Is there a credit card charge on top of realex charge?

YouBuyLocal

Small businesses accepting credit cards
Are there any small businesses accepting credit cards that can advice me on all of the costs involved?

Credit card companies seem to charge 26c per transaction + a % - or so I was told by a small business owner the other day.

If accepting online via realex what does the credit card company charge on top of the realex charge? Realex say they don't charge for first 350 transactions, just a flat 29euro fee, then 12c per transaction after they reach 350.

How does this compare to accepting credit cards through normal routes? I heard the credit card readers cost 3500 euro, or is that a deposit in case they get damaged/stolen?

I know the difference between web merchant accounts and normal merchant accounts and the different circumstances in which they are accepted, so no need to get into that.

Does the bank charge much of a fee to get a web merchant account, or is it just a one off administrative fee?

YouBuyLocal

I am just wondering if it is cheaper to accept credit cards online or face to face.

Like if I am a small sandwiche shop and I sell a cup of tea for 1euro by credit card, then the processor takes 26c (I think, so I was told), but if I am with realex then the first 350 transactions are free, so does that mean I get the whole euro?

Then take the merchant acc fees, I was told they can be from 30-50euro per month, and then the processor like Realex or Sagepay charge 20-30euro on top?

So include your internet connection/wifi and whats that less than 100euro per month?

Where are the other costs? Does the merchant provider (Elavon) take a transaction fee or only a flat fee?

BuffyBot

Thread moved to a forum where you'll find more experienced posters in this field

TheCostumeShop.ie: Ronan

You probably know some of the below but to be helpful for the other readers i'll try explain it all to avoid confusion.

For online business you need a Merchant and A Processor.

Merchants, like Elavon or Streamline charge a fee for their service which is a percentage of sales for credit cards and a fixed fee for (or sometimes a variable charge) for debit cards. Rates vary depending on your business sector, size and negotiating skills. Fixed might be 1.3% - 2.25% and laser / debit cards 17c to 29c for example.

On top of this you pay The Processor / Gateway (Worldnet TPS / Sagepay / Realex) who charge per transaction, they might bundle the first few hundred and say their free if you pay a monthly fee but this is just so they get more money because you might not have 350 transactions per month (~9c each) so they get a guaranteed spend. Transaction fee's could be from 9c to 17c per transaction for the payment gateway.

For offline businesses you pay the merchant fee as above, but not The Processor / Gteway fee. However you do have to pay the Merchant for rental on the chip and pin credit card Machine, which it seems they like to tie you into for long periods of 2years+. The payment for this is a Fixed fee OR a Variable fee depending on the card type as above.

You cannot use Processors / Gateways (Realex / Worldnet TPS) to accept payment in a shop.

The €3,500 you are mentioning is probably a deposit against fraud, some businesses sectors or business owners without a track record will be asked to put a security deposit down to get a merchant account. For a business like wedding dresses (massively high risk) this could be up to €100,000 of a deposit. If the business shuts down or you close the account you can reclaim this money but until then it's dead money.

YouBuyLocal

Realex reponse:

"With regards to the Realex fee's they are taken by direct debit on a monthly basis. So if a transaction for €10 goes through your website, you will receive the full €10 no fee's will be taken out of any of your transactions. The merchant service fee's work in the same way, you would pay a monthly direct debit to the bank rather than them deducting their charges from your transactions."

So they don't mention any transaction fee from the likes of Elavon, just a fixed direct debit charge for merchant services.

When they say: "The merchant service fee's work in the same way, you would pay a monthly direct debit to the bank", is that Elavon, owned by BoI, or the other comparable service providers, or just BoI or AIB?

TheCostumeShop.ie: Ronan

Yup, you can not use a Gateway (Realex) without a merchant account. Merchant Service providers include Elavon (partner with BOI), Streamline (partner with Ulster Bank) and AIB Merchants (partner with AIB Bank but are not the same institution as one might think).

Really what they are saying in the above is that you get paid the full amount, then they send you an invoice and take their fee's back at the end of the month via DirectDebit.

YouBuyLocal

Ok, so its a direct debit, but the money they extract is a percentage of sales + a fixed fee?

The Realex correspondent says they work "in the same way [as Realex]", but Realex take a fixed €29 below 350 transactions. I presume that just means when they take payment, as opposed to the amount or the type of payment structure (like transaction charge, % or fixed fee). Fairly misleading.

I'm still stuck at the point where a small business owner said to me that the charge for taking credit card is 26c, which is why so many places only accept them for purchases of over 10euro.

But online the charge is (only talking realex here, I know Sagepay is different) 29euro fixed + €0.12 per transaction over 350 + merchant fees, which seem to vary wildly in cost and structure.

TheCostumeShop.ie: Ronan

Are you talking online or offline, as mentioned they are different.

There is a fixed fee on debit cards OR a variable fee on credit cards. Sagepay is similar to Realex in terms of them both being Gateways.

Example being, Spending 10 Euro online using debit cards could be

10 - processor fee (12c in your example) - Merchant fee (26c in your example) = 9.62.

10Euro using Credit Card:

10 - processor fee (12c in your example) - Merchant fee (2%) = 9.68.

Other fixed costs you have online are SSL certs and PCIDSS compliance costs scans. Offline you have terminal rents for your chip and pin machine.

YouBuyLocal

I am comparing online with off-line credit card fees - as debit cards are being phased out I am not as concerned with them, but other interested readers may be.

I am doing this because in the coming years, maybe this year, it will be practically important to create mobile merchant accounts (just speculation), which will be face to face in terms of collection but paid via online networks, through smartphone, and it will be easier to track the identity of the parties in the transaction because of mobile phone numbers, facebook, pin-numbers, etc...

This will also be more secure because credit card numbers will be stored by companies like Realex instead of having to show the card numbers to cashiers and other unpredictable parties in the process.

It will also not cost as much in terms of hardware, as you won't need a chip and pin machine.

Now, I am not saying people will get rid of physical cards or companies of the chip and pin machines, as there will be a lengthy period where both systems exist.

So thats why I am comparing the costs of online and off-line costs.

My conclusions are that merchant service costs vary so wildly based on the specific circumstances of the businesses that off-line and on-line companies basically pay the same but then there is the cost of the "SSL certs and PCIDSS compliance costs scans." I don't know what it means but I will find out.

Thanks a lot

TheCostumeShop.ie: Ronan

YouBuyLocal wrote: »

debit cards are being phased out I am not as concerned with them, but other interested readers may be.

Erm there is zero chance of debit cards being phased out in the next fifteen years at least, not sure where you get your info from.

YouBuyLocal wrote: »

I am doing this because in the coming years, maybe this year, it will be practically important to create mobile merchant accounts

I think you should look into Carapay, which is run by Colm Lyon same guy who founded and runs Realex. It's in Beta at the moment so i'm not quite sure what I am allowed say about future features but check it out as it's an Irish company and few people in this field are as capable at changing a market as Colm.

YouBuyLocal

Oh yeah, sorry, Laser cards are being phased out, not debit cards, my mistake