Ecommerce Payment Gateways

Ecommerce Gateways is a confused topic indeed. So the purpose of this article is to outline a few costs, pros and cons of different setups.

Keep in mind that the prices noted change regularly. They may have been accurate at the time of writing this article, but they should be confirmed before proceeding.

Paypal Account Types:

There several PayPal account types, here are four of the most common:

Express Checkout: Domestic Fees start at 2.4% + 30c (3.4% + 30c cross border). No monthly fees and no cancellation. API Interface. [more info] [Integration Guide] [Get Started Guide][API Reference]

Website Payments Standard: Domestic Fees start at 2.4% + 30c (3.4% + 30c cross border). No monthly fees and no cancellation. HTML Interface. [more info][Integration Guide]

Website Payments Pro/ Payflow Pro: Domestic Fees start at 2.4% + 30c (3.4% + 30c cross border). AU$30 monthly fee. Virtual terminal included. HTML Interface. Possible to use Direct Payment API, which hides PayPal. Website Payment Pro is available in US, CA and UK, Payflow available in AU [more info] [API Reference][Developers Guide]

Payflow Gateway: $500 setup fee, $130 monthly fee, 18c per transaction. Visa/Mastercard/Amex/Diners/JCB and PayPal payment options. Available in AU. Need an account with NAB,CBA,WestPac, ANZ or St George. Payflow Pro is a merchant hosted facility, Payflow Link is a Paypal hosted facility and has cheaper rates. [more info]

More Info:http://coding.smashingmagazine.com/2011/09/05/getting-started-with-the-paypal-api/

PayPay Comparison Chart: https://www.paypal.com/au/cgi-bin/webscr?cmd=_profile-comparison

Paypal Express and Website Payment Standard Accounts:

Paypal accounts are free to initiate. There are other Paypal accounts that charge a service fee, but we will not cover these in this article.

Transaction Fees start at and 2.4% + 30c per transaction for a business account. These fees are reduced depending on the monthly sales you do. If you do over $150,000 a month, the Fees drop to 1.1% + 30c.

If you transfer less than $150 out of your paypal account into your bank account, you get slapped an additional fee

Pros:

You don't get charged if you don't sell anything
Cheap for small shops

Cons:

Paypal holds your money until you transfer it to your bank account. If there is a problem - PayPal holds the money. If a buyer disputes a transaction - your account gets locked!
PayPal is governed by US laws - not Australian laws.
In 2010 PayPal requested additional information from several existing Australian merchants (copies of passports). Paypal locked their accounts without warning until this information was submitted. Some of these merchants could not (or were not willing) to submit the information and as a result these merchants lost access to their paypal merchant account and the funds within.
PayPal's customer support is appalling.

Cost Case 1, $200,000:

$200,000 of transactions per year, averaging at 2,000 x $100 products.

Total Annual Fee: $4,800 + $600 = $5,400

Cost Case 2, $50,000:

$50,000 of transactions per year, averaging at 1,000 x $50 products.

Total Annual Fee: $1,200 + $300= $1,500

Merchant Accounts with Third Party Gateway:

These vary from bank to bank. Fees also vary from bank to bank. The information below should be checked for your own case with the bank directly.

At the time of writing this page, the banks offered the following Merchant-Hosted API interfaces...

Bank:	NAB	Westpac	ANZ	CommBank	Bendigo
Plan:	Transact API	Payway API	eGate	Commweb	MIGS
Method:	XML API	Client API + SOAP	API POST	Client API	API POST
Merchant Facilty Setup:	inc below	$110	inc below	?	inc below
API Setup Fee:	$199	$220	$99	?	$195
Monthly Charge:	$35	$22	$39.95	?	$39
Min Monthly Service Fee:	$22	$22	$29	?	-
Transaction Fee:	$0.35	$0.165	none	?	none
Credit Card Fee - Standard Cards:	2.2%	1.1%	1.8%	?	1.45%
*Credit Card Fee - Premium Cards:**	3.2%	1.1%	1.8%	?	1.45%
Annual Fee	$28	none	$29.95	?	none
Early Account Closure Fee	$150	$550 within 3 years $105 thereafter	$250	?	$250 within 1 Year
Accepted Cards	Visa MasterCard (AMEX with difficulty)	Visa MasterCard AMEX	Visa MasterCard AMEX (3.25%)		Visa MasterCard AMEX

Please consult your bank for updates and confirmed quotes. The information above is indicative only for accounts with $50,000/annum transaction volumes, $100 transactions amounts at the time of our enquires.

*Premium cards are International, Corporate, Commercial, CUP and Platinum cards.

Cost Case 1 (NAB), $200,000:

$200,000 of transactions per year, averaging at 2,000 x $100 products.

First Time Setup fee: $199.

Total Annual Fee: $200,000*2.2% + $700 + $35*12 + $28
= $5,548 + third Party Gateway Costs

Cost Case 2, $50,000 (NAB):

$50,000 of transactions per year, averaging at 1000 x $50 products.

First Time Setup fee: $199.

Total Annual Fee: $50,000*2.2%+ $350 + $35*12 + $28
= $1,898 + third party Gateway Costs

Cost Case 1 (Bendigo), $200,000:

$200,000 of transactions per year, averaging at 2,000 x $100 products.

First Time Setup fee: $195.

Total Annual Fee: $200,000*1.45% + $39*12
= $3,368 + third Party Gateway Costs

Cost Case 2, $50,000 (Bendigo):

$50,000 of transactions per year, averaging at 1000 x $50 products.

First Time Setup fee: $195.

Total Annual Fee: $50,000*1.45% + $39*12
= $1,193 + third party Gateway Costs

SSL certificates are required, which also helps for customer confidence.

Pros:

The bank looks after the security
Governed by Australian Laws
Payments go straight into your bank account automatically.
Better phone support

Cons:

More expensive for small shops
Not all Banks have an API interface.

Comments

0 #1 John Horgan 2011-08-16 11:33

ANZ are not forthcoming with technical information for integration, and Wespac had difficulty setting up a account. So, at this point in time, ANZ and Wespac are not our recommended merchant service providers.

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