Hi everyone,
given a business model similar to app store, and expected transactions of small value (~1.5$). What's the best credit card merchant to use? From a quick search there are a lot of 30cents+2.9% per transaction. I found a bit of overkill to drop 30cents every 1.5$.<p>I'm sure there is a lot of business out there that run through the same situation. Any suggestion ?
Paypal Micropayments is 5% and 5 cents.<p>That said, <i>strongly consider</i> anything you can do which pushes your average transaction value up above ~$20 or so. This is partly due to decreasing the bite of transaction fees but mostly because building a business on $1.50 transactions is really, really, really, really hard when Steve Jobs has not already arranged a captive audience with credit cards on file.<p>One of the traditional solutions in e.g. social games is selling a virtual currency in $10, $20, $50, etc increments and then using the virtual currency to effect small-value payments. For example, $10 gets you 7 dragon eggs, $20 gets you 15 (one bonus egg!) The thing you were thinking of selling for $1.50 now costs 1 dragon egg. This both helps you get your average purchase up, saves your processing costs, and also increases transaction volume by not having people feel like they're being asked for $1.50 on a frequent basis. (The fact that $10 doesn't divide evenly by 7 is not accidental.)
what kind of monthly volume are you expecting? are these cardless transactions? if they're cardless i dont really see a scenario where you can have $1.50 transactions and make any money. too high risk for the processor.<p>EDIT: if you don't have a couple months of volume to show a processor it makes it harder to get a good rate. brand new company with online transactions are pretty much highest risk category for a processor, therefore highest rate. fees the processor has to pay visa would be close to $0.50 probably