Electronic Payments Pricing Compared

Last week I presented the capabilities matrix that juxtaposed Mpayy with the other payment processing systems available for plug-in to any eCommerce website and for use to conduct payment processing for online sales that don't involve a web shopping cart.

Today, we present a comparison of the pricing for each of the various channels offered by each of the systems.



Mpayy wins in all categories on the basis of pricing, and was designed to do so. Mpayy is a multi-sided payments network of buyers and multiple types of sellers. There's a great article in the Harvard Business Review that indicates it is important to subsidize one-side of the network. Mpayy does this by providing the 1% Cash Back on purchase amounts over $50, 100 free Person-to-Person Transfers/month, and providing for $0 overdraft fees when users' checking accounts are empty.

On the Mobile Commerce side, Mpayy is well-positioned to take advantage of any growth in this new type of sale. PayPal does have a model, and is working with companies like Mporia which hosts mobile commerce websites for companies like Buy.com. As you can see, PayPal forces those merchants to pay through the nose for this unique capability, though those prices will come down as adoption of Mpayy grows.

PayPal rates are closer to those of Mpayy, though online selling merchants are increasingly in opposition to eBay/PayPal, which is restricting payments to sellers for up to 21 days for any transaction eBay deems questionable. Further, there is some evidence that sellers with a spotty track record and new sellers are being forced to use PayPal. Large retailers are reluctant to adopt PayPal for two reasons: i) eBay clears billions of dollars of merchandise competing with the retailers and providing eBay with a competitive advantage by possessing their data; and ii) "gray market" goods that move through eBay will undermine the retailers' own goods.

Google Checkout offers $0.20 + 2.00% for Internet Point of Sale transactions. However, Google only accepts credit cards, and increases indirect costs through the onus of integrating to their API's, including providing complete information on everything in a user's shopping cart rather than just clearing the transaction. While we have no direct evidence, this would suggest that Google is taking a loss on every transaction in light of credit card costs to merchants being so high. Further, our discussions with the largest retailers indicate it is unlikely Google Checkout will receive significant adoption among "MegaRetailer.coms" because they know the value of their data and don't want to give Google all of that information.

Revolution Money is on here because they are currently offering $25 account opening bonuses and claiming no fees. As discussed on Friday, Revolution Money does not have a merchant model, and funds sent through it are not guaranteed. Further, they require a pre-funding step rather than just treating their account as a pass-through account. Revolution Money is seeking a lead list for its credit cards, and they do have plenty of other fees built into the system should anyone run afoul.