I would suggest considering the amount you are charging. If you are charging a good amount of money every day, I would strongly suggest getting a merchant account with a service like authorize.net as the gateway. These services offer the best rates for credit cards. Visa and Master Card could be as low as %2.1. If you are just wanting to get a feel for the business, and don't anticipate charging a lot of money, you may want to use a service like 2checkout.com. Once you start making a good amount of money, you can always switch to a merchant service.
2checkout.com alows you to accept credit cards without first becomming incorporated which may be better if you are a startup. They can have you setup instantly for $50. At least, thats what it says on the web site.
Here it is:
Billing system (I'll take Modernbill) - $24.95/mo
3rd party processing system (either 2CO or MyPaysystem)- $49/setup
SSL Certificate (I'll take ChainedSSL at EV1, ChainedSSL is not the best but so far the cheapest) - $21.60/year Total: $95.55
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The transaction rate is usually the biggest killer in micropayments. Are you expecting to bring in over $1000 a month? If so, you might check out a merchant account. I do not use ModernBill but from what I remember on here, it comes with a way to set up the payment gateway authorizenet.com and I think a way to get a merchant account from e-online data or someone like that.
Originally posted by Imago Yes, the macroprocessing of microtransactions is killing the idea of microsales. What we need is a international system like the one used by moneybookers, with the ability to accept CC payments.
The ideal would be my own national bank to provide me with the tools to process CC payments from USA and other International cc holders, not to open a merchant accounts in USA, China, or Australia.
Takes a lot of work, patience, money, and patience to do it but it can be done. And then you have to wonder after all of that, what happens because it brings you up against chargebacks which can be very detrimental to that business.
You have some consumers who try to cheat the merchants, some merchants who try to cheat the processors, no one trusting anyone & Visa/MasterCard always re-defining their rules & regulations.
The integral problem with micro-payments rests in the core hard cost that it takes to process a credit card transaction.
Even purely on the Visa/MasterCard Interchange, Dues & Assessments, you're looking at a cost of .10 - .15 per trans plus the discount rate fees which can easily equate to additional pennies or nickels on top of it, even on a low ticket.
Then you have to take into account the network processing costs. If you use an existing front-end or back-end network, which is usually the most cost effective way to do it, then you are still looking at yet another layer of per transactional costs that adds to the effective hard cost.
You could, of course, build your own processing network but this is a significant undertaking that requires a large team of experienced industry veterans w/ industry rapport, IT folks, a vast amount of capital, time and dedication without any guarantees of its long term cost effectiveness.
What would be nice to see would be a new Interchange category specifically for Micro-payments on the VISA/MC New Market side. That would really provide an answer to this problem.
They have Interchange tiers for government purchases, QSR, various forms of travel and very high ticket/corporate purchases but micro-payments would be an interesting area to see them have a good IC pricing level for to help solve this problem.
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