Profile picture of Allan Tan

Allan Tan

Aspiring Entrepreneur

Hi everyone,

My startup idea essentially revolves around creating a SaaS product for merchants which would help ease their operations. These merchants typically handle anywhere between 2,000-4,000 consumer payment transactions on a monthly basis. These consumer transactions can vary from say $10/txn - $50/txn upwards. One part of the product feature is to help these merchants move offline consumer payments to online.

I'm having a hard time determining the actual pricing model I should charge for my product due the transaction costs (for Payment Processors like Stripe, BrainTree) involved.

Initially, (this is most probably dumb) but I was thinking if we could simply help merchants on the registration process of a BrainTree account and from there onwards, the responsibility of consumer transactions management will remain in their purview (costs would go straight to BrainTree and profits go directly into their own linked Merchant Account). This way, I would not have to consider transaction costs in my pricing model as well and my customers simply pay based on the value they receive. However, it seems ludicrous to expect that part of the requisite to do business with us is to open up a BrainTree account?

Centralizing these consumer transactions on our end would not be feasible as these merchants require at least a weekly cashflow and again, these transaction costs would be even higher and more complicating.

Or should I tier my pricing such that transaction volume is the key metric towards subscription cost determination? In that case, wouldn't it be unfair if I charge anything more than what BrainTree charges me? On the other hand, if I don't do that, I can't reasonably account for transactions that cost way too much than what I factored in (since part of BrainTree's payment structure is a %-based fee + flat fee)

Do you guys have any advice on this?

I'm probably missing something crucial or my business model is deeply flawed from the get-go.

Appreciate any advice.