Choosing the right Merchant Account when running an online store can make a huge difference to your success.
Having an e-commerce business means primarily taking money by Credit or Debit Card over the internet, and that means you need a card processing gateway and merchant account. We usually recommend that our clients start of with the popular online payment processors like PayPal or Google Checkout, however, after your business takes off, we recommend looking at other merchant accounts and payment processing gateways that offer a lower cost per transaction.
Below we shall compare some popular merchant accounts and card processing gateways.
1. PayPal
PayPal seems to be the default choice for fledgling and established e-commerce businesses alike. They are a recognised brand and provided you stick to their rules are a good choice for processing payments online. Starting up is free and you only pay per transaction at a rate of 3.4% plus 20p. So on a £100 transaction your fees would be £3.40 (at 3.4%) + 20p = £3.60
2. Google Checkout
Similar to PayPal in many ways, Google Checkout is often offered side by side with PayPal as a payment choice. Again they start at 3.4% + 20p per transaction too. So £100 transaction would cost you £3.60
Both Google Checkout and Paypal offer cheaper rates as you accept more money.
3. CardSave
CardSave is a good stand alone Merchant Account. For a low monthly fee you can take dramatically reduce your card processing fees. The monthly rate varies depending on your business and the amount of money you transact. CardSave can cost as little as £19.95 per month. Unlike PayPal and Google, CardSave differentiate between Credit and Debit cards, meaning you pay a lower rate, as Debit Cards only cost a few pence per transaction.
Cost Comparison
So how do they all stack up?
Let’s say your site does £1500 in sales in a given month and this is made up by 30 transactions. (15 Credit Card / 15 Debit Card).
SagePay
£20 (Payment Gateway) + £15 Merchant Account + £17 PCI Level 1 + £10 Virtual Terminal
+ £43.50 transaction fees
= £105.50
PayPoint (approximate)
£30 (Payment Gateway) + £44.95 transaction fees (at 2.95% as of June 2011)
= £74.25
PayPal or Google Checkout (approximate)
3.4% transaction fee + 20 pence per transaction
= £57
CardSave (approximate)
£19.99 (Payment Gateway) + £18.55 transaction fees
= £38.50
If you’re spending more than £30 on processing fees a month right now, I’d strongly suggest you click here for more details about CardSave and request a callback. Quote RXHOST for preferential rates to see how much you could save.
NB: Prices correct as of 31st August 2011 – Data from CardSave
