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[Commerce]Fee for payment options


Sauren
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Hi! 

I would like to see an option to charge money for using a partular payment method. The reason that some payment methods tend to get more expensive over time (Paypal does that quite a bit and demands a higher cut with regular intervals).

Some insight into our payment flow with clients:
- Client places purchase (Around a 3% fee) - This fee depends on the country and is an approximation. 
- We withdraw money in USD (3% fee. As that is not the home country, but we use it for payments to international partners)

Effectively making out transfer costs around 6% and I'm not willingly to eat a fee larger than 3.5% for payment processing without calculating this directly to the client. That said, I want to give our clients also the option to not be charged the additional fee if they choose an alternative payment method. 

As of such it would be nice to have the ability to add a fee for usage for a specific payment option. 🙂

Edited by Sauren
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1 hour ago, Sauren said:

Hi! 

I would like to see an option to charge money for using a partular payment method. The reason that some payment methods tend to get more expensive over time (Paypal does that quite a bit and demands a higher cut with regular intervals).

Some insight into our payment flow with clients:
- Client places purchase (Around a 3% fee) - This fee depends on the country and is an approximation. 
- We withdraw money in USD (3% fee. As that is not the home country, but we use it for payments to international partners)

Effectively making out transfer costs around 6% and I'm not willingly to eat a fee larger than 3.5% for payment processing without calculating this directly to the client. That said, I want to give our clients also the option to not be charged the additional fee if they choose an alternative payment method. 

As of such it would be nice to have the ability to add a fee for usage for a specific payment option. 🙂

Hey @Sauren, Jordan here. Thanks for putting in the suggestion! Would love to try and get a better understanding. Wondering... why not adjust the cost of your item to account for the fee(s)? 

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I've had a lot of conversations with different entities who dislike payment processor fees, and who inevitably come up with the idea of charging a premium for using a certain method of payment. While I'm sure there are processors where this is not the case, many have terms in their agreements that in order to use them you need to charge the same as payment via another method. As @Jordan Invision pointed out, you might consider repricing your offerings to factor in this cost as a function of conducting business, though it's understandable that you may not be able to do so for competitive reasons.

Review your agreements carefully to make sure that you won't run afoul of your payments processor in charging a fee for this that would not apply to those paying by some other means.

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2 hours ago, Sauren said:

(Paypal does that quite a bit and demands a higher cut with regular intervals).

Noticed you mentioned PayPal:

https://www.paypal.com/us/webapps/mpp/ua/useragreement-full#accepting-payments

See the section on No Surcharges.

Quote

You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions.

 

Edited by Paul E.
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10 minutes ago, Paul E. said:

I've had a lot of conversations with different entities who dislike payment processor fees, and who inevitably come up with the idea of charging a premium for using a certain method of payment. While I'm sure there are processors where this is not the case, many have terms in their agreements that in order to use them you need to charge the same as payment via another method. As @Jordan Invision pointed out, you might consider repricing your offerings to factor in this cost as a function of conducting business, though it's understandable that you may not be able to do so for competitive reasons.

Review your agreements carefully to make sure that you won't run afoul of your payments processor in charging a fee for this that would not apply to those paying by some other means.

 

5 minutes ago, Paul E. said:

Noticed you mentioned PayPal:

https://www.paypal.com/us/webapps/mpp/ua/useragreement-full#accepting-payments

See the section on No Surcharges.

 

 @Paul E. coming through like
 

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10 hours ago, Jordan Invision said:

Hey @Sauren, Jordan here. Thanks for putting in the suggestion! Would love to try and get a better understanding. Wondering... why not adjust the cost of your item to account for the fee(s)? 

I don't think that it's fair for me to adjust pricing for all clients just because one payment processor (out of multiple) has thrown out a major price increase of +3% for  our use case. I wish to continue to deliver the same value and services for the same price whenever possible 🙂 I don't want to punish our clients for a decision made by PayPal if possible. But if they still wish to use it, they can of course pay a part of the additional costs we make for using paypal (compared to other services like stripe).

I would say that charging 3% more to paypal users would be fair considering the price increase for withdrawal are increased with 3%.  

Also, in regard to the point. It states in my local version of the user agreement that it may only be done if law allows (Which it does over here, as it's illegal for one party to dictate the pricing of another party) and that they "discourage" using of difference pricing (Where I actually agree as this is not the best option. But when a party is around 6% I'm willingly to charge more to clients around 3% extra for new clients. It's a bit more subtle 🙂 I know it's common practice in my country to charge more for clients that wish to use paypal. 

(Note: It's not that something is wrong with a party having a fee, I'm happy to pay it. But at a certain point it can be too much. At around 6+% for all transactions that's definitely the case). 

Here the google translate version of the local user agreement:

 

 

Quote

 

PayPal does not encourage surcharges because it is a business practice that can punish the consumer, creating unnecessary confusion and rubbing and causing purchases not to be made.

You may only charge additional fees/surcharges for the use of our Services in accordance with laws that apply to you and do not exceed the additional fees you charge for using other payment methods.

If you take additional fees/surcharges from a buyer, you will, and not we, inform the buyer of the cost. We are not responsible to buyers you have failed to disclose any charges. You understand that it may be a criminal offence to charge an additional fee and/or not disclose the supplement to a buyer.

 

 

 

 

Edited by Sauren
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  • 2 months later...
On 1/30/2021 at 4:27 PM, Sauren said:

It states in my local version of the user agreement that it may only be done if law allows

If anybody using WHMCS, they have it in their marketplace

https://marketplace.whmcs.com/product/1294-payment-gateway-charges-for-whmcs

 

The other workaround for this transaction fee could be only allow user to buy using their account credit.

User can choose available payment method to top up. 

When they top up $100, we only credited them in their account the amount after the transactions fee. So if transaction fee is 6% + $0.30, user will be credited $93.70 into their account.

In this case users are not purchasing any goods or services from us and are merely opting to add funds in their debit account with us. They can choose to request a refund from this debit account at any time without ever making a purchase. These type of transactions can not be termed as a sale since the users is not buying anything from us at this point. Therefore, we can pass on the Transaction Fee levied upon us by PayPal to the users.

😊

Edited by Umaar
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  • 1 month later...

Let's take PayPal out of the view, It would be still very good to implement this, I could use it with Stripe(or any other Gateway).
Maybe even a "discount" for certain payment methods like "Crypto" so they get a 5% cheaper.
Yes, it would be already possible with Coupons and multiple products, but that would clutter the store full of duplicated products...

In general, it would be a perfect addition to IPS.
I tried adding TAX to certain Products/Payment methods, but it's just a mess in general.

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