To PayPal or not to PayPal
When starting with Kwakkelflap, I didn't know many payment processors. So I went with RegNow, which seemed the most popular at that time. It's not bad, but the fees are high: 20% on each sale, excluding any affiliate fees. They do have a '6.9% + $1' plan, but there are disadvantages:
- The 'extended download service' is enabled by default. This means the customer will pay an extra $7 US if they forget to disable it. It actually makes our product more expensive, without any real gains. So I feel it's actually a '6.9% + $8' plan.
Take a Watchdog - O - Matic professional license: with the 20% plan, I receive $32 on each sale. With the 6.9% plan, I'd get an actual $36.24 but a 'virtual' $29.24. So, yes I will receive more, but the customer has to pay more. I can simply increase my price if I want to earn more for each sale. The result would be the same for the customer. $40 + $7 (download service price) - 20 % = $37.6. So I would earn more at 20% and the customer has to pay the same. He/she won't have the download service off course, but they don't need it anyway. I don't want the customer to pay more than what I put on my site. It will probably give them a bad feeling if they have to pay an extra $7 out of nowhere. So this is something that's not acceptable. Note: these calculations are not 100% accurate, there are other factors to.
- You no longer have fraud control. This means that if an order is fraudulent and there is a refund, you will eat the cost. '6.9% + $8 + $x for fraudulent orders' anyone?
- You are not allowed to have any other payment processor. So I'd have to remove PayPal from my buy page. This is not as bad as it sounds. If I check my orders, about 99% is with RegNow and 1% with PayPal. And RegNow features PayPal too, so customers who prefer PayPal can still use it. Also, with PayPal, I have to answer each order manually.
But I just don't understand why I can't have another payment processor. They say it is to protect the affiliate system. Well, I have news for RegNow: I use a RegNow system that makes sure customers from affiliates don't see the PayPal option. They are redirected to another buy page that only features RegNow as an option. Affiliates, rest assured. You will get credit for the sale due to this system. So what's the problem? Don't you trust your own system?
I won't change to the 6.9% plan anytime soon. I am checking out other payment processors. Most of them are ok, but they don't have an extensive affiliate system as RegNow. I don't want to win $1 for each sale, if I lose 1% of my sales. I'll have to check if it's worth it.
- The 'extended download service' is enabled by default. This means the customer will pay an extra $7 US if they forget to disable it. It actually makes our product more expensive, without any real gains. So I feel it's actually a '6.9% + $8' plan.
Take a Watchdog - O - Matic professional license: with the 20% plan, I receive $32 on each sale. With the 6.9% plan, I'd get an actual $36.24 but a 'virtual' $29.24. So, yes I will receive more, but the customer has to pay more. I can simply increase my price if I want to earn more for each sale. The result would be the same for the customer. $40 + $7 (download service price) - 20 % = $37.6. So I would earn more at 20% and the customer has to pay the same. He/she won't have the download service off course, but they don't need it anyway. I don't want the customer to pay more than what I put on my site. It will probably give them a bad feeling if they have to pay an extra $7 out of nowhere. So this is something that's not acceptable. Note: these calculations are not 100% accurate, there are other factors to.
- You no longer have fraud control. This means that if an order is fraudulent and there is a refund, you will eat the cost. '6.9% + $8 + $x for fraudulent orders' anyone?
- You are not allowed to have any other payment processor. So I'd have to remove PayPal from my buy page. This is not as bad as it sounds. If I check my orders, about 99% is with RegNow and 1% with PayPal. And RegNow features PayPal too, so customers who prefer PayPal can still use it. Also, with PayPal, I have to answer each order manually.
But I just don't understand why I can't have another payment processor. They say it is to protect the affiliate system. Well, I have news for RegNow: I use a RegNow system that makes sure customers from affiliates don't see the PayPal option. They are redirected to another buy page that only features RegNow as an option. Affiliates, rest assured. You will get credit for the sale due to this system. So what's the problem? Don't you trust your own system?
I won't change to the 6.9% plan anytime soon. I am checking out other payment processors. Most of them are ok, but they don't have an extensive affiliate system as RegNow. I don't want to win $1 for each sale, if I lose 1% of my sales. I'll have to check if it's worth it.
posted by Wouter Dhondt at
11:44
7 Comments:
Interesting way to look at it. As a new vendor, I only have the new way to choose from. But I'll keep my eye on this stuff.
Thanks
Ray
www.getsafe-n-secure.com
By
Anonymous, at 12:17 AM
Couple of points you've missed here. 1. You make $1.40 for each Extended Download service the customer buys. So, $1.40 of each $7.99 extended download sale goes to you.
2. In the event of a refund, Regnow still gets their 6.9% plus $1.00 - they don't make you pay for the $7.99 extended download Fee! they refund this, but you also lose your $1.40 profit on this. So for a $40 product, you might lose around $3.00
3. Not sure about fraudulent orders. I don't think I've had to pay for a fraudulent order, only the profit is lost.
By
Anonymous, at 7:47 PM
Thanks for pointing these out.
1. Instead of $36.24, I'd receive $37.64 on the "6.9% plus $1.00" plan. So the result is the same if I increase my price with $7 as described ($47 - 20% = $37.6).
2 and 3. I probably got these mixed up. It is a disadvantage if you offer a money back guarantee. You actually lose money on a refund.
By
Wouter Dhondt, at 9:08 PM
I am a software vendor.
I used RegNow before. I closed the account.
I opened an account at SWreg. It is much better and cheaper!
I would go with SWreg or share-it.
www.swreg.com
www.shareit.com
By
Anonymous, at 11:05 AM
If you want web-site templates, go to SWReg.com . If you want the e-commerce provider, however, go to SWReg.org .
:)
By
Tony, at 12:29 AM
That was an interesting analysis indeed.
In the '6.9% + x$' plan that I purchased, the 'extended download service' is forced on my customers. Customers can not even opt out of this service.
How do your compare RegNow with ShareIt?
Thanks,
Madanu,
MakeLogic,
http://www.makelogic.com
By
Madanu, at 6:48 PM
I haven't tried Shareit. But it's also a Digital River processor, and they are switching to the x$ + y% plans too (starting January 11th). It is cheaper than RegNow, but not by much. It might not be worth switching. I'm not sure if they charge a fee for signing up, otherwise you can create an account and check it out.
By
Wouter Dhondt, at 6:59 PM
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