[Discuss] payments on the web over 10k?

[Tom Metro]

Jack Coats wrote:
> Eric Chadbourne wrote:
>> A client of mine needs a store on his site that can accept payments well
>> over $10,000 per transaction. Paypal can't cut it. Any suggestions?
>
> If I remember the banking rules, PayPal might not want to deal with
> this because it REQUIRES a report be made to the Feds for each
> transaction at that level.

It is my recollection as well that there are extra federal reporting
requirements for transactions of $10K or greater.


> Might be better to go to a bank to get a commercial account and a
> charge card merchant account.

Yes, quite possibly.

A typical online payment setup consists of these elements:

1. shopping cart or other e-commerce software;
2. payment gateway (API used by your shopping cart);
3. merchant account (a service that takes credit card transactions,
verifies them, and obtains funds from the CC provider);
4. bank account;

and you'll find varying combinations of bundling. PayPal, for example,
does all of these (they sort of provide a bank account; they're happy to
hold your money and let you spend it through a debit card). Most vendors
you'll find in the payment space do #2 and many bundle #2 and #3. Most
banks will provide #3, in addition to #4, of course.

I'd say if Braintree, which does #2 and #3, handles $10K+, then probably
any other payment gateway provider will as well, as the reporting
requirements likely fall on the underlying bank providing the merchant
account or the bank account.

The percentage-based transaction fees tend to be set by the merchant
account (#3) provider, so you'll benefit from shopping around for that
portion. Braintree, for example, will charge you 2.9% for their bundled
solution, or you get your own merchant account and they'll sell you just
the gateway (#2) service for $50/month. (There are also fixed
per-transaction fees of $0.10 to $0.30, but irrelevant for large
transactions.)


Eric Chadbourne wrote:
> These guys look interesting, https://www.braintreepayments.com/,
> but I have never used them.

I don't have direct experience with them, but they are the vendor Google
has endorsed as the successor to its Google Checkout service, which it
is shutting down[1] in a few months.

1. https://support.google.com/checkout/sell/answer/3080449


Stripe (https://stripe.com/) provides the same level of bundling, with
an emphasis on developer friendly APIs. Their pricing is the same 2.9%
as Braintree and most other bundled providers.

At $10K+ the commission fees are going to be significant, so you'll want
to shop around. Ease of integration might end up being a secondary
concern, as it won't take many transactions before you'll break even on
higher up-front setup costs.

For example, take a look at Amazon Payments
(http://payments.amazon.com/), which offers a turn-key service covering
#1 (a "Pay with Amazon" button) through #3 and charges commission on a
sliding scale, with transactions of $10K+ costing 2.2%.

 -Tom

-- 
Tom Metro
Venture Logic, Newton, MA, USA
"Enterprise solutions through open source."
Professional Profile: http://tmetro.venturelogic.com/