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Alternative to PayPal payment processing

Replies: 34 - Pages: 2 [ 1 2 ] - Last Reply: May 2, 2019 9:39 AM by: Paul W
Sam Westcott
Registered: 12/19/09
Alternative to PayPal payment processing

What's the $15 fee for? The gateway should now be free since we now support Lynnbrook's in house gateway. Also what % rate were you quoted?

BlueMtnCabins
Registered: 6/6/16
Re: Alternative to PayPal payment processing

I used their contact form and I mentioned that I was interested in using Lynnbrook with ownerrez. The response email I received:
Thank you for reaching out to our company regarding credit card processing through OwnerRez.

The cost to use our system through OwnerRez would be:

** $15/month
** 2.59%
** 10 cents per transaction

If you would like more information on the integration or our services please feel free to give me a call.

Sam Westcott
Registered: 12/19/09
Re: Alternative to PayPal payment processing

I believe that's using Authorize.Net as a gateway. We are still cleaning up our integration with them. We're actually going to be surfacing a sign-up form on our site (OwnerRez side) that you can use without going to them directly (unless you want to). We'll reach out and see what the deal with that is, but I'm 100% sure that was them giving you Authorize.Net gateway since our support of their in-house gateway hasn't been announced. If you respond back to them, mention that you want to use the in-house gateway which OwnerRez has said is free and see what they say.

BlueMtnCabins
Registered: 6/6/16
Re: Alternative to PayPal payment processing

Update. Spoke to the rep. $15 is not a gateway change, he calls it "credit card" charge. so them advertising 2.59% + 10c is not really a 2.59% once you figure in $15 monthly charge. perhaps would make sense to switch for those who have higher amounts than me. In my case at this point not worth switching over $49 or so dollars a year.

so whomever is interested:
$2.59 + 10c per transaction
Plus $15 monthly.

Ella
Registered: 5/19/14
Re: Alternative to PayPal payment processing

Subscribing to be notified when in-house gateway will be free with Lynbrook.

Paul W
Registered: 6/9/09
Re: Alternative to PayPal payment processing

Hi folks,

I wanted to drop an update here since we have a bunch of people who have been silently subscribing to this thread by email.

I talked to Lynnbrook and went over pricing. Here's where everything is at...

We were wrong to universally declare that the in-house gateway would make it so that the account is always free if you don't use it. That was (and still is) Lynnbrook's goal, but there's not enough data in place to be able to universally offer that to everyone, large or small, at this point. We talked at length about this.

That being said, Lynnbrook's price IS WITHOUT ANY QUESTION CHEAPER then what the major aggregators (like PayPal, Stripe, Braintree) offer over all. We already know that, having sent a number of users their way. No one has come away with more expensive rates.

In talking with Sharon (the CEO of Lynnbrook) we discussed the ways in which they vet each user's situation and work to get the lowest fees possible relative to that user. It's not easy to do this as a universal "one size fits all price structure" when you focus on the vacation rental market alone.

Keep that in mind - Lynnbrook is dedicated to supporting vacation rentals. They understand the booking "product". Most generic credit card processors won't approve processing at all if the "product" is delivered 60 or 90 days away.

The ultimate question is how to offer the same pricing to everyone when each user can vary so much in use, geography and customer-base. Every merchant account carries with it certain costs - core banking costs and the cost of underwriting risk - and there is a lot of variability between users.

For instance, vacation rental owners in North Carolina tend to have all American customers who use American credit cards, while vacation rental owners in Florida have a lot of international customers who use cards that are more expensive to the processor. The North Carolina VR is cheaper to underwrite than the Florida VR.

If we have many small users sign up who end up not using their merchant account for part of the year, there has to be enough larger/active users to offset the core costs of the smaller users.

This is true with the major aggregators too (PayPal, Stripe, Braintree) which is why their processing rates are 3% and why they shut off dormant accounts quickly and treat everyone the same (whether you're selling vacation rentals or blenders).

Lynnbrook is working on some pricing buckets - which we're waiting on before we begin marketing efforts - to lay out what to expect, but again they will mostly likely BE CHEAPER than what you're using now, particularly if you're with a major aggregator. That, we can guarantee!

The base monthly fee will most likely change as well. For the moment, they've asked that smaller users (processing < 50k/year) pay $15/month. Most monthly minimums are $20-25 so that's better than the industry average.

SOME OTHER POINTS TO CONSIDER:

1) Good processing is not just about finding the absolute cheapest rate. Once you get a chargeback or dispute from a guest (and you will if your business goes long enough) you'll learn this lesson quickly. Cheap rate is near the top, of course, but you want a processor who fights for you as well.

2) Your processor should understand the vacation/short-term rental "product" and be happy to support it. Even though Stripe or Braintree tolerate vacation rentals now, they may not in the future and you may get dropped. We've already seen this happen with Braintree. Their underwriters frequently tell some users that short-term rentals aren't allowed but then other users are approved. Sometimes, they have special criteria like you have to be the owner of the property and can't be managing it for someone else.

3) Your processor should do gross deposit (fees taken out at end of month). None of the major aggregators do this. They send deposit with the fees already taken out. This is extremely frustrating when reconciling your bank account because none of your deposits match up to your booking records.

We will have more information coming soon; I'm just dropping this update here because I saw a lot of subscribers clicking to watch this thread so I know there's some concern. Also, I had a free second. :-)

Happy weekend to all,

-Paul

BlueMtnCabins
Registered: 6/6/16
Re: Alternative to PayPal payment processing

Thank you for the update Paul.

