Entrepreneurship & Small Business

Easiest way to accept credit cards payment on website

  • Last Updated:
  • Dec 11th, 2017 6:34 am
Newbie
User avatar
Dec 4, 2017
5 posts
1 upvote
Montreal, QC
I'd stay very far away from Paypal...

My recommendation is Shopify for the ecommerce / shopping cart solution, and they have their own integrated version of Stripe which they call Shopify Payments for credit card processing. It's well done and extremely easy to start something with them.
[OP]
Newbie
Jan 20, 2017
71 posts
11 upvotes
thej0ker wrote:
Dec 6th, 2017 8:35 pm
I'd stay very far away from Paypal...

My recommendation is Shopify for the ecommerce / shopping cart solution, and they have their own integrated version of Stripe which they call Shopify Payments for credit card processing. It's well done and extremely easy to start something with them.
But doesn't using shoppify force one to buy hosting from them?
Deal Guru
Aug 2, 2010
11046 posts
2269 upvotes
If you have any significant US revenue then you might want to consider having a US credit card processor (which deposits funds into a US bank account you own) in addition to a Canadian one in order to save money by not having to pay the 'cross border fee' that all credit cards charge. The Cross-Border fee applies to any transaction when the country codes of the merchant and the cardholder differ.

The cross border fees charged for V/MC/Amex is 0.80% if US customer cardholder is charged in USD or 0.40% if US cardholder is charged in CAD.

I have 2 websites for one of my businesses, one for the US market in USD and one for the Canadian market in CAD as it makes total business or reasons other than the cross border fee. The savings in eliminating the cross border fee are substantial as 90% of my business is from the US. As an example, if you had just $10K/mos sales in the US and billed in USD you would save $10,000 x 12 x 0.80% = $960/yr. I am many multiples of this so my savings are very substantial and it costs me nothing extra to have a US credit card processor set up and a US-domiciled bank account.
Jr. Member
Feb 18, 2014
158 posts
27 upvotes
eonibm wrote:
Dec 9th, 2017 11:41 am
If you have any significant US revenue then you might want to consider having a US credit card processor (which deposits funds into a US bank account you own) in addition to a Canadian one in order to save money by not having to pay the 'cross border fee' that all credit cards charge. The Cross-Border fee applies to any transaction when the country codes of the merchant and the cardholder differ.

The cross border fees charged for V/MC/Amex is 0.80% if US customer cardholder is charged in USD or 0.40% if US cardholder is charged in CAD.

I have 2 websites for one of my businesses, one for the US market in USD and one for the Canadian market in CAD as it makes total business or reasons other than the cross border fee. The savings in eliminating the cross border fee are substantial as 90% of my business is from the US. As an example, if you had just $10K/mos sales in the US and billed in USD you would save $10,000 x 12 x 0.80% = $960/yr. I am many multiples of this so my savings are very substantial and it costs me nothing extra to have a US credit card processor set up and a US-domiciled bank account.
Business has to be established in the US which also means paying US taxes. Might makes sense for you because of significant volumes, but for most Canadian businesses, they would likely be better of with a USD account in a Canadian domiciled bank.
Deal Guru
Aug 2, 2010
11046 posts
2269 upvotes
gamechanger wrote:
Dec 9th, 2017 3:16 pm
Business has to be established in the US which also means paying US taxes. Might makes sense for you because of significant volumes, but for most Canadian businesses, they would likely be better of with a USD account in a Canadian domiciled bank.
Wrong. You are obviously totally unfamiliar with doing business in the US. My company is a Canadian corporation and not established in any manner in the US. No corporation or entity has to be established in the US to do business in the US. Aside from my US bank account at BMO Harris and Elavon, my US credit card processor, the only presence my company has in the US is that of the inventory that the US logistics warehouse that I contract with holds and ships for me. I do file a US tax return for my corporation at the advice of my accountant, although he even agrees it is a bit ambiguous whether I am required to. Better safe than sorry. The tax treaty then goes into effect and I pay no US taxes. If it was a requirement to be established in the US then I would obviously have mentioned it in my post. Countless Canadian businesses do business this way.

