Death to merchant accounts

posted by Jeff | Monday, April 25, 2016, 3:00 PM | comments: 0

After 15 years, I am finally without a merchant account. These are the things that you once needed in order to accept credit cards. I first obtained one in 2001 when I started taking orders online for CoasterBuzz Club. I also used it when I had to essentially resell tickets for events we did. This arrangement resulted in three fees: A monthly fee for the account itself (plus an additional cost for the company that did the Internet gateway for the charging), a per-transaction fee and the discount fee, which is a percentage of the transaction. Collectively, this meant about $35, plus 3.7% + 25 cents on each transaction. That means even if I didn't take a single payment, I was spending $420 a year. After using three different banks over the years, it kept going up. Granted, if you process cards in person, swiping or using the chip, the discount rates are much lower, and if you're doing volume, the monthly fee basically doesn't exist. However, for someone who has never exceeded $10k in a year by very much (when I was selling tickets), it's way too much.

For the last few years, I was hoping that Square would finally open a gateway and start taking Internet-based transactions. They're the people who have been sending out the little swipe readers for phones for years. They finally did start doing ecommerce, recently I think, but the API and documentation aren't super clear. Then I noticed that Stripe was doing it, and you could literally be up and running in under an hour. Sure enough, the payment part of the code for the resurrected PointBuzz Premium took a half-hour tops. What's nice is they also generate receipts by email, and you can set the name to be anything you want on the credit card statements. Their discount rate is lower, but transaction fee higher, compared to Square, but it's basically a wash.

In any case, I'm really pleased with Stripe. They have tokenization and such available too, so you could do recurring charges if that was your thing. It's the speed to market that impressed me the most. They delay the first deposit by a week, but otherwise, it's remarkably fast to get started. Huge thumbs up.


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