ARC – PayPal and Credit Cards

[blowlampParticipant @blowlamp]

It's not Bitcoin that we need to worry about. Just have a look at these links to see what's happening to our money.

Bail-in Powers and National Debt Clock

The upper-left cell in the debt clock link (US NATIONAL DEBT), started the year at just under $17,000,000,000,000 if I remember correctly. Looking at the current figure, it seems to be rising at ~ $1,000,000,000,000. per year. The UK is in the same boat I'm afraid. It's just a matter of time before things go pop.

Bitcoins have only ever gone missing when the passwords have been handed over to others (Mt.Gox etc), or insufficient attention has been paid to the security of the passwords.

Martin.

[Andrew EvansParticipant @andrewevans67134]

Thanks for the clear explanation Ketan

[NJHParticipant @njh]

Bitcoin

Can I use it for.my weekly shop at Tesco, or to buy a beer in the local or to put petrol in the car or to take out a sub to model engineer. In fact what CAN I use it for? .. And where do I get them?

N

Edited By NJH on 08/08/2014 20:56:08

[Michael GilliganParticipant @michaelgilligan61133]

Posted by NJH on 08/08/2014 20:53:56:

Bitcoin

In fact what CAN I use it for?

.

Norman,

Apparently you could use it here … see the second logo, from the left, at the bottom of the page.

MichaelG.

[Enough!Participant @enough]

Posted by JasonB on 08/08/2014 13:36:05:

The other way to do it would be to loose the charge in the retail prices but allow a £1 discount for non CC purchases. All the MEs would be knocking down your door as they like a bargain

I think you probably meant that humorously, Jason but in the early days of credit cards here in Canada, it was against the merchant agreement with the bank to apply a surcharge to use the card. (I guess the banks felt it would reduce the cards' acceptance with the public.) A number of merchants did just as you suggest, offering a discount for cash and apparently that was a sufficient loophole in their agreements because they got away with it.

I suspect the same ban on credit-card surcharges still applies here since I can't recall ever seeing any stated directly. Some merchants have a slightly different (and perhaps more blatant) scheme now. They state that the prices quoted are already discounted for cash. Credit-card purchases are then subject to the full retail price which is 3% more. This tends to be small companies working to very narrow margins such as computer parts suppliers.

As far as the additional fee described in this thread for CC users but not others, I don't see the logic myself. I know it sounds all nice and "socialist" to charge the actual users for the overhead costs that they cause, while not charging those that don't cause them but logically that should lead to the same attitude with other overhead costs.

For example, I'm sure spending hours on the phone talking to customers who demand a lot of attention (everyone has them) costs quite a bit. Should those who never trouble the retailer pay for that? Should everyone pay for the fact that some people will return product for the most trivial of reasons while others don't? There are probably many other things.

The point is, all these, including the merchant's CC fees, are overhead costs which one expects will be burdened on the whole customer base when setting the selling price of the goods. It doesn't seem fair to single out one item and one group of users.

My own view is that if I was faced with CC surcharges it would be a discouragement …. particularly if Paypal was also limited and I was purchasing overseas (where I have no other sensible options).

[EmgeeParticipant @emgee]

My own view is that if I was faced with CC surcharges it would be a discouragement …. particularly if Paypal was also limited and I was purchasing overseas (where I have no other sensible options).

This is very true in most cases where sending or receiving payment from outside the UK, Paypal fees are very much less than bank charges.

Emgee

[jaCK HobsonParticipant @jackhobson50760]

Posted by Ketan Swali on 08/08/2014 16:04:07:

I think what you are saying is that our site is secure,

I think so. But my information cannot always be trusted e.g it isn't googleplay, it was google checkout which stopped at end of last year.

[Ketan SwaliParticipant @ketanswali79440]

Posted by Emgee on 09/08/2014 00:00:22:

My own view is that if I was faced with CC surcharges it would be a discouragement …. particularly if Paypal was also limited and I was purchasing overseas (where I have no other sensible options).

This is very true in most cases where sending or receiving payment from outside the UK, Paypal fees are very much less than bank charges.

Emgee

Hi Emgee,

I agree with both of you, that PayPal offers an easy option to pay for overseas customers. I also agree that there is an issue of bank charges relating to bank transfers, which can be high. Bank transfers should not be confused with overseas debit/credit card payments.

