If this is indeed the case I’m not so trilled about Shopify anymore as I was.
Right now I know I won’t get approval from my customer when I tell him that they have to pay around 3.5% for credit card processing and an extra 3% “for a shopping cart” (the way he sees it). You bet he will ask me “Why don’t you simply use a payment gateway directly and save me the 3%?, even if it is more difficult that’s why I pay you.” And I will have to agree with him.
I think if Shopify wants to suceed they should charge at most 1% (if not 0.5%) of transactions. Sure the company will grow with the 3% fee, but as soon as anyone else offers a 1% on a similar service, everyone will switch (specially since this form of shopping cart processing is a relatively simple thing to change).
Relatively is a big word. ;)
For your customer: How do you simply use a gateway directly without buying or building your own shopping cart, which you’d have to host and secure yourself? Shopify is much, much more than a PayPal buy now button.
3% is paltry compared to the initial cost of setting up an ecommerce store traditionally, and paying for hosting, security, etc. There’s a place for that, of course, for most serious merchants. But with Shopify you can get set up quickly and (at this point) there’s no monthly fee and no percentage plus fee like your gateway will charge you.
From my own experience, if a custom solution, or an OOTB solution like BV Commerce, works better for the client, that’s what the client gets. If they want the basics without dealing with processing/security/hosting, Shopify is really the only thing out there right now.
I actually agree with most of what you say :) My problem is that in practical terms it’s just too much to ask for 3%.
You mention it is difficult to make a shopping cart yourself and secure it, but with something like a website hosted on a secured godaddy coldfusion server it’s dead easy to create your own shopping cart and connect it to a payment gateway (I’ve done it before).
However I do agree with you that for someone who does not have the experise nor care about the fees, that Shopify is enough. But long term I think Shopify should lower those fees as much as possible so that companies like in my case (large volume customers which can pay people like me to build them a full store directly connected to a payment processor and avoid Shopify charges as they are now) have a reason to try and maybe switch to Shopify. Remember, one such large volume customer can represent 10,000 times more earnings than a single small-time store hosted by you.
In any case, I think you have something good going on there and I’m sure there is a market for what you’re doing (and I’m not being sarchastic when I say this), so good luck.