How can I have an Electronic Transaction without the heavy fees?

Discussion in 'Growing and Managing a Business' started by Chrisj0401, Sep 12, 2009.

  1. Chrisj0401

    Chrisj0401
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    How can I have an Electronic Transaction without the heavy fees?

    I was thinking of just making my own Electronic Transaction Service Database, just for my companies. I think this would be cheaper, and can easily avoid most or all outrageous electronic transaction fees.

    Is there any fees that Electronic Transaction Service companies pay to government or something? (Paypal is a good example of an Electronic Transaction service company.)
     
  2. sigma

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    Well, to set up a new online payment processor (or electronic transaction) is very hard, you need to be very good on the banking system, and you need to promote it very hard to get user. Paypal get many user because of the ebay at the beginning stage. You need to have strong support to implement new online payment processor.

    And yes, you need to pay tax to government, but the amount will depend on your country
     
  3. Chrisj0401

    Chrisj0401
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    Okay so, would it be much more cheaper to setup my own service for only my companies? I dont want to provide service to anyone, just use it for retail sales from my company.. I think it should be cheaper since the database is smaller than say, paypal, so less maintenance costs, no marketing costs since its only for internal use.. Should be much cheaper than Paypal or using another Electronic Transaction Service Firm, right? I just want to avoid the heavy costs paypal and most Electronic Transaction Services charge.. And pay a straight forward cost of having my own Electronic Transaction Service for internal use.
    I understand it may be hard, but I think having my own internal service like this working for my companies I can save cash in the long run from not paying bank fees or other Electronic Transaction Service fees. I think investing into building my own Electronic Transaction Service it will just pay off in the long run very well. And as more and more people use electronic payments, sooner or later electronic payments will be 100% of payment transactions. I just think avoiding the large fees from current Electronic Transaction Services, I can get more profits. Right?

    I wouldn’t need to promote it at all, I only want it for internal use. When a consumer calls, we take their card # and run the card # with our system instead of paypal or whatever.. get me? Not for the public. No support needed, just my sales reps I want to use the service.
     
    #3 Chrisj0401, Sep 12, 2009
    Last edited: Sep 12, 2009
  4. GekiDan

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    I can see that lots of people are starting to make their ideas for another pay processor but I'll doubt that it will really become successful if there's Paypal around. Most people nowadays use Paypal for their transactions and only a few of them use Alertpay and others.
     
  5. Chrisj0401

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    I just want to know if my idea of running my own Electronic Transaction Service for my companies, for internal use only, is the cheaper way than using paypal's high priced fees.. Which we all know paypal recently upped there prices, and sooner or later they'll just keep raising those prices for more and more profits.
     
  6. Thador

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  7. Draker

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  8. Chrisj0401

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    I mean wouldn't it make sense? My own database would be smaller, meaning less maintenance costs. My own database is for private internal use only, to keeping it small. My own database has no need for marketing, save costs. As for Paypal and others needs profits to pay for those costs, and to provide expansions. Those costs gets added onto fees thats passed onto clients/consumers, and more just for profit use. Paypal and others are for profit, my own database will be non-profit and only providing a service to my own businesses. Yea it could cost a lot if I had a giant database like paypals, but it's doubtful to have that kind of size when I only have my own transactions. Theoretically it should be cheaper, if not please explain why it wont.
     
  9. GekiDan

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    Well, if it's for your own company, it could work. I mean, instead of ATM cards, you can use online processors like you are saying. But what I'm really thinking is how can you make it connected to your employee's bank accounts?
     
  10. Chrisj0401

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    No no.. I want something like paypal, or what the banks provide for Electronic Payment. I'll accept the same payment methods, credit cards, ATM cards, and checking accounts, that the clients/consumers can provide to pay for products/services. My employees just enters the info and the currency goes into the business account. It can be done online, or via phone orders, or even have my own card processors if we have any brick & motor stores.
     
  11. Fergal

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    Use PayPal or another payment processor. It will be much cheaper than setting up your own service. Trying to do too much yourself will mean that you will spend less time on your core business. Every business has to outsource some services, so that they can concentrate on what they themselves are good at.
     
  12. Chrisj0401

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    well yea as a starting up company or whatever, it would be cheaper... But what for giant corporations (like Walmart), would it comes out to being cheaper for them to use their own service?
     
  13. sigma

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    Volume make the different due to the large set up fee. You need to calculate the break even point.

    For example, assume that their payment transaction set up fee is 500K and monthly maintenance fee is 10k and compare to their sales which is 50M (charge from other payment transaction is 200k), then their break even is only 3 month. In this case, it is worth to invest on own payment processor.

    Try to calculate this before make decision. If the break even take long time, you will facing problem on the flow cash, and it will risk your financial.
     
  14. Chrisj0401

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    Okay I'll plan on doing that, and assign some extensive research into it before doing so.. Now as other agree that it may be possible to save some cash doing this idea, I'm going to try it once I start running a 8 figure company or something. I want to be as efficient as I possibly can without causing any damage or negative effects.

    Thanks guys!
     
  15. sigma

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    Research and analysis always needed when implement something new. By the way, suggest to work out on the risk analysis too.
     
  16. GekiDan

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    Well, he can also make a table of advantages and disadvantages of his own pay processors. If there's a lot of advantages, then it might work. But if it there's alot of disadvantages, I think you'll just ris your own money on nothing.
     
  17. Fergal

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    Why spend time thinking about and researching this idea now? Is it not a distraction from setting up your business. Your time could be better spent on other areas of your business. Then when your business has grown to a certain size, you could start researching this idea.
     
  18. sigma

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    100% agree. For the small company and new set up company, it will be better to have more flow cash. It is not worth to invest big amount on this kind of system. It doesnt matter to let those payment processor company like paypal earn some money if you get business. Only consider to make your own processor once your company become big, mature or "branded"
     
  19. pakidesigner

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    western union is best in this regards. bank transfers are very heavy and time taking. same is paypal it deducts a lot of money, but western union is the best option. google also paying by western union to all over india
     
  20. Chrisj0401

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    Yea I meant once my company grows to a certain size and I have enough cash annual revenue coming in, then I would look into applying more efficiency in the company. I think being as efficient as possible can save a lot of cash.. even if they're as small as ideas of using better energy efficiency, like self powered building, ect..
     

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