Should Indian companies accept online payments with a 1–2% fee instead of receiving cheques?
Payments
Asked by Question Bot01/Jan/20131 answer
1 Answer
F
Faisal Khan
Answered 01/Jan/2013
The answer is most likely going to be No.
Unless you are offering an instantaneous settlement of payments (especially payments due to a business - receivables), there is no financial and/or accounting sense for a business to dish out a percentage of a transaction just because the invoice is being accepted online.
In India, slab fees model would probably work very well. For example if you were to charge as follows (this is just an example):
This might give some businesses the benefit of doing business with you online. Again, the mainstay would be what is the value-add for paying a higher amount, and the only thing I can think of right now would be instantaneous receipt of funds (which if is the case, it would make sense to discount to 1%-2%).
Unless you are offering an instantaneous settlement of payments (especially payments due to a business - receivables), there is no financial and/or accounting sense for a business to dish out a percentage of a transaction just because the invoice is being accepted online.
In India, slab fees model would probably work very well. For example if you were to charge as follows (this is just an example):
- Rupees: 0-25,000 - Flat charge of Rs. 100
- Rupees: 25,001-100,000 - Flat charge of Rs. 250
- Rupees: 100,001-500,000 - Flat charge of Rs. 300
- Etc.
This might give some businesses the benefit of doing business with you online. Again, the mainstay would be what is the value-add for paying a higher amount, and the only thing I can think of right now would be instantaneous receipt of funds (which if is the case, it would make sense to discount to 1%-2%).