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One of the many concerns facing a company choosing a merchant gateway is what their monthly and annual costs will be in having a particular vendor. The initial choice in that process is whether to go with a full merchant account solution like ModernAuthorize or to go with a third party gateway like 2Checkout, WorldPay, or Paypal. These third party gateways attract customers just breaking into the business by offering the prospect of low initial costs. However, a review of the following chart demonstrates that while these offers can seem promising at first glance, they will cost you more money even at very low income levels. Notice the higher discount rates and transaction fees compared to the "MA Low Rate" and "MA No Minimum" plans.
Fee Structures
| Fee Structures |
| Discount Fee | Transaction Fee | Monthly Fee | Annual Fee | Setup Fee | |
|---|---|---|---|---|---|
| PSIGate | 3.75% | 0.50 | $39.95 | $0.00 | $0.00 |
| PSIGate(CDN) (approx. USD) | 3.75% | 0.37 | $29.32 | $0.00 | $0.00 |
| 2Checkout(USD) | 5.50% | 0.45 | $0.00 | $0.00 | $49.00 |
| WorldPay CDN (USD) * | 3.35% | 0.44 | $51.00 | $0.00 | $399.00 |
| WorldPay Int (USD) + | 5.45% | 0.44 | $51.00 | $0.00 | $399.00 |
| PayPal CDN (USD)* | 3.40% | 0.41 | $0.00 | $0.00 | $0.00 |
| Paypal Int (USD)+ | 3.90% | 0.41 | $0.00 | $0.00 | $0.00 |
Lets take a look at a very typical example to see how the math works. The following example assumes a startup webhosting company with 300 customers averaging $15.00 per transaction for monthly sales of arround $4,500 over 1 to 2 servers.
| Entered Info- Transactions Per Month: 300 | Average Sale: $15.00 |
| Discount Fee | Transaction Fee | Total Monthly Fees | Annual Fee | Total Yearly Fees | Gross Income | Net Income | |
|---|---|---|---|---|---|---|---|
| PSIGate (CDN) | $168.75 | $150.00 | $358.70 | $0.00 | $4,304.40 | ||
| PSIGate(CDN) (approx. USD) | $168.75 | $110.70 | $308.77 | $0.00 | $3,705.24 | $0.00 | $-3,705.24 |
| 2Checkout(USD) | $247.50 | $135.00 | $382.50 | $0.00 | $4,639.00 | $0.00 | $-4,639.00 |
| WorldPay CDN (USD) * | $150.75 | $133.20 | $334.95 | $0.00 | $4,418.40 | $0.00 | $-4,418.40 |
| WorldPay Int (USD) + | $245.25 | $133.20 | $429.45 | $0.00 | $5,552.40 | $0.00 | $-5,552.40 |
| PayPal CDN (USD)* | $153.00 | $123.00 | $276.00 | $0.00 | $3,312.00 | $0.00 | $-3,312.00 |
| Paypal Int (USD)+ | $175.50 | $123.00 | $298.50 | $0.00 | $3,582.00 | $0.00 | $-3,582.00 |
Notes: *Paypal US refers to transactions by US merchants in US dollars from customers within the US + Paypal Int refers to transactions by US merchants in US dollars from customers outside the US.
Notice that this webhost will benefit from saving of several hundred to several thousand dollars per year. If you would like to see how this might affect your business, please try our Calculator and enter your own figures.
In certain situations, the cost benefit of ModernAuthorize is only slight or even not a cost savings at all. However, even in these situations we highly commend that there are ten other very good reasons to use a ModernAuthorize account, any one of which would be sufficient reason to choose it.