shopper approved

    Why Is It More Expensive To Pay With Credit/Debit Cards & PayPal?

    Customers must pay higher prices for purchases made with Credit/Debit cards and PayPal due to the associated fees incurred by these methods of payments, particularly merchant fees. In order for an online dealer to accept certain forms of payment, they are required to pay the credit card companies or e-commerce businesses for the actual processing of the transaction. This is known as the merchant fee. Merchant fees typically consist of a base processing amount, as well as a small percentage of the actual purchase. Still, depending on the credit/debit card company or e-commerce business, there may be additional service charges including account monitoring fees, security fraud screenings fees and international sales fees when applicable. These service charges can amount to merchant fees as high as 4%.

    Unfortunately, these fees can prove to be a significant cost for a low margin industry such as precious metals. Thus, in order for us to cover these expenses, we are forced to pass these costs to the customer for those wishing to pay with these payment methods. Such expenses are reflected through higher prices on all payments made with credit/debit cards or through PayPal.

    How to Avoid These Costs as an Investor

    In comparison, customers who choose to pay for their purchases with paper checks and bank wires will have the opportunity to pay lower prices since there are no merchant fees associated with these methods of payment. The absence of merchant fees on paper checks and bank wires is due to the terms of service upheld by most banks.

    Banks rarely charge merchant fees to process checks or wire transfers simply because these services are part of their primary function. Moreover, in those rare instances they do decide to charge a merchant fee, the rate is never significant enough to pass to the customers. Consequently, we are able to offer a 4% discount on any purchases made with either paper checks or bank wires. Paper checks and bank wires provide an ideal payment alternative for customers who prefer to avoid the higher prices associated with credit/debit cards or PayPal. Please be advised, however, that the amount of your purchase must fall within the designated price criteria of these forms of payment.

    Advantages of Using PayPal and Credit Debit Cards

    Still, for many customers who choose to make payments via credit/debit card or PayPal, the advantages offered on these methods of payments more than justify the higher premium rates. The most obvious benefit is the faster processing time. Payments made with credit/debit cards as well as PayPal are typically cleared on the spot, resulting in immediate placement on the shipping queue. The faster an order is added to the queue, the faster it is sent out for transport and delivered to its recipient. In contrast, customers who opt to use paper checks and bank wires as their form of payment must wait longer for their orders, since both of these methods require a longer processing and clearance period.

    Another advantage that makes customers willing to pay the higher rate is the convenience associated with credit card and PayPal transactions. With both these methods of payment customers can complete their transaction in one simple step from the comfort of their own home. Regretfully, paper checks and bank wires often require the additional time and effort of visiting the post office or the bank.

    All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.