On the flip side, when referring to fees relating to debit/credit card v.s. PayPal, generally, it is costing us about 1% more than dc/cc to receive PayPal payments from overseas customers. Obviously, this is not the buyers problem. As a buyer, I too use PayPal to pay an overseas seller who offers the service.

With PayPal, for us as a recever of funds, it is more an issue of security, and the revocable nature of the funds being tendered, without guarantees. Depending on country of dispatch of PayPal funds, and nature of the buyers relationship with PayPal, the PayPal guarantee is variable or non-existent, but in ALL cases loaded in the buyers favour in the first instance, until challenged. The recovery process for the seller is well drawn out.

Recently, I saw an advert where PayPal is promoting services to larger import/export businesses. Having studied International Commercial Law and Finance back in the day, I sometimes wonder if they or any of their up and coming new business customers have any clue about INCOTERMS or ICC Rules relating to International Trade, to which all banks abide. Yes, I agree that bank charges are high, but considering the revocable nature of funds on offer through PayPal, I dont really think that PayPal really cares about rules or regulations which result in seller or buyer dissatisfaction. The business model works for them as they have a monopoly

Thinking about it, I don't really think that most of my U.K. competitors have a clue about INCOTERMS or ICC Rules, and they still run successful businesses

'Its all good while the sun is shining'…but when things go wrong with PayPal, it creates an irritation, which sometimes does not allow you to sleep through the night. Its not a question of monitory value, it is a point of personal principal, and every persons principals are different. Believe me, removing PayPal from our offering can have a sizable effect to our sales, but it is not always 'just about the money'. Only time will tell it I have to bury my principals.

Ketan at ARC.

[Ketan SwaliParticipant @ketanswali79440]

Hi Bandersnatch,

There is no 'socialist' view in our decision making process. This is just a commercial decision with or without logic, depending on your point of view. The other examples of 'overheads' which you gave are not 'constant/continuous' daily every transaction event for us. In % terms, the situations of extra attention or returns are 'minor events' in conducting our business. Payments by credit cards in % terms are 'constant' direct major cost events effecting a good % of transactions, which, if not controlled or balanced in some way, has a direct effect on profitability of our business. I hope you understand my explanation, even if you do not agree with it.

Yes, we are a small business. If the surcharge on cc has detrimental long term effect, we will have to make a commercial decision at that time, for how to address it: Bury it as an overhead and take the hit? May Be. Bury it as an overhead and increase prices as suggested? don't know if the market will accept it. Today, customers have more choice on Ebay, Alibaba and the like. Legal and Illegal operations are springing up every day on these platforms. For example: Many on this forum know of operations in Portsmouth operated by Chinese – illegally – in my opinion, with 20+ doddgy companies operating out of one unit with dummy names, which the U.K. Government working hand in hand with Ebay chooses to ignore, because the idea pleases the masses. Recently, Chinese students studying in the U.K. are even setting up ebay stores, getting products in from their parents/relations factories and selling products through ebay to finance their U.K. studies. If you know where to look, you can get these 'engineering products' at prices which are cheaper than the Chinese factory can export itself, let alone the cost at which an importer can buy!

HMRC/Government does not really give a s**t when it comes to the above situation, because it is a 'victimless crime' in their eyes..Where is the regulation when it comes to them?. If HMRC/Government chooses to, they CAN do something about it. But they wont until it is too late. I have spoken to senior officers in HMRC, and politicians, without success. In Canada – where you are from – a similar discussion was had about six years ago by a person I know, with a senior Canadian Government official. He was ignored. He closed his factory. Last year, the very same government official came begging to him to offer him incentives to re-open the factory…because the government could not afford to pay the unemployment bill in the area. Simply laughable..Can you guess what he told them?

My point is, if we have to bury certain costs in our product costs as overheads, we have to consider global competition too, and at the same time comply with U.K. regulations, to which MANY ebay or Alibaba sellers DONT. There is no finger pointing here. This is just an observation of the environment in which we have to stand and operate. We understand this, and there is nothing we can do about the competitive nature of the market. We just make commercial decisions which are subject to review at all times. No SOCIALIST agenda.

