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The best and cheapest solution to accept credit card payments online


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Dear friends,

I'm looking for a solution to acquire credit and debit card payments into my company's Thai bank account.
Via a payment link or other online form.
The annual volume will depend on the costs of the transactions but I guess if I can make in at around 2% then I can expect up to 300 000 USD per year to start with.
At the moment the rates offered by my bank (Krungsri) are around 3.5% which is not feasible for my clients. Also requires some paperwork which I don't think I can provide right away.

Any ideas, advice or personal experience to share please?
Thank you!

 

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Just one question when you write "At the moment the rates offered by my bank (Krungsri) are around 3.5% " and mention that this "is not feasible for my clients"

 

Do you REALLY expect that you customers will bear YOUR cost of doing/expanding business??? What kind of a very, very strange business mind do you have?

 

If I see a shop asking me to pay fees for using the credit card to pay for their goods/services, this shop will not see me again, plain and simple. You will LOSE customers, not win any. 

Edited by Swiss1960
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Dear Swiss friend.

What you're saying is good for retail business - a Family mart, gas station etc.

 

But if you have to send let's say a 30 000 USD payment - you have a choice between a USD 50-100 flat fee for a SWIFT transfer or a 3.5% credit card charge (which is USD 1050 in this case). I don't think you'd choose to pay an extra 1000 USD just for using a credit card.

But at 2% or less it would work for smaller payments where it is comparable to SWIT transfer rates.
 

Edited by anthos
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For 30 000 USD it doesn't but for smaller amounts it does.
I have a good amount of invoices around 5-10 thousand USD where my clients would consider paying 2% for credit card transaction instead if SWIFT.

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Omise is used by several of our clients. They provide WordPress and other plugins to make integration easy. The only downside with Omise is that they will withhold 7% VAT to ensure taxes are paid, which is fine if you are a Thai company dealing with Thai clients. For one of our clients, this was a deal breaker, because most of their clients were in the US and the VAT does not apply.

 

https://www.omise.co/

 

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On 9/28/2021 at 3:28 AM, anthos said:

Dear Swiss friend.

What you're saying is good for retail business - a Family mart, gas station etc.

 

But if you have to send let's say a 30 000 USD payment - you have a choice between a USD 50-100 flat fee for a SWIFT transfer or a 3.5% credit card charge (which is USD 1050 in this case). I don't think you'd choose to pay an extra 1000 USD just for using a credit card.

But at 2% or less it would work for smaller payments where it is comparable to SWIT transfer rates.
 

If it is worthwhile of you to expand the business, offer a 2% reduction for CC payments...customer pays the same, gets the conveninece and you get more turnover.

 

PH

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18 hours ago, anthos said:

For 30 000 USD it doesn't but for smaller amounts it does.
I have a good amount of invoices around 5-10 thousand USD where my clients would consider paying 2% for credit card transaction instead if SWIFT.

No, I would not consider paying YOUR credit card fees for YOUR business.... And I can tell you from experience in Switzerland, that the roll-over of merchant fees to customer did in fact lead to REDUCED sales. Customers dropped the wares in the shop, because they did not accept that additional fee and did not have enough cash in their pockets.

 

And the same happened to online-fees, for example with Swiss.com who tried to impose the credit card fees to the customer. Customers went to other travel sites which did NOT have such fees and Swiss airlines lost turnover. 

 

That of course stopped completely once the Swiss courts ruled it unconstitutional to have dual pricing for accepted payment options. Specifically, the Swiss courts also found, that cash handling for merchants is also an expensive solution and there is no "cash handling fee" imposed on sales. 

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5 hours ago, Swiss1960 said:

No, I would not consider paying YOUR credit card fees for YOUR business.... And I can tell you from experience in Switzerland, that the roll-over of merchant fees to customer did in fact lead to REDUCED sales. Customers dropped the wares in the shop, because they did not accept that additional fee and did not have enough cash in their pockets.

What you're saying is absolutely true for large companies like Swiss Air or retail chains.
In my case it's not the choice between cash and credit card.
It's a choice between SWIFT bank transfer and credit card.

 

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7 hours ago, Phulublub said:

If it is worthwhile of you to expand the business, offer a 2% reduction for CC payments...customer pays the same, gets the conveninece and you get more turnover.

I was thinking about it.
I'm trying to find a more affordable merchant solution first.
If 4% is the best that Thai banking market can offer then I might go with that.

