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Comment by chirau | Hacker News Reader

I have noticed that there isn't a lot of chatter on HN about Square. But on closer inspection it is a fascinating success story. They are building and cornering a whole ecosystem there. And their valuation is remarkable. Not just hype, but execution. Kudos to them.

Between them and Stripe, it's nice to have something in payments to admire and be excited about.

I remember a time when we had to deal directly with Authorize.net, wow that was a mess!

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My merchant account is cheap (interchange plus 0.1% or so) and the gateway they set me up on is Authorize.net. Still using it after 17 years or so, although indirectly via Spreedly.

If you go to a craft show or popup market or anything like that, every vendor has a Square reader to take cards. They're super successful with "offline solopreneurs" -- the independent one-person small businesses.

One of my many side gigs is selling laser-cut wood stuff of all sorts, and I make a set of Square Reader docks that sell really well. I just made several this weekend.

https://www.etsy.com/shop/ligninandlight?section_id=26787311

How much are the delivery fees for this sort of products?

> My merchant account is cheap (interchange plus 0.1% or so) and the gateway they set me up on is Authorize.net

It's crazy most people don't know you can get this. Seems like every popular merchant account provider is a bad deal in comparison.

For those curious, you get it from banks. Open a company account at a major conventional bank then ask them for a merchant account. The default they offer you is interchange + 0.2% or so. Many debit cards have an interchange rate of about 1%. When you pay 30 cents + 3% or 2.9% or whatever you're sortof being screwed.

What’s the high end of the range?

The high end will be around 3.5% for amex.

I have never been able to get interchange plus just 0.1 or 0.2%.

Is anyone getting this for SaaS? It seems many processors consider digital goods or services like software to be more risky.

We get interchange +0.1% but we are in travel and because of the various card types used (gold, platinum, etc) sometimes it’s just a tiny bit cheaper than 2.9%. For example 2.7%. It all depends on card types people use.

As one of the people who doesn't know about this, what does the merchant account do? For an online retailer, does the merchant account replace Stripe/PayPal?

You need a merchant account to accept card payments.

> For an online retailer, does the merchant account replace Stripe/PayPal?

It's the other way around. Each retailer needs a merchant account to accept card payments. Without Stripe etc, you'd need to go through the (often tedious) route of getting a merchant account (paperwork, proof of business health, etc) and negotiating rates before you can start integration (using traditionally quite horrible APIs) using it. Stripe is just the middleman which provides their own merchant account with a nice API to accept payments through it.

The question is interesting, not because you don't know, but because it reflects how much things and perception changed so that we think:

> does the merchant account replace Stripe/PayPal?

It shows how successful Stripe has been.

Are there any resources you looked at for this stuff?

This is like some kind of hidden gem I just found out about.

Is this ~1.2% total rate only for processing debit cards or credit cards as well?

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