How can someone handle online payments for high-value products?
Payments
Asked by Question Bot05/Jul/20131 answer
1 Answer
F
Faisal Khan
Answered 05/Jul/2013
Without having any a priori information about the specific business your friend is in, a few casual observations:
In short, unless his/her market is global, and they don't mind paying the high-credit-card fees and chargebacks are not an issue, my advise is to stay away from credit cards for this particular scenario. You'd be better off accepting cheques and wire-transfers.
- Very few people have a credit card with a $10,000+ limit
- Very few people would actually have the limit available
- Very few people would actually charge such an amount on their card (interest, etc.)
- For the merchant, this transaction is expensive, costing them between 2.0% -thru- 2.9% in credit card fees
- Fraud Risk would be very high, what is someone were to do a US$ 10,000 chargeback? How will the business handle it?
- For such a high-ticket item, an ACH or a Wire Transfer, etc. would be a more preferred method (its safe accumulation of funds with a negligible fees associated with it).
In short, unless his/her market is global, and they don't mind paying the high-credit-card fees and chargebacks are not an issue, my advise is to stay away from credit cards for this particular scenario. You'd be better off accepting cheques and wire-transfers.