There are fees and charges enough that you need to hand over your hard earned money for. One can hardly turn around without having to pay something for a help or a service. We all know this well, so it often pays to keep a rigid and focused eye on what you pay for at all times.
Sometimes it can feel a bit like having to compare pears and bananas, because what exactly are you paying for when there are multiple variables? When you have to decide on either fixed fees and percentages?
Administration fee, subscription and payment fee
Have you ever looked through a bill and suddenly discovered that there is an additional cost, under the term administration fee? Or what about a payment fee? As a starting point, it is completely legal to charge these types of fees on consumers, even if it’s more than what the companies themselves have to pay to their payment solution, such as Yourpay. But there are certain rules that must be complied with. For example, it should be clear that this is an additional fee that is charged further and not just added to the full amount. In addition, prices for the fees must be clearly stated. Customers must not be misled to believe think that they are paying one price and then charged another.
Of course, when figuring out what is more profitable, you need to put all the variables together. These variables can be support, start-up fees, additional services and subscriptions. With some providers, you pay your transactions with a fixed fee. With others, you pay with a percentage, but it is interesting to see which would save you the most. We have tried to make some different calculation examples.
We can easily agree that if we only take the percentage, which is usually above one, then it is most expensive in this way. Quick mental calculation says that for a transaction of DKK 100, where the transaction fee is 1.45%, it is more expensive than the fixed fee of DKK 1.
But, as we have just established, the other fees are often hidden under other variables. So therefore we believe that it should also be included.
The calculation for percentages
If our starting point is a company that has 1000 transactions per month, with an average amount of DKK 500, it will be some very different calculations.
For a single transaction, the company, with an acquiring agreement with Yourpay, would have to pay 1.35% of the DKK 500 (you can read more about our prices here). There is no subscription, no fixed fees and everything is included. The price for the transaction would therefore be DKK 6.75. With 1000 transactions of DKK 500, it will be a total monthly bill of DKK 6,750. It sounds like a lot when many of our competitors can get the transactions down to a fixed price called 1 kr. I’ll to admit to that.
The calculation for fixed fees
Når det er sagt, så lad os lave det samme regnestykke igen, men med alle variablerne. Lad os antage, at der ved vores konkurrent er et abonnement på 200 kr., et gebyr på support og forskellige tillægsydelser (det kunne være abonnementsbetaling, fakturabetaling, ekstra konto, diverse plug-ins eller noget helt femte) på sammenlagt 500 kr. Måske er der også et oprettelsesgebyr. Men det tager vi ikke med i beregning, da det oftest er et engangsbeløb. Regnestykket bliver så markant anderledes, men lad os starte med at tilføje abonnement og tillægsydelser til det faste gebyr. Hvis vi fordeler de sammenlagte 700 kr. ud på de 1000 transaktioner, så er prisen 0,70 kr. per transaktion. Altså, er det faste gebyr ikke længere 1 kr., men 1,7 kr. og prisen på 1000 transaktioner 1700 kr. Det var meget billigere, var det ikke?
Men hov, så var der lige kortgebyret. Det kan vi ikke komme udenom. Med en gennemsnitspris på 1,25% hos mange af vores konkurrenter, skal vi lægge de 1,25% til alle transaktionerne. Det betyder, at der skal lægges yderligere 6250 kr. til de 1700 kr. Altså, bliver den samlede månedsregning på 7950 kr. og så var det ikke længere så billigt.
The many percentages
Well, I’ve written that the card fee on average is 1.25% and yes, I know that it can be obtained much cheaper. I do not deny that. Even with us, you can go much further down, but often the criterion is also that you must have a much higher earning than 1000 transactions per month.
Nor am I saying that Yourpay is the only right one. My only point with this blog post is that you need to take into account all the variables, and do a thorough calculation before you get dazzled by fixed low transaction fees and hidden numbers. There are probably something behind it.