Accept Online Payments via Credit Card from International Clients

juro

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Dec 7, 2006
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219
Hi, I run a web application development company here in Cape Town and some of my international clients would like to pay their invoices by credit card. We generally run projects in a time frame of 6 to 12 months, so there are not a lot of payments (think: deposit and final settlement) and the sums are around $5-10.

I used to use PayPal (also due to the integration with Harvest) but unfortunately PayPal has stopped allowing non-US companies to use the business account, which means that it is quite expensive (PayPal fees, FNB commission, crappy exchange rate, etc.).

Does anyone have a good recommendations to enable credit card payments for non-SA companies/individuals?
 

Ianf1

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Aug 5, 2007
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1,783
I have used payfast you can send them a link from the payfast website. Only done ZAR not US $.
 

juro

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Dec 7, 2006
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219
Yes, I think that is probably the best option at the moment. Thank you for your input!
 

Tomtomtom

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May 6, 2010
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I used to use PayPal (also due to the integration with Harvest) but unfortunately PayPal has stopped allowing non-US companies to use the business account, which means that it is quite expensive (PayPal fees, FNB commission, crappy exchange rate, etc.).

You don't need the business account for PayPal to use a business name and I don't think there's any difference in fees.

You need to run the numbers because even after commission and exchange spread you'll probably find PayPal competitive. Add to that it's trusted by US customers, and they will prefer to be paying in their own currency (otherwise they're the ones with unpredictable forex charges).

Also nothing stopping you from offering both.
 

juro

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Dec 7, 2006
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219
You don't need the business account for PayPal to use a business name and I don't think there's any difference in fees.

It used to be a flat fee only until they stopped that for non US businesses.

You need to run the numbers because even after commission and exchange spread you'll probably find PayPal competitive. Add to that it's trusted by US customers, and they will prefer to be paying in their own currency (otherwise they're the ones with unpredictable forex charges).

Paypal fees seem to be the following (from https://www.paypal.com/za/webapps/mpp/ua/useragreement-full#exhibit_A):

1. "Receiving Commercial Payments" ... Standard Rate: 3.9% + fixed fee, Merchant rate: 2.9-3.9% + fixed fee
2. "Currency conversion that occurs when receiving other payments (including Mass Payments or Payouts), withdrawing funds to your local bank account (if your PayPal balance is held in a currency other than your local currency) ..." ... 2.5%

FNB will charge the following (from https://www.fnb.co.za/business-banking/forex/paypal.html):
3. For the currency conversion: 1.5% of the ZAR amount

So it seems that in a best case scenario the total commission payable would be (best case): 2.9% + 2.5% + 1.5% = 6.9% up to (worst case): 3.9% + 2.5% + 1.5% = 7.9%. I have probably missed something.

Comparing that with Payfast's fee of 3.5% + R2 (promotional rate) + R8.70 (Payout fee), I'm struggling to see how Paypal is competitive. Yes, there is the benefit of having US clients paying in USD - but then I would need to slap on the additional 3.4% onto the invoice.

On a hypothetical invoice of $1,500 this is how the two compare (using an exchange rate of R13.50/$):

Paypal
$1,500 - $43.50 (2.9%) - $36.4125 = $1,420.0875
Converted to ZAR: R19171.18125
R19,171.18125 - 287.56771875 = R18,883.61353125

Payfast
$1,500
Converted to ZAR: R20,250.00
R20,250.00 - R708.75 (3.5%) - R2.00 = R19,539.25
R19,539.25 - R8.70 (payout fee) = R19,530.55

That is a different of ~ R647, or roughly 3.19%.
 

Tomtomtom

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May 6, 2010
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822
1. "Receiving Commercial Payments" ... Standard Rate: 3.9% + fixed fee, Merchant rate: 2.9-3.9% + fixed fee
2. "Currency conversion that occurs when receiving other payments (including Mass Payments or Payouts), withdrawing funds to your local bank account (if your PayPal balance is held in a currency other than your local currency) ..." ... 2.5%

There's no (2) with the arrangement in SA, because you'll withdraw in USD and FNB handles the forex, hence (3). But if your customers are not US-based then the fee is slightly different again afaik.

FNB will charge the following (from https://www.fnb.co.za/business-banking/forex/paypal.html):
3. For the currency conversion: 1.5% of the ZAR amount

So it seems that in a best case scenario the total commission payable would be (best case): 2.9% + 2.5% + 1.5% = 6.9% up to (worst case): 3.9% + 2.5% + 1.5% = 7.9%. I have probably missed something.

You're probably in the ballpark there. Moving money across the world is not cheap, but then again access to the other 99% of the market isn't a triviality.

Comparing that with Payfast's fee of 3.5% + R2 (promotional rate) + R8.70 (Payout fee), I'm struggling to see how Paypal is competitive. Yes, there is the benefit of having US clients paying in USD - but then I would need to slap on the additional 3.4% onto the invoice.

Why not do that then? If you don't handle the forex, it will appear on the customers' statement instead, out of your control and unpredictable, yet it still forms part of the total cost of using your services vs. your competitors'.

So maybe think about it the other way around: price that $1500 example at $1550 and it's WYSIWYG for the customer if they pay in USD. (I'm assuming most clients are US; if most are EU you may want Euro billing.)

Then you can offer a 3% discount if they prefer to pay in Rands, with the warning that they may incur forex fees that may or may not be less than 3%.
 

juro

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Joined
Dec 7, 2006
Messages
219
There's no (2) with the arrangement in SA, because you'll withdraw in USD and FNB handles the forex, hence (3). But if your customers are not US-based then the fee is slightly different again afaik.

Ah, gotcha - that makes sense.


You're probably in the ballpark there. Moving money across the world is not cheap, but then again access to the other 99% of the market isn't a triviality.

We should all be using BITCOIN ... so much for unpredictability :D


So maybe think about it the other way around: price that $1500 example at $1550 and it's WYSIWYG for the customer if they pay in USD. (I'm assuming most clients are US; if most are EU you may want Euro billing.)

Then you can offer a 3% discount if they prefer to pay in Rands, with the warning that they may incur forex fees that may or may not be less than 3%.

That makes sense, thank you for that (and your other comments)!
 
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