E-Commerce Gateways

[Dave A]

Thanks, Karen.

I've been following this thread with interest. Not that I need the info just now, but you never know what might come in the future.

[Chatmaster]

I think this question is something many South Africans needs to be answered. We certainly need a solution to make eCommerce cost effective in SA. One of the primary reasons so many online business succeed abroad is the fact that they are supposed to offer products and services a little cheaper and at this stage it seems like a challenge to do so because of the expensive banking costs.

[Karenwhe]

Ok, I got back the answers from Neteller.

The short story, it is not cheap. If one has a good deal with local merchant account, I don't see a good reason to use Neteller, not really. I am being honest.

Here is the long story in summary:

Quote:
1. How can we repatriate funds to our company if using your services?
{HS}- Once a NETELLER merchant account is created you may choose the bank wire to withdrawal funds back to your company.

Merchant wire fees – Less than 7500 International 55.00 US
More than 7500 International 85.00 US

This in itself puts a lid on it. As that is only one side costs, then the bank in SA will add some fees also on certain scales they decide depending on the bank. If you need to withdraw often for cash flow and payments to suppliers the fees are running nice and making money for the house... as you know the house always wins....

Next they have withdrawal fees 12.75 USD and it takes 5 to 10 days, which can create a cashflow problem if one needs to pay suppliers with moneys sitting in that account.

Next, they send me a power point presentation for the EU, said they do more or less the same for SA.

In the power point you have another 3.9% in deposits certain cases (which is most of them unless you have a Turkish account or NT UK account = N/A).

The other thing is the limitation on amounts that can be withdrawn from what I understand this is due to the FSA (Financial Services Authority (FSA) an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000), which they have to comply with for anti-money laundering purposes.

These depending on the account can be limited to 1,9K, 19K, 48K, and you need real special request if you run over 288K. All US dollars of course.

I won't summarize the whole power point pages (lots of them), but the short story is that there are charges for the wire transfers, withdrawals and deposits that will just cost more than dealing with SA in SA, and it basically costs as much as having a local merchant account if not more in some cases.

When we work with the US we just ask them to wire transfer and it costs us less that what it would with Neteller as they have to pay their own costs and we only pay SA costs. But it is not for e-commerce sites.

Now, I am back at the waiting time to have maybe PayPal in SA or just open an overseas trust one day and get it over and done with .

Hope this helps.

[Karenwhe]

We certainly need a solution to make eCommerce cost effective in SA.

I think we are far away from that and the only viable solution for South Africans in my humble opinion right now is: MAKE MORE MONEY so that the fees don't count anymore .

I spoke to a person at a bank that deals with all this stuff and she put it simply, most (not all) SA merchant accounts don't make more than around +/- 15K per month even when their brick and mortar businesses run in the millions and multi millions. I was shocked. But she also told me that if the transactions go over into the hundreds of thousands per month the fees are very, very, very, low.

So that is what we have to do - make lots of money, simply put.

And I think (still working on it) I know how we (as business people) can reduce the costs with the banks and make the required amounts...... and have what they call, low-low fees .

[Chatmaster]

Something like a merged merchant account where transactions are going through one merchant account for multiple businesses?

[daveob]

"Super Merchant Account" -- probably exactly what the likes of Netcash and PriceTag are doing.

Difference with them is that the money is in an SA account and there are no international wire transfers involved to get your money on an almost immediate basis.

[Karenwhe]

Something like a merged merchant account where transactions are going through one merchant account for multiple businesses?

Close enough, not businesses, but it needs far beyond that. This as stand alone solution doesn't solve the entire problem by itself. Tried that already .

Like I said it is still in thought process and extensive research.

[SilverNodashi]

I should have said this before.... Don't use USA / UK / EU based merchant accounts. There are many South Africa payment gateways that will cost you roughlt R1 + 4%-6% per transaction, and some of them don't even have setup fees. With Netcash, for example, you don't even need a merchant account

You can try Mygate / Paygate / Netcash / VCS / Ivery, to name but a few.

Check this forum for more indepth info: http://www.webhostingtalk.co.za/forumdisplay.php?f=22

[RKS Computer Solutions]

Can anyone elaborate on pricing for Netcash, why have a corporate website to promote your product and then not give info out on your costs.. When I spoke to MyGate a long time ago, they changed their site within 48 hours to show pricing, why can't other companies show their prices?

[daveob]

from my experiences, Netcash credit card costs are 5% plus R1 per transaction.