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On 9/28/2021 at 2:23 AM, Swiss1960 said:

What kind of a very, very strange business mind do you have?

Ultimately it is built into the price one way or another. The OP is looking to make his price more competitive and increasing sales. What is strange is the very offensive way the question was stated.

Edited by jazzdog32095
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14 hours ago, anthos said:

What you're saying is absolutely true for large companies like Swiss Air or retail chains.
In my case it's not the choice between cash and credit card.
It's a choice between SWIFT bank transfer and credit card.

 

What I wrote is true for EVERY business and EVERY payment option that businesses offer to their customers. You offer services or goods to your customers and your website shows a price for that. As a customer, I will pay that price AND NOT A CENT MORE with a payment method that your website says that you accept. Having to cover YOUR cost for this payment option will drive customers away, plain and simple. If you think that accepting credit card payments costs you too much, then don't offer that payment option, plain and simple. 

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14 hours ago, jazzdog32095 said:

Ultimately it is built into the price one way or another. The OP is looking to make his price more competitive and increasing sales. What is strange is the very offensive way the question was stated.

Only woke sissies on a drip of political correctness find my question offensive. All others find it straightforward, honest and businesslike. 

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I would imagine any transfer of more than $10,000 would come under the scrutiny of the US Treasury Dept as being possibly money laundering no matter if by cash, bank transfer, or credit card.

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13 hours ago, Swiss1960 said:

What I wrote is true for EVERY business and EVERY payment option that businesses offer to their customers. You offer services or goods to your customers and your website shows a price for that. As a customer, I will pay that price AND NOT A CENT MORE with a payment method that your website says that you accept. Having to cover YOUR cost for this payment option will drive customers away, plain and simple. If you think that accepting credit card payments costs you too much, then don't offer that payment option, plain and simple. 

I don't do any online sales. 
It's all about the costs of transferring a certain amount of money to a Thai bank account from abroad.

Also my clients a 100% ok to have a choice of different payment options.
And my competitors also have the same choice for their clients.
So I don't see why I would want to offer only one more expensive payment channel.


 

Edited by anthos
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8 hours ago, fceligoj said:

I would imagine any transfer of more than $10,000 would come under the scrutiny of the US Treasury Dept as being possibly money laundering no matter if by cash, bank transfer, or credit card.

Why? Let's say you book a stay at Four Seasons Samui for 10 nights and send them 20000 USD or buy teak wood furniture from Chiang Mai for the same amount. What interest US government would have in that?
Krungsri bank only asked me a few times in the last 10 years to supply a copy of invoice for incoming payments exceeding I think 50 000 USD.. That's all the money laundering control I've seen so far. And my business is absolutely legitimate.

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On 9/29/2021 at 11:59 AM, anthos said:

If 4% is the best that Thai banking market can offer then I might go with that.

In the past it was common for Thai merchants to require 3% extra, if paying with foreign credit card, to cover their fee. This made me think that the rate was 3% in Thailand, so I wonder why you got quoted 4%. I say in the past, mainly because I have not tried to pay for anything with a foreign card in ages.

 

I am curious about your setup though, if you mainly cater to people abroad who pay you large amounts in USD, would it not make sense to incorporate in e.g. Delaware and setup card processing for this subsidiary? The rate you can get via a U.S. merchant account is probably closer to 2%, but it has been years since I last worked with credit card processing, and it all depends on your revenue, whether this is really worth the trouble and added expenses of having a U.S. subsidiary.

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There is a difference between a brick and mortar store accepting cc payments where an actual card is read and a pin (at higher amounts) or signature is requested and an online shop or service where the customer just fills in the details. The general rate for the first case is 2.5 to 3%, whereas in online it’s at least 3.5%, and as a starting merchant often over 4%. 
the problem is the increased risk for the creditcard company of fraud. That’s why when accepting online cc payments a bank will request that you have an established company and show your products and past sales and you’ll have to pay a bond covering around two months of expected payments. There are online providers who have far less requirements but then the fees are closer to 5% and it’ll take time to release the payment. 

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On 9/30/2021 at 2:30 AM, Swiss1960 said:

As a customer, I will pay that price AND NOT A CENT MORE with a payment method that your website says that you accept. Having to cover YOUR cost for this payment option will drive customers away, plain and simple

It is quite common in Thailand to put the fee on the customer, as mentioned in my previous comment, I have often had merchants tell me there is a 3% credit card fee, and if you buy air tickets via e.g. AirAsia, you get several payment options, and the fee for each various, e.g. doing netbank payment is often the cheapest.

