Electronic Payments: PayPal vs. Credit Cards

Transcription

1 Electronic Payments PayPal vs. Credit Cards R1 Objectives Electronic Payments: PayPal vs. Credit Cards Credit Cards - 20,000 foot view New Realities Credit Card Industry Considerations What Is Your Business Model Comparative 1

2 Step 1 of 7 The customer submits his credit card for payment Step 2 of 7 Gateway manages the complex routing of the data on behalf of the merchant through the following steps/entities. 2

3 Step 3 of 7 Gateway passes the secure transaction information via a secure connection to the Processor. The Merchant Bank's Processor submits the transaction to the credit card network (like Visa or MasterCard). The credit card network routes the transaction to the bank that issued the credit card to the customer. Step 4 of 7 The issuing bank approves or declines the transaction based on the customer's available funds and passes the transaction results back to the credit card network. The credit card network relays the transaction results to the merchant bank's processor. The processor relays the transaction results to Gateway 3

4 Step 5 of 7 Gateway stores the transaction results and sends them to the website for the customer and merchant to see. Step 6 of 7 The merchant delivers goods or services to the buyer. 4

5 Step 7 of 7 The issuing bank sends the appropriate funds for the transaction to the credit card network, which passes the funds to the merchant's bank. The bank then deposits the funds into the merchant's bank account. This is called 'settlement', and typically the transaction funds are deposited into the merchant's primary bank account within two to four business days. New Reality PCI Compliance PCI Compliance PCI-DDS: (PA-DSS, PCI-PTS ) Payment Card Industry Data Security Standard Changing world changing security: Fraud, Theft, Global Mafia, Bad Habits Local Storage vs. Virtual Vault Storage: Determines compliance level Fine assessments: Monthly, Rate Level Compliance Frequency: Annual Certifiers & Testers: Many, Different Rates Certification Levels: Level 1 Level 4 Fees: $ 50 to Thousands www. pcisecuritystandards.org 5

6 New Reality Payment Methods Technology & Options - It is an ever changing world Traditional Counter Terminal Std. Online Merchant s Phone Apps ( iphone, Andriod, Next ) Phone Plug-in Device Card Swipes (need app) USB Computer Plug-in Card Swipes (need software / merchant account) ing Software - Built In or Module Fundraising Software - Built In or Module Texting - Donations Recurring, Virtual Check Web 2.0 Marketing Competition More due diligence Knowledge & Creativity Technology Vendor Choice / Option Choice Decision Considerations Direct vs. Indirect Costs Integrated vs. Nonintegrated Complexity Ease of Use Desired Goals Means of processing Costs Human Resource Element Degree of Automation Desired Commercial vs. Nonprofit - Business Model Technology Web/Website Integration 6

7 Merchant Cost Parts Potential Merchant Cost Elements Discount Rate % per transaction Transaction Fee Cost per transaction Monthly Gateway Fee Statement Fee Annual Fee Monthly Minimums Setup Fee Address Verification Fee Cancellation Fee Downgrade Fees Terminal Fees Negotiate Merchant Considerations Potential Merchant Considerations Support Hours Virtual Terminal POS Service Web Developer Services Recurring Days to clear Days to receive payment Live Chat Integration Solutions Reporting & Reconciliation 7

8 Google Business Model Different Needs / Different Considerations Manufacturer Nonprofit Mall / Street Vendor Professional Service Company Fortune 1000 Retail Store Franchise Retail Store Mom & Pop Startup vs. Maturing (Phase Change Planning) 8

9 Merchant Comparison Receiving Payments / Nonprofit Direct Costs Sage Merchant PayPal Payment Button Web Pay Std PayPal Business Discount Rate 2.19 % 2.2 % 2.9 % Transaction Fee Monthly Gateway Fee $ 20 0 $ 30 Report Fee Annual Fee (PCI) $ AVS Fee Setup Fee (Prof Services) Mobile Payments Offered Offered Offered Merchant Comparison Receiving Payments / Nonprofit Indirect Costs Sage Merchant PayPal Payment Button Web Pay Std PayPal Business PCI Compliance Annual Fee PayPal You Manage Leave/Bounce Rate No Yes No Seamless Website Integration Yes No Yes Software Integration Yes Yes Professional Services Shopping Cart POS POS Included No can integrate Must Integrate Contract Term No No No Cancellation Fee No No No Name on CC Merchant PayPal Merchant Statement Recurring Billing Yes No (Yes if add 19.99/month service) Yes 9

10 Merchant Comparison Receiving Payments / Nonprofit Services Sage Merchant PayPal Payment Button Web Pay Std Phone & Yes Yes Yes Support Basic Shopping Cart Yes Button Redirects No Software Integration Sage FR 50, PeachTree, MAS 90, Sage Acc/FR Products Export into Excel, QuickBooks, Quicken PayPal Business No, Professional Services Virtual Terminal Yes Yes Yes Web 2.0 Tools Yes No You build Execute CC from Yes some No No Software Invoicing SW specific Yes from VT Yes from VT Merchant Comparison Receiving Payments / Nonprofit Transaction Costs Sage Merchant PayPal Payment Button Web Pay Std Cost per $ Cost per $ Cost per (10) $ Cost per (1000) $25 auto recurring 1,047 Feature Add On 850 PayPal Business 1,025 Labor Costs Renewal Reminders Execute CC from Software 10

11 Merchant Comparison Receiving Payments / Nonprofit Bottom Line Sage Merchant PayPal Payment Button Web Pay Std PayPal Business Complete Solution for Nonprofits Quick Start Minutes More complex, more options professional services Moderate Easy Management Moderate Management Management Some Technology No Technology A lot of Technology Nonprofit & Commercial Start ups all industries More Commercial based Recurring Billing SW Integration Developer & API Functionality Must Transfer Money Manually Developer & API Functionality Knowledge & Creativity Your Ideas, Your Actions, You Will Do 11

12 Questions or Comments CONTACT INFORMATION: Non Profit Partners, LLC ppi.com MD: / DC: KY: /