Responding to merchant complaints that their payment network would not allow them to switch to a less-expensive processor, gateway provider FeeFighters announced Sept. 21 plans to launch an online-payment service that simplifies the ability to make such changes.
FeeFighters, whose website businesses can use to compare credit card processing rates, will provide online-payment services with its Samurai gateway, which enables merchants to switch processors to secure the least-expensive rates, Stella Fayman, FeeFighters marketer and co-founder, tells PaymentsSource.
“We were always hearing from our customers that they had looked into other processors and felt they could get cheaper rates, but they couldn’t switch with their current gateway,” she says.
Samurai provides Chicago-based FeeFighters a competitive edge because it uses technology that allows a merchant to connect to various processors without establishing new gateway codes, a highly technical task too complicated