Ketan at ARC.

[Enough!Participant @enough]

Sorry you took such offence at my use of the term socialist, Ketan …. perhaps it wasn't the best word. I did quote it to soften it and it was a small (not capital) "s". I just meant it in terms of a "sense of fair play to all" (misguided or otherwise )

>how to address it: Bury it as an overhead and take the hit? May Be. Bury it as an overheadand increase prices as suggested? don't know if the market will accept it.

Are you so sure that the market will accept CC surcharges more easily? It would be risky, I think, to rely on the encouragement of a few sycophants in this respect.

[Michael GilliganParticipant @michaelgilligan61133]

Ketan,

For what it's worth … I think the small surcharge that you propose in your opening post is entirely reasonable: You have been open and honest in explaining the situation, and you offer a "no-cost" alternative.

I really don't think we could ask for more.

Just as a matter of interest [for the justifiably paranoid amongst us]: Do you also accept payment by Postal Order?

MichaelG.

[Ketan SwaliParticipant @ketanswali79440]

Hi Bandersnatch,

Sorry, no offence taken at all

I really dont know if the market will accept cc surcharge easily. Yes, you and many respected elders on here have suggested that this could be a risky option. Dont really know until I try.

It was risky when we pulled out of exhibitions. Similar discussion took place at that time, but I do appreciate that this is a different thing all together.

Its a bit like throwing dung up against a wall and seeing if it'll stick. If it doesn't, then we review the…

Life is too short to just 'wonder' what if..

Ketan at ARC.

 

Edited By Ketan Swali on 09/08/2014 16:38:34

[Ketan SwaliParticipant @ketanswali79440]

Hi MichaelG,

Yes we do still accept Postal Orders and cheques. We ask people who wish to pay by this method to call/telephone and check availability. If in stock, and if they wish to place an order, we allocate the stock to them against an order number, give them the total amount for the PO or cheque, and await receipt for the same. This way, correct amount is sent by the customer, to avoid disappointment. Unfortunately, we do not take back orders. We only sell what we have in stock. We do not wish to hold on to peoples money if we do not have an item in stock.

Ketan at ARC.

[Michael GilliganParticipant @michaelgilligan61133]

Another "correct" answer, Ketan

Thank You.

MichaelG.

[Steve WithnellParticipant @stevewithnell34426]

My vote would be for passing merchant fees straight through, transparency is good. So if people really want to use their Platinum AMEX card they can, but they pick up the 4.5% (or is it 6%?) merchant fee for the privilege and debit card users pay nothing. Seems fair to me.

Steve

[Ketan SwaliParticipant @ketanswali79440]

Posted by Steve Withnell on 09/08/2014 17:40:00:

My vote would be for passing merchant fees straight through, transparency is good. So if people really want to use their Platinum AMEX card they can, but they pick up the 4.5% (or is it 6%?) merchant fee for the privilege and debit card users pay nothing. Seems fair to me.

Steve

LOL Steve,

To be fair to AMEX, their merchant charges have come down a lot, close to VISA and Mastercard Credit Cards…say to around £2.70 average per web transaction by the time you pay all handlers in process, so very roughly 2.7%, which in some way can be regarded as cheaper than PayPal.

We stopped taking AMEX some five years ago, because we probably put through about 5 to 10 transactions through the system per year!…most of them for one customer…who frequents this forum.

Apparently AMEX has just signed some special deal with some major U.K. banks in order to push sorry 'promote' the AMEX card to such banks customers, so look out for some great deals from AMEX by end of this year you al.

Ketan at ARC

[John Stevenson 1Participant @johnstevenson1]

So what's three quid in bitcoin ?

[V8EngParticipant @v8eng]

If a credit card is used to purchase items, does the trader receive immediate payment, or do they have to wait under some sort of monthly settlement type system?

Edited By V8Eng on 09/08/2014 22:26:23

[Ketan SwaliParticipant @ketanswali79440]

Hello V8Eng,

This depends on sellers agreement with the service provider. In ARCs case, we get the funds within two to three working days after we accept the amount authorised against a debit/credit card for an order.

Ketan at ARC

[NJHParticipant @njh]

"So what's three quid in bitcoin ?"

Is that paying or receiving?

