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Adrien & Roger |
[ FunCow.Com ] [ Internet
Merchant Accounts ]
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inally, I can breath again - Free (Ad Supported)
Internet Access returns.
Getting more than what you pay for. I guess we were being spoiled.
Up until last December, we were using a free ISP powered by 1stUp.com
(co-branded by AltaVista, Excite, The Simpsons and some 90 other
organizations), to satisfy our kids email and my extended internet
browsing habits. Mid-December 1stUp.com went under, leaving the free
ISP market an empty void, and forcing us to start searching for
alternative connection methods. There was little to choose from. A few more
options existed in larger centers. Some of you switched to high speed cable
or ADSL, but those options are not available in my neighborhood. Others of
you switched back to the phone company ISP plan or bumped up your hours.
Spoil me again? Local access to Lethbridge and some 100 other cities
across Canada is now being provided by FunCow.Com. They have 3 connection
options: 1) Email only - not much of an option, 2) Ad Supported Access - a
great deal, but you have to put up with losing about an inch of real estate
from the top (or bottom) of your desktop to the bright yellow advertising
bar, and 3) Unlimited Access for only $49.99/year - less than half the cost
of the least expensive Telus plan ( a meager 10 hrs/month for 9.95 x
12/year). Wahhoo!
We are even using this service on the kids PC - a 486 PC with only 20M,
Win95B, and a 33.6 modem. A bit less than the suggested minimum system
requirements .. but hey, it works. Of course, it is much quicker on the
Pentium III Office PC with 128M, Win98SE and a 56K modem. Still, it serves
it's purpose - they can read their email without using up all my connection
time.. |
Try it, I think you'll like it! You may even opt for the 'ad-free' option -
it looks like a great deal to me. I plan to keep my Telus account active for
now and use the free ISP to supplement my hours.
- On the downside: we did encounter a few anomalies. It's works but
.. still they seem to be ironing out the bugs (version 3.0.20) ..
- On our test machines, the startup dialing program locks up on the
first attempt .. so I do a CTRL+ALT+DEL, close it down (end task), and
then it usually works on the second attempt.
- Also, a further inconvenience for those of you who use the Telus Call
Answer service .. the dialing program can't dial out until after you
listen to your waiting messages.
- .. we didn't expect sterling tech support - it is a 'free' service,
after all .. but we did eventually get a response to our emails ..
version 3.0.30 fixes these concerns .. click
here to view their response ..
- Funcow software suggested system requirements are as follows:
- Windows 95B or 95C / Windows 98 / NT 4.0 (Service Pack 3) / Windows Me
- Intel Pentium (minimum) CPU based PC
- 32MB (minimum) RAM
- 40MB free hard drive space
- 256 colours at 640x480 graphics resolution (minimum)
- 14.4k, 28.8k, 33.6k, or 56k modem with the software drivers installed
- Microsoft Internet Explorer v4.0 or newer
- The Funcow website is optimized for Microsoft Internet Explorer 5.0
(IE5.0) and that both IE5.0 and Netscape Navigator 4.5 are available on
the Funcow Installation CD for those who do not have a browser already
installed on their computer.
[ www.funcow.com/site/signup/
] [ www.funcow.com ]
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nternet Merchant Accounts - Investigation
A large way to get a quick headache. Many clients have inquired on
ways to be able to accept Visa, MasterCard, or other credit cards over the
internet on their website. The quick answer is that it is a rather cumbersome
and expensive process and probably not cost effective for most smaller SOHO
sites. The longer answer is addressed to some degree below.
- Even if you already accept credit cards in your normal business with a
regular Merchant Account, you will likely need a separate Internet Merchant
Account to be able to accept and process charges directly over the
internet.
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- The discount rate (i.e. the slice of your pie given away for the
privilege of accepting that credit card is higher for internet based
business vs traditional retail business). There are hold back deposit
requirements, monthly fixed costs, fixed and variable (.3%-7%)
transaction fees, and hefty charge back fees. You have to shop around for
different deals, but they all run about the same overall, as the rules of
engagement are set up for everyone by the credit card companies.
- Most offerings are still geared to US based companies. If you are trying
to sell in other currencies, your options are much more limited.
- Many offerings suggest charging an fee of up to $500 US just to apply ..
sometimes refundable if not approved. In my mind, not a wise option.
- If a web site and/or web store shopping cart is required, this fee is
often on top of the fees mentioned above, although for some integrators the
shopping cart is included in the ongoing fees.
- Some products are just not accepted for consideration,: MLM, porn sites,
etc. Don't even go there.
- You have to go to the trouble of jumping through the administrative
hoops, providing all sorts of documentation to get through the
approval process ..
- You only get your money deposited into your account twice a month.
So, let's assume you have a SOHO Canadian based website with a online
catalog selling in Canadian dollars. How much will it cost to setup an
Internet Merchant Account? We contacted Planet Payment for the following
info:
- For businesses incorporated in Canada and settling in Canadian or United
States Dollars and selling approved products, Planet Payment offers
following preferential rates:
- Set-Up Fees:
- Non-Refundable Application Fee: CAN$150.00
- Balance Due Upon Approval: CAN$245.00
- Monthly Fees:
- Transaction Fees:
- Discount Rate: 3.49%
- Per Transaction Fee: CAN$ 0.45*
- *Actual per transaction fees and monthly fees will vary with currency
fluctuations. The amount billed will be the equivalent of US$0.30
per transaction and US$25.00 per month.
- Quoted rates are minimum preferential rates and are subject to change
without notice.
- Or you may choose Planet Payment's no transaction fee rate for companies
settling in Canadian Dollars. This rate is ideal for companies with a
small average transaction amount. With this rate the same set-up and
monthly fees apply, however there is no per transaction fee and the
discount rate is 4.25%
Continue the assumption: say that your average sale is $25 of which $5 is
profit. Given these numbers, you have to increase sales in first year by over
230 transactions in order to breakeven ( an extra 230 sales @$25 each is
$5750 in revenue and an estimated $1150 in profit, covering total charges
for year of $1145 (setup 395, monthly charges 444, discount rate 3.49 charges
201, transaction fees .45 x 230=104).
Humm, maybe those numbers are wrong for your company .. let's try some
other numbers ..
| Ave Sale ($) |
Ave Profit/Sale ($) |
Breakeven
(addl #) |
Addl Reqd
Revenue ($) |
Tot Year-1
Charges ($) |
| 25 |
5 |
230 |
5750 |
1145 |
| 50 |
10 |
108 |
5400 |
1080 |
| 100 |
15 |
76 |
7600 |
1140 |
| 500 |
50 |
26 |
13000 |
1305 |
| 1000 |
100 |
13 |
13000 |
1300 |
.. so, bottom line, depending on your business situation and expectations,
your website has to find a way to add to revenues by amounts listed above
just to cover the Year-1 additional charges. Much higher sales revenues are
required to actually make any money on the deal. Of course, in year-2 you
don't have to pay the 395 setup again .. and your actual situation will vary
from any of the average examples above, but you will likely have to pay me
for other web development/maintenance costs to get/keep the thing going, but
you get the idea. So, you've gotta ask yourself, do you feel lucky, eh?
- On the plus side, once you have your Internet Merchant Account set up:
- you are potentially selling to a much larger customer base than
possible in a traditional brick and mortar store,
- you create/maintain your corporate image and perception of being a
on-going concern, and
- your range of opportunities grow, you can expand your company into
other product lines and markets without having to reinvest (much) in the
startup charges.
[ www.planetpayment.com
] [ www.authorizenet.com
] [ ratecard.htm ]
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