 

You might be outraged by the visibility of merchant fees, but I actually wish the cost of using payment cards were transparent to the consumer, because different cards have different rates: 1.3%-3.5% for credit cards + a flat fee, and many debit cards have zero fees (but maybe a small flat fee, or monthly fee).

 

Often the issuing bank will get a cut of the fee, so your bank (if you are American) may try to lure you to get and use an American Express card (highest fees) by giving you a 1% cash back, or other rewards, so that means the merchant gets 3.5% less when you use this card, instead of your debit card, but you will be incentivized to use it, because for you, it is an advantage.

 

Notice how Apple introduced their own credit card and they give you 3% cash back when using that card to buy from Apple. You can basically see this as instead of adding 3% to the price of everyone who pays with a credit card, they give a 3% discount to people who use the Apple Card (where Apple presumably do not have to pay the credit card fee).

 

Other big merchants also have their own cards with benefits, which I assume is also to avoid the merchant fees.

 

Because the fee is not paid by the consumer, there is no natural competition occurring, bringing down the fees. I.e. if I had to pay 0% when using my debit card, but 2.5% when using my VISA card, you could be sure as hell, I would always use my debit card, even though VIISA may give me miles. But because it is instead the vendor who pays the 2.5%, I opt for the VISA card, where I get miles (hypothetically).

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2 hours ago, lkn said:

In the past it was common for Thai merchants to require 3% extra, if paying with foreign credit card, to cover their fee. This made me think that the rate was 3% in Thailand, so I wonder why you got quoted 4%. I say in the past, mainly because I have not tried to pay for anything with a foreign card in ages.

 

I am curious about your setup though, if you mainly cater to people abroad who pay you large amounts in USD, would it not make sense to incorporate in e.g. Delaware and setup card processing for this subsidiary? The rate you can get via a U.S. merchant account is probably closer to 2%, but it has been years since I last worked with credit card processing, and it all depends on your revenue, whether this is really worth the trouble and added expenses of having a U.S. subsidiary.

I think 3% is some sort of average. I've seen offers from 2 to 4% depending on transaction volumes. An entry merchant package is definitely around 3.5-4%. 
But there may be people out there who know more about it hence I'm asking here.

Yes, in other jurisdictions there may be lower merchant fees.
I get most payments from Russia where setting up a company to collect credit card payments would be too difficult and expensive (taxes, licensing etc.). Even though some Russian banks offer 2% and even smaller merchant fees.
I also wonder if any offshore banks can collect cc payments at 2% and I'd be able to send SWIFT transfers from there to Thailand. Looks a bit tricky though.

I just need a payment link solution, most simple. Still looks like 3%+ rates for SMEs are there to stay for a while.
My Thai suppliers accept credit cards without extra fees which is very handy and a get plenty of miles. But their volumes are huge so I believe they get 2% or less from their banks.

 

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Why not to have the payment transferred T/T to your Thai Baht account, as almost all foreign buyers do to Thai supplying companies. Of course, there is certain fee involved, usually $30 or less (that should be covered by the payer), depends on the transferring bank.  Or zero sometimes from Europe. In addition, the Thai bank kindly deducts another 500 Baht, sometimes less if smaller amounts.

      

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Posted (edited)
4 hours ago, Saanim said:

Why not to have the payment transferred T/T to your Thai Baht account, as almost all foreign buyers do to Thai supplying companies. Of course, there is certain fee involved, usually $30 or less (that should be covered by the payer), depends on the transferring bank.  Or zero sometimes from Europe. In addition, the Thai bank kindly deducts another 500 Baht, sometimes less if smaller amounts.

      

That's what we've been doing for the last 15 years. It's cheap, safe, the exchange rate is great, the bank staff kindly calls me to confirm the exchange rate every time we have incoming transfer and I got used to their fee (normally THB 700 or 800 in my case).
Would love to go on this way but lately there's a demand for CC payments, I'm being asked about it more often (everyone likes cashbacks and miles at someone else's expense, I can't blame them, I do it myself), so I wouldn't mind to offer another payment channel, so studying the feasibility now. My market is rather competitive and I earn 5-10% of what I receive so every 2-3% is sensible. Can't afford to give 20-30% of my profit to a bank for credit card processing,
I case of PayPal for example it's even more - 4.5% + ridiculous exchange rate.

Edited by anthos
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