N

[Gordon WParticipant @gordonw]

It's about parity with the magic bean.

[blowlampParticipant @blowlamp]

Posted by John Stevenson on 09/08/2014 22:03:46:

So what's three quid in bitcoin ?

That would be 0.0085 BTC or 8.50mBTC

[Oompa LumpaParticipant @oompalumpa34302]

Posted by V8Eng on 09/08/2014 22:25:43:

If a credit card is used to purchase items, does the trader receive immediate payment, or do they have to wait under some sort of monthly settlement type system?

Edited By V8Eng on 09/08/2014 22:26:23

Next day even or two to three days at most for normal sellers of goods and services ie. people like Ketan who sell a product, have a good financial portfolio and don't have excessive chargebacks. However, if you are running a gambling, pornography or ticketing website the best you can hope for is payment after twenty eight days with a rolling reserve as a percentage of your take. For example, if you take £1000 in a twenty eight day period you will likely get 80% of it and the Merchant Provider will keep back 20% – IF you have a good financial position. I personally know one person who has £500,000 on deposit with a major High Street bank as "security" as his business is perceived as "High Risk" and this is the norm for the area he trades in.

It isn't straightforward but the Banks are actively searching for business at the moment so, as always, it is time to renegotiate the charges and fees

Finally, I think it is very brave of Ketan to be upfront with the charges and I wish more people operated in such a transparent way. It has buggered me for my Paypal purchases though and Ketan can look forward to yet another creative purchasing scheme from me

As some of you know, I recently bought some bearings. Now, it didn't matter whether I bought one or a hundred and one – the postage was "free". I can't see that personally but at least the price you are looking at is what you are going to pay. I really don't believe the old excuse of Plus VAT because it is a business either. Just obscures the true cost to many. For example, if I was – as a small business – trying to raise capital for say a new machine costing ten thousand pounds I wouldn't go to the bank and say "lend me ten thousand pounds" would I? I would need £12,000 to cover the VAT. Yes, I know, if you are VAT registered you claim it back.. But not everyone is and they are the majority.

graham.

[VicParticipant @vic]

I like the convenience that PayPal provides. In most cases you just hit the PayPal button then enter your password, no faffing around entering address, credit card number etc.etc.etc. Many traders have lost my business by not accepting PayPal for this very reason. Like others, I also won't expose my Bank account by using a debit card online.

In the first instance I will continue to buy from sellers that comply with my present (PayPal or CC) buying criteria. Only if I have difficulty sourcing what I need will I change the way I buy things. This is nothing personal, it's just habit/past experience, convenience and security.

I must add that I'm buying very much more stuff online from eBay than I ever expected. Mostly due to very low or zero postage costs and the sheer convenience.

[Ketan SwaliParticipant @ketanswali79440]

OK,

So, on another thread, Chris Denton has pointed out issues relating to ARC failing to accept PayPals Access card product, and the problems which followed. I would like to move the said conversation here, in the appropriate thread.

In all fairness to Chris, this post is not directed at him in anyway. It is directed at the PayPal product. At some point in the near future, ARC will update the payment page on its website to say that for security reasons, we currently do not accept PayPal or related cards, e-payment/virtual payments.

After reading PayPals link here:**LINK** (thank you PM for the link), I can further understand why a person may choose to consider this product from PayPal, especially where a seller refuses to consider PayPal, and the buyer has funds in their PayPal account to pay with. Two points come to my attention:

In its comments, PayPal says:

1. It is 'like' a debit card. (but its not really )…we come back to the VW advert!…its like a VW..but its not really …Come to think of it is it better or worse in the current climate

2. In their terms and conditions link https://www.paypal.com/uk/webapps/mpp/accesscard-terms point 2.1, it says 'Your card is an e-money product; it is not a credit, charge or debit card.

This means that it will also cost ARC more to accept and process it, in processing charges. Its another way for PayPal to get around the system for companies who do not want to accept PayPal.

Once we rejected/abort the authorisation – i.e. did not take Chris's money, PayPal kept his money for over a month and then returned it to him.

You may agree or disagree, but at present ARC still prefer to keep away from considering PayPal and its related products. Once, again, please accept my apologies for the inconvenience.

Ketan at ARC.

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