From what I understand, in order to charge customers’ credit or debit cards, you need to use a payment processor like Paypal or Stripe. It seems like the fee for using this service is around (4% + $0.50) per transaction.

To get around this, you could make users link a bank account for ACH transfer or use crypto to circumvent this fee.

Specifically for my situation, I’m offering a B2C SaaS subscription service with plans around $5 or $10. The fees are pretty steep for these smaller monthly transactions, am I just forced to pay these fees if I want to take online payments?

For a broader audience: in your startup, how do you accept payments, who is the processor, and what fees are you paying?

  • trade4uni@alien.topBEnglish
    1·
    10 months ago

    At the moment, there really isn’t a way around the fees associated with card payment processing.

    As suggested by u/summerinside, it would be good to incentivize your customers to pay annually or in larger increments to limit your payment processing fees.

    Not sure how much volume you’re pushing, but you should shop the payment processors and sign a contract. Signing a contract would decrease the take rate from these transactions compared to what you normally see advertised on their website.

  • summerinside@alien.topBEnglish
    1·
    10 months ago

    So when you’re using PayPal or Stripe to take credit cards, there’s the amount that Visa (or the CC provider) is taking, and then there’s the additional amount that PayPal or Stripe is taking on top of that.

    For pricing a subscription that small, to limit (expensive) monthly transactions, I’ve seen a lot of companies do some variation of “buy 6 or 12 months and save” pricing strategy. - Something like $15/mo, but only $120 for the year.

  • User1542x@alien.topBEnglish
    1·
    10 months ago

    The payment processor is the middle man between you, your customer, and the bank/credit card companies.

    They take a cut to process the transactions (share it with the CC companies as well) and clearing real-time across the bank networks (if you ever charge something at a major retailer on your CC and look at your CC in 15min, you will see that ‘pending’ transaction).

    You can find cheaper processing. Most most banks will enable you to take credit cards as long as you have a business banking account with them, which will be cheaper than going with Strip, but have less features. Just search around.

    Its the cost of doing business and you want to ensure that this is setup well. As a customer, I do not like paying via ACH, as once the $$ is gone very hard to get back.

  • SaltMaker23@alien.topBEnglish
    1·
    10 months ago

    You’re going to lose wayyyy more than 4-5% if you stop accepting credit cards and paypal, way more. I can’t stress how much your conversions will drop, I just can’t stress it enough.

    You’re better off putting your offers at 5.99$ and 10.99$ than doing what you are suggesting.

    ps: Are you really proposing ACH as a main online paiment method ?

  • FengSushi@alien.topBEnglish
    1·
    10 months ago

    You give mommy nice drawing of cat. Mommy puts gold coin in piggy bank. Mommy loves your little startup my five year old hustle bustle entrepreneur ❤️

  • FengSushi@alien.topBEnglish
    1·
    10 months ago

    You give mommy nice drawing of cat. Mommy puts gold coin in piggy bank. Mommy loves your little startup my five year old hustle bustle entrepreneur ❤️

  • MathRepresentative83@alien.topBEnglish
    1·
    10 months ago

    There really isn’t a way to get around the fees, you can offer account to account transfers i.e. set up a direct debit but then by not accepting cards you maybe rejecting a lot of customers.