I’ve been quiet, but things are moving.
I’ve got almost fully-functional e-commerce functionality built into the new site. I’ve got secure SSL pages working, I’ve fully debugged every scenario I can think of (WRT credit card transactions). I’ve got real-time stats going for the premium users. I dont have tips going yet … but that isn’t far from the infrastructure that’s in place.
Now I’ve hit a hurdle. Its a big one. Its simply not possible to do small-sum credit card transactions to international customers from Australia. I cant charge international customers 5USD for a service/product, the payment infrastructure just wont cope with that. Here’s the run down:
I’m in Australia. I dont want to charge in Australian dollars, its not ‘international’ … and people will get weird sums on their credit card statements.
If I charge in USD, the banks will use the Swift interbank system for translating the USD amount into Australian dollars. It costs anything from $10 to $16 *per transaction* to convert from USD to AUD! So a transaction of $5 will cost me $10-$16!
Solution 1: charge large sums … doesn’t work for my business model.
Solution 2: get a multi-currency account based in Australia. The only Australian bank that offers this service is the NAB. By having a USD account in Australia, I can avoid that Swift interbank charge. But now there’s a new problem … multi-currency accounts cost $1200 to set up, have a substantial monthly fee and depending on the maturity of your business, they require a floating account balance of 5-20k USD! That’s out of my league.
Solution 3: use PayPal’s Payflow Pro gateway. But it costs $150/month … and you still need a merchant services account (usually around $50/month).
Solution 4: get a USD bank account in the US. I dont know if this is possible, let alone legitimate.
Solution 5: take my business out of Australia.
I keep thinking that surely this is wrong, there’s gotta be a solution for this scenario. Maybe I havn’t researched enough … and then I found this discussion on a Google group, which confirmed my fears… that there’s simply no easy solution for selling smallish sums to international customers.
I’m still researching. I’ve found that Amazon FPS is one of the only payment gateway solutions that caters for micro-payments. Unfortunately, they only sell their services to merchants with a USD credit card and a US address.
Most credit card gateways take a percentage (like 3%) plus a transaction fee (like 30c). So if you want to sell something for $1 .. you lose 33c (one third). But Amazon FPS has special pricing for transactions under $10 … the commission is 5%, and the transaction fee is 0.05. So if you sell something for $1 … you only lose 10c, which is reasonable and viable. But I dont live in the US 🙂
Its going to take some effort and thinking outside the box to jump this hurdle …