Chris L
Registered: 5/17/17
Re: Alternative to PayPal payment processing

Paul W said:

For instance, vacation rental owners in North Carolina tend to have all American customers who use American credit cards, while vacation rental owners in Florida have a lot of international customers who use cards that are more expensive to the processor. The North Carolina VR is cheaper to underwrite than the Florida VR.

If we have many small users sign up who end up not using their merchant account for part of the year, there has to be enough larger/active users to offset the core costs of the smaller users.


Seems to me this could be solved if Lynnbrook went with an interchange-plus pricing structure. More expensive card to process? We (the merchants) pay more. Their risk of having to absorb an expensive card is minimal (and we also save when someone uses a cheap-to-process card, like a debit card).

The only two "buckets" I wish Lynnbrook would offer were:

-Low-volume: $0/mo, 3% flat
-High-volume: $15/mo, interchange-plus

Right now, I'm low volume (because most of my bookings come through HomeAway et al.) and would gladly use them if they offered basically the same thing that Stripe and others offer (a relatively higher rate but no monthly fee), but knowing I was supporting a company who is intensely familiar with VR. I would then gladly transition to that kind of a high-volume plan once I build my portfolio out a bit more and/or my direct-mailing list of previous customers who want to book direct to the point where it makes sense to pay a monthly fee to take advantage of lower rates.

Unfortunately, for low-volume operations, Lynnbrook doesn't make sense at this point, and for high-volume ones, there are interchange-plus processors out there whose rates beat the socks off of them, so they kind of don't make much sense for either end of the spectrum.

My $0.02, anyway...I'm still trying to decide who to use and have talked with Lynnbrook and like what they have to say, but I'm trying to decide if it's worth spending $180 extra a year on them when other options work out cheaper for me at this time (due to my low direct processing volume).

Paul W
Registered: 6/9/09
Re: Alternative to PayPal payment processing

Hi Chris,

Thanks for weighing in!

I think Lynnbrook is definitely worth it for the low end depending on how much you value your time. The aggregators (Stripe, PayPal) you are comparing them to make your life difficult when it comes to:

- reconciliation (fees taken out with each disbursement)
- don't understand the VR product and may freeze funds or drop your account (this has happened to users)
- won't fight disputes/chargebacks for you because See Previous

Paying a small monthly fee is nothing compared to losing a $500 or $1k booking because the aggregator sided with the guest. You can recoup that by filing in small claims court but again - what is your time worth.

As an analogy, many users gladly pay $10-35 per booking for damage protection that they rarely use. Why? Because it's worth the extra couple hundred bucks a year when that moment strikes and the guest breaks a window and cancel their credit card.

Question - have you asked Lynnbrook about interchange plus pricing? I'm wondering if they already have that. They seemed pretty amenable to most of the stuff we've talked to them about. It's possible that they already do that, if specifically asked.

Chris L
Registered: 5/17/17
Re: Alternative to PayPal payment processing

I emailed the rep over there who had responded to my initial inquiry and he said that interchange-plus is definitely something they can (and do) offer their larger accounts. If I grow to the point that it would make a material difference in my costs, he indicated we can talk about it at that time.

He made it pretty clear, though, that there isn't much they can do about discounting the plan on lower volumes (either the monthly fee or the discount rate) because the VR industry is considered a "high-risk" industry in terms of underwriting. I understand and don't disagree--I'm just both seeking to make sure I get a good deal now (whether that is favorable pricing or a clear explanation of why paying a slightly higher price is worthwhile) as well as ensuring that if I do make this a long-term relationship, things can work out well downline.

JTVRs
Registered: 6/25/18
Re: Alternative to PayPal payment processing

I am getting close to needing a payment processor (except for the HA/VRBO annoying requirement for Yapstone)

- I think you HAVE to offer PayPal for those who use it all the time (like me) and don't want to enter their CC info.

........Anyone use and have opinion on using PayPal for VRs - good, bad?

- They recommend Lynnbrook. What is the current situation (Gateway fees, % charge) these days, using OR?

Paul W
Registered: 6/9/09
Re: Alternative to PayPal payment processing

Ross, check out OpenEdge too. We just started supporting them, and we've been impressed with their team. Fast customer service and a meet-or-beat guarantee on rates.

The downside of PayPal is that you don't have a card on file (in OwnerRez) so the guest has to be reminded to make payment or security deposit every time it's due. And so there's less that can be automated.

We also now integrate with Yapstone/VacationRentPayment too. That was just released about 10 days ago. However, your existing "HomeAway Payments" account will not work. Yapstone says that it's a different side of their business and only works with HomeAway. You'd have to get a Yapstone regular account.

Emma M
Registered: 5/2/19
Re: Alternative to PayPal payment processing

E-check is an electronic version of a paper check used to make payments online. Benefits of Echecks include quicker payment, secure payment method, lower cost and reduced chances of bounce checks. Paycron provides fast, reliable and secure electronic check payment processing. Contact us to save time and money with this service.

Paul W
Registered: 6/9/09
Re: Alternative to PayPal payment processing

Emma, thanks for reaching out about your product. However, OwnerRez does not currently integrate with Paycron so it would not be possible to use within OwnerRez as a payment processing alternative. If you are interested in integrating, please send an email to our ticket system with integration information and someone will take a look at it.

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