All you have to do is file a W-8BEN-E form (This certifies that your entity is non-US and taxes from deposits need not be withheld) for any entity that requests it (typically the US bank and credit card processor). Then you are off to the races saving tons of money on cross border fees.
Deal Addict
Jul 7, 2004
4576 posts
486 upvotes
I use Stripe, PP, Shopify on three different sites. I like PP the least, they are just fairly shady.
Shopify is probably the easiest but limited. Yes you have to buy everything as a package from them, but it's a nice real system. If you don't need website or anything else, it's probably not your best option. I used this for a site I didn't want to deal with all the other crap, just wanted something quick and easy and it did its job.
I've been pretty happy with stripe so far but mainly just do invoicing with it.
Newbie
Nov 22, 2016
64 posts
9 upvotes
You will usually get better prices with payment processors then with Sopify, PayPal etc. You should also know that certain MCC's are cheaper to process then others, and you should hope that your payment proceeer is careful with what MCC they use for you. Flat rate pricing is usually not the best option as the payment prcoseer will charge you a higher rate then most cards cost to process just in case you have many Visa Infine privelage, or commercial credit cards.
Newbie
Nov 22, 2016
64 posts
9 upvotes
eonibm wrote:
Dec 9th, 2017 11:41 am
If you have any significant US revenue then you might want to consider having a US credit card processor (which deposits funds into a US bank account you own) in addition to a Canadian one in order to save money by not having to pay the 'cross border fee' that all credit cards charge. The Cross-Border fee applies to any transaction when the country codes of the merchant and the cardholder differ.

The cross border fees charged for V/MC/Amex is 0.80% if US customer cardholder is charged in USD or 0.40% if US cardholder is charged in CAD.

I have 2 websites for one of my businesses, one for the US market in USD and one for the Canadian market in CAD as it makes total business or reasons other than the cross border fee. The savings in eliminating the cross border fee are substantial as 90% of my business is from the US. As an example, if you had just $10K/mos sales in the US and billed in USD you would save $10,000 x 12 x 0.80% = $960/yr. I am many multiples of this so my savings are very substantial and it costs me nothing extra to have a US credit card processor set up and a US-domiciled bank account.
The processing fees for US cards is much higher then in Canada. For example processing a US Visa business card by a Canadian merchant it 2% interchange + .45% cross border fees plus the regular Visa assessments. While processing at a US merchant would be anywhere between 2.05% up until 2.95% depending on which kind of information was entered along with the transaction. Plus assessments which are more expensive in the US. On the other hand processing a Canadian business card in the US is 2% + 1.25% cross border fees (when settled in USD) plus assessments. While in Canada it would be between 1.9% to 2% plus assessments.

This is cost, your processor might make all kinds of markup.
Deal Guru
Aug 2, 2010
11046 posts
2269 upvotes
FindDealstoronto wrote:
Dec 9th, 2017 9:12 pm
The processing fees for US cards is much higher then in Canada. For example processing a US Visa business card by a Canadian merchant it 2% interchange + .45% cross border fees plus the regular Visa assessments. While processing at a US merchant would be anywhere between 2.05% up until 2.95% depending on which kind of information was entered along with the transaction. Plus assessments which are more expensive in the US. On the other hand processing a Canadian business card in the US is 2% + 1.25% cross border fees (when settled in USD) plus assessments. While in Canada it would be between 1.9% to 2% plus assessments.

This is cost, your processor might make all kinds of markup.
Your analysis is totally wrong.

Your cross-border fee numbers are way off. As I have already posted, the cross border fee is 0.80% if you charge a US credit card in USD using a Canadian credit card processing company, not 0.45%. It is 0.40% if you charge a US credit card in CAD using a Canadian credit card processing company (but good luck presenting yourself as a Canadian company selling to Americans in CAD). Here is the actual reference on VISA Canada's website just to prove it.

From https://www.visa.ca/dam/VCOM/regional/n ... eb2017.pdf

As for the differences between interchange fees depending on whether you use a US or Canadian credit card processor, the latter would have to be 0.80% lower for your strategy to make any sense at all. I have paid an average fee of 2.50% total to my US credit card processor, ie all fees imposed by the credit card issuer and my credit card processor, calendar year-to-date on my US credit card transactions. For it to be worth it to use a Canadian credit card processor to bill my US-issued credit cards in USD the average fee, not including the cross-border fee, would have to be 2.50%-0.80% or 1.70%. That just ain't gonna happen as no Canadian credit card processor provides total fees that low.

