I know 12% sounds steep, hopefully the below explains how I only just break even. If it was highly profitable I could offer the race for free and just take the 12%… but it’s not.
The concept for taking card payments and sending a BACS was requested by those using the race who had no way of accepting payments online. Having been asked for this over and over from different race administrators I felt I had to take action and add the service.
Before we go into the ins and outs of why there’s a 12% charge you do have the option to upload unlimited balloons by CSV for no cost. If you can sell balloons from your own platform or take cash payments you can save the 12% (you’ll probably save 4% as you’ll still have costs – or 0% if you include your time). You can download images for your marketing or online shop here.
Although the below is a long explanation as to how it works it’s very simple to setup from your side – you just select “show” for the buy button and everything is automated.
The 12% card charge seems excessive compared to average merchant fees. The problem is small transactions of £3 to £5. Stripe charge a minimum of 20p per transaction + 1.4% and the 20p is a big chunk of a £3 sale. The next thing to consider is that I’m sending payouts to 100’s of different bank accounts – it’s not like the payouts can be automated, I have to do it manually.
To be transparent – on a £3 sale the stripe costs are 24p. Stripe is the online card service I use to take payments. I charge 36p, pay 6p VAT and so make 6p to cover the admin of sending BACS payments etc. If multiple balloons are purchased in 1 transaction I pay a smaller percentage per balloon which makes the service viable. If you choose to charge less than £3 per balloon I make a loss on every balloon you sell (I call this a marketing cost as every balloon you sell promotes the concept).
There are cheaper payment gateways on the market compared to Stripe. I believe you get what you pay for, Stripe has an excellent API and is the preferred payment provider for online payments. Their website is super simple and easy to find transactions & send refunds if required.
Bank Accounts and BACS payments.
There are other costs involved in protecting your funds and making sure they are paid to the correct bank account.
All sales (from all races) are paid from stripe into a Barclay Business Account specifically created for virtual balloon sales. Like a client account that holds your funds until you request a payout. Barclays charge £8.50 per month for the pleasure of hosting this account (that’s a lot of 6p’s).
When your sales have finished you’ll need to select “hide” for the buy button and click “Request Money Transfer” (in Red lettering):
Once you’ve sent the “request payment transfer” I aim to send a bacs payment the same day (if it’s a Sunday I’ll send on Monday) & you should receive the funds that day. I do this even though it takes stripe 3 working days to pay into the client account. So, funds taken on a Friday are paid into the client account the following Wednesday.
It takes about 5 minutes to send a bacs, not very long but if you have 15 to send it starts taking up a chunk of time. There are several hoops to jump though with the Barclays app before I finally get to the screen where I can send payment. The Barclays gateway checks the account name, sort code and account number and if the numbers & names do not match it will warn me not to send the payment. At this stage I’ll email you and ask you to double check your account details. An incorrect account name is the most common error. It’s not the end of the world but I have to start the bacs process again which all adds to time and costs.
If possible it’s better to send funds directly to the School, PTA or Charity account rather than a personal account.
Hopefully the above helps explain things from my side and to charge any less than 12% wouldn’t be viable. To charge different amounts and percentages for multiple payments would be too complicated. The simplest and clearest way is to charge a flat 12% across all sales so you know exactly what you’re paying.