We've had a merchant account for several years, the last few on an interchange-plus plan. Last weekend, we sat down and calculated the average interchange-only discount rate, i.e., before the "plus" of the merchant account provider, for the last four months. We found the average interchange rate, including the interchange transaction fees, was about 2.05%.
Given that PayPal only charges 2.2% + $0.30 per transaction for businesses with > $10K in sales, it seems to me that it is increasingly difficult for any merchant services provider to compete with PayPal in the online space, given the high basic interchange rate.
The added benefits of not having to deal with the cost and complexity of PCI compliance and a separate credit card gateway has made us decide to switch to PayPal.
Given that PayPal only charges 2.2% + $0.30 per transaction for businesses with > $10K in sales, it seems to me that it is increasingly difficult for any merchant services provider to compete with PayPal in the online space, given the high basic interchange rate.
The added benefits of not having to deal with the cost and complexity of PCI compliance and a separate credit card gateway has made us decide to switch to PayPal.