you're gonna see some serious shit.
dsl 12y ago
Can you give some detail on how your merchant account is categorized? It looks like your product is a "cash equivalent" and probably not eligible for rewards points.

barnaby 12y ago

Good point. This app would make more sense with bitcoin in order to avoid the fees, and would have several benefits over paying rent online through a bank (or over having to write a check by hand and mail it in). Some examples: 1) Instead of waiting 3 days for a bank transfer to clear (or for a check to go through the mail), you could pay your rent through an app like this in seconds using bitcoin (and not pay 3% for the convenience of instant payment). 2) If you're working remotely in a different country then you could use this app with bitcoin to pay neither credit card fees nor SWIFT fees for international bank transfers. 3) If you're an early adopter and your bitcoin appreciate over time you'd effectively be paying tomorrows rent with a big percentage discount with todays BTC purchases if you could use this app with bitcoin. etc. etc.

adenner 12y ago
Dwolla might be a good alternative payment system for the app to support also, with a $0.25 processing fee for the transfer part of the fee. Online billpay mailing a check for no fee still wins though.