Payments company eWay has released a merchant service that lets Australian businesses accept online payments from credit cards in the same manner as PayPal, Stripe and other global providers. Users signing up to the service, called eWay, no longer had to apply separately to a bank for a merchant gateway with its own set of fees.
The eWay service’s chief advantage is that businesses received money in their bank accounts the same day as the payment. Emerging competitors Stripe and Braintree held funds for two to seven days before passing them on to merchants.
Australian businesses could use eWay to start taking payments quickly without having to complete weeks of paperwork for a bank-registered merchant account, with its own fee structure, eWay CEO Matt Bullock said. “Typically you’ll get the bank’s fees separately. We’ve combined that and we tell people straight up that you can get an account for 2.9 percent” of the transaction cost, Bullock said.
Businesses could lower the percentage fee to 2.5 percent through plans depending on volume of transactions and monthly fees.
Users of the cloud accounting program Xero could add eWay to their online invoices so customers could pay online using their credit cards. A recent addition from eWay meant a Xero businesses could add the transaction fees to their customers’ invoices.
Payments processors typically held onto money for several days to protect themselves against fraudulent transactions. eWay has partnered with NAB under a tri-party agreement so that the bank accepted the risk of illegal activity.
“That makes a big difference to how things work. As a bank NAB can do single day settlement. Competitors are doing seven days settlement because they are taking the risk themselves,” Bullock said.
Rivals also throttled payments by paying out money up to a certain daily limit as another measure to control risk, he said.
“We can do $1 million sales in the first hour and you would get it the same day,” Bullock said.
Another advantage was that businesses no longer had to go through protracted set-up routines with banks. The time required to sign up for an online payment service using eWay’s “frictionless” sign-up process had fallen from an average of 89 days to four days, Bullock said.
Although the risk model was different, eWay was directly comparable to PayPal, Stripe and others, Bullock said. “You’re getting a merchant account, (the difference is) just how it’s branded. It all looks like magic science but at the end of the day it’s still a merchant facility.”
Stripe and Braintree use NAB to process payments in Australia, Bullock said.
eWay had signed up over 1600 customers to its merchant service in the past six months since launch. Over 80 percent of customers were choosing to buy the eWay service rather than apply for a merchant account separately, Bullock said.
“We’re offering everything you can get from a gateway, plus same day settlement. And you don’t have to talk to a bank,” Bullock said.