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Guidance on $$ amounts that companies will pay by credit card for software

I am working with a company moving to SaaS and they are setting their price (which will be one year up front and not monthly). They are thinking of $25,000 but are not sure if their customers (which are large enterprises) will be willing to charge this much on a credit card. My client wants to have credit card payments for cash flow as well as self service ability for their clients. If $25,000 is too high, what level would be acceptable for a credit card payment.

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Joan,

To answer your question, it depends on the card (that the company uses) and of course the credit limits/or absence of one.

Second, from your post , I have a few (clarificatory/contextual) questions....
1. Are you limiting your type of payment to just credit cards?
2. Are you basing your pricing on what a credit card can handle or what a client is willing to pay via credit card?

Limiting forms/types of payment for clients and especially for a startup is a mistake. I understand the cash flow needs, I understand the ease of processing, I understand the cost of processing. However, as one grows and the ultimate goal is to acquire customers (large enterprises), why would I erect a type of roadblock (such as limiting payment to just credit cards) to acquiring a client?

Again, maybe it is just how I read your post but it seems that you are basing your pricing as somehow dependent on how much a credit card can accommodate or how much a client is willing to pay via credit card? To me, this is a wrong approach to pricing.

Just a view from how I read (or misread) your post.

Topic Expert
Joan Varrone
Title: CFO
Company: Cloud Cruiser
LinkedIn Profile
(CFO, Cloud Cruiser) |

Thanks for your input. No they are not limiting the payment to credit cards at all but want to understand what percent would likely use credit cards and therefore be able to on-board automatically.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I would rather encourage Wire/ACH for large amounts. The discount rate, even for $25k would still take a chunk of change for no apparent benefit to the start-up.

Most Saas products have a free trial period, so the client has time to pay via Wire/ACH.

John P. Hart
Title: Vice Pres - CFO
Company: Nova Pressroom Products, LLC
(Vice Pres - CFO, Nova Pressroom Products, LLC) |

Joan Varrone

Has your client run this by their processor?

Unless they have a strong track record with the credit card processor, they would have a hard time getting a new processor to accept those charges. CNP Non-swipe, large transactions, no product delivered - all warning signs.

Processors are very wary of large charges for service or products that are not delivered for extended periods of time. Most card companies allow customers to dispute charges up to 90-days, but after that the ability is limited.

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