You don't have to do much US volume at all to save money using my strategy.
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Newbie
Nov 22, 2016
64 posts
9 upvotes
eonibm wrote:
Dec 10th, 2017 11:30 am
Your analysis is totally wrong.

Your cross-border fee numbers are way off. As I have already posted, the cross border fee is 0.80% if you charge a US credit card in USD using a Canadian credit card processing company, not 0.45%. It is 0.40% if you charge a US credit card in CAD using a Canadian credit card processing company (but good luck presenting yourself as a Canadian company selling to Americans in CAD). Here is the actual reference on VISA Canada's website just to prove it.

From https://www.visa.ca/dam/VCOM/regional/n ... eb2017.pdf

As for the differences between interchange fees depending on whether you use a US or Canadian credit card processor, the latter would have to be 0.80% lower for your strategy to make any sense at all. I have paid an average fee of 2.50% total to my US credit card processor, ie all fees imposed by the credit card issuer and my credit card processor, calendar year-to-date on my US credit card transactions. For it to be worth it to use a Canadian credit card processor to bill my US-issued credit cards in USD the average fee, not including the cross-border fee, would have to be 2.50%-0.80% or 1.70%. That just ain't gonna happen as no Canadian credit card processor provides total fees that low.

You don't have to do much US volume at all to save money using my strategy.
First of all regarding the fees. It's .452% for a Canadian merchant to settle a USD card in CAD, and .904% to settle in USD. The fees have changed since February, and they will continue constantly to be changed.

2.5% could be expensive or cheap depending on your industry, the type of cards you accept, and type of information entered along with the transaction. If you accept mostly debit cards your are being ripped off, If you accept mostly foreign commercial cards then the payment processor is losing money on you. You can check the interchange guides to see what the costs are for different type of cards. Here is the VISA USA & Canadian interchange guides.

https://www.visa.ca/dam/VCOM/regional/n ... may-en.pdf
https://usa.visa.com/dam/VCOM/global/su ... t-fees.pdf

My point is that depending on which kind of cards being used. and the currency you want to settle the currency in, it might be more expensive to process US card in the US, then US cards in in Canada.

You should know that even though they allow you to process in the US. As long as you haven't Incorporated in the US you might be closed down. This happens every once in a while, when the IRS realizes this company isn't registered in the US.

You should note that most US cards don't have any foreign transaction fees anymore. It's Canada that still punishes cardholders for making non domestic purchases.
Jr. Member
Feb 18, 2014
158 posts
27 upvotes
eonibm wrote:
Dec 9th, 2017 3:25 pm
Wrong. You are obviously totally unfamiliar with doing business in the US. My company is a Canadian corporation and not established in any manner in the US. No corporation or entity has to be established in the US to do business in the US. Aside from my US bank account at BMO Harris and Elavon, my US credit card processor, the only presence my company has in the US is that of the inventory that the US logistics warehouse that I contract with holds and ships for me. I do file a US tax return for my corporation at the advice of my accountant, although he even agrees it is a bit ambiguous whether I am required to. Better safe than sorry. The tax treaty then goes into effect and I pay no US taxes. If it was a requirement to be established in the US then I would obviously have mentioned it in my post. Countless Canadian businesses do business this way.

All you have to do is file a W-8BEN-E form (This certifies that your entity is non-US and taxes from deposits need not be withheld) for any entity that requests it (typically the US bank and credit card processor). Then you are off to the races saving tons of money on cross border fees.
You’re arrogant attitude is tiresome. I will not respond further aside from telling you to go f*** yourself.
Jr. Member
Feb 18, 2014
158 posts
27 upvotes
FindDealstoronto wrote:
Dec 10th, 2017 12:43 pm
First of all regarding the fees. It's .452% for a Canadian merchant to settle a USD card in CAD, and .904% to settle in USD. The fees have changed since February, and they will continue constantly to be changed.

2.5% could be expensive or cheap depending on your industry, the type of cards you accept, and type of information entered along with the transaction. If you accept mostly debit cards your are being ripped off, If you accept mostly foreign commercial cards then the payment processor is losing money on you. You can check the interchange guides to see what the costs are for different type of cards. Here is the VISA USA & Canadian interchange guides.

https://www.visa.ca/dam/VCOM/regional/n ... may-en.pdf
https://usa.visa.com/dam/VCOM/global/su ... t-fees.pdf

My point is that depending on which kind of cards being used. and the currency you want to settle the currency in, it might be more expensive to process US card in the US, then US cards in in Canada.

You should know that even though they allow you to process in the US. As long as you haven't Incorporated in the US you might be closed down. This happens every once in a while, when the IRS realizes this company isn't registered in the US.

You should note that most US cards don't have any foreign transaction fees anymore. It's Canada that still punishes cardholders for making non domestic purchases.
Assessment fees in Canada are odd. Moneris, Chase and Global charge assessment and 0.08% for domestic Visa / MC. International cards settled in CAD at 0.40%, and international cards settled in their own currency (USD) at 0.80%. Elavon, First Data and TD, charge the same fee but add 13%. I’ve never gotten a straight answer as to why some charge tax, and others don’t.
Deal Guru
Aug 2, 2010
11046 posts
2269 upvotes
FindDealstoronto wrote:
Dec 10th, 2017 12:43 pm
First of all regarding the fees. It's .452% for a Canadian merchant to settle a USD card in CAD, and .904% to settle in USD. The fees have changed since February, and they will continue constantly to be changed.
Thank you. 0.904% vs the 0.80% I quoted for accepting US cards for a USD transaction processing by a Canadian credit card processor only reinforces my statements. I saw those numbers online but wasn't sure if there actually was a change.
FindDealstoronto wrote:
Dec 10th, 2017 12:43 pm

2.5% could be expensive or cheap depending on your industry, the type of cards you accept, and type of information entered along with the transaction. If you accept mostly debit cards your are being ripped off, If you accept mostly foreign commercial cards then the payment processor is losing money on you. You can check the interchange guides to see what the costs are for different type of cards. Here is the VISA USA & Canadian interchange guides.

https://www.visa.ca/dam/VCOM/regional/n ... may-en.pdf
https://usa.visa.com/dam/VCOM/global/su ... t-fees.pdf

My point is that depending on which kind of cards being used. and the currency you want to settle the currency in, it might be more expensive to process US card in the US, then US cards in in Canada.
I don't know of any website that states they only accept credit cards or only debit cards. Anyone selling online would be crazy to limit purchases to either credit cards only or debit cards only. As for the 2.5% being expensive or cheap, that is irrelevant as the customer is a constant. The only variable is the difference between the US and Canadian processor fee, which is the cross-border fee of 0.904% plus any better deal you get on interchange + the processors additional fee over the US credit card processor fee. I don't know of any Canadian credit processor that charges an overall fee including interchange, cross-border fee and their additional fee that is less than a US credit card processor's fee by 0.904%. If you do show me even one example.
FindDealstoronto wrote:
Dec 10th, 2017 12:43 pm
You should know that even though they allow you to process in the US. As long as you haven't Incorporated in the US you might be closed down. This happens every once in a while, when the IRS realizes this company isn't registered in the US.
Not true. You only need fill out the W8-BEN-E form for the bank and your credit card processor in order to do business in the US like I am, which is to have our products inventoried and shipped from a US warehouse. It is also advisable to also file a US tax return in order to take advantage of the tax treaty. Make sure you register and remit state sales tax as required for the state you operate in (and for any other states such as California which requires you to pay state sales tax if you ship more then $500K into that state during the calendar year). The IRS has no requirement that a Canadian company in my situation be registered in the US. Myself and many other associates I know who run their own companies have been doing this for decades with no problem at all and the IRS knows about all of us.

Aside from the fact your information is totally incorrect, as for 'closing down' the IRS could not do it even if they wanted to. What are they going to do? Go to my warehouse and every other one in the US and say "Stop inventoring this guy's products! Stop shipping them!" They have no control over that nor could they if they wanted to. All they care about is you filling a return (if you have to) and getting their taxes and the tax treaty with Canada already takes care of that.

Where in the world do get this erroneous information?
Deal Guru
Aug 2, 2010
11046 posts
2269 upvotes
gamechanger wrote:
Dec 10th, 2017 1:42 pm
You’re arrogant attitude is tiresome. I will not respond further aside from telling you to go f*** yourself.
Proving someone is wrong is being arrogant? Sorry that 'You can't handle the truth!' (line from a famous movie staring Jack Nicholson and Tom Cruise).

I guess you would rather RFDers be led astray. SAD!

(FYI, this may help you: Watch your language and attitude on here. It could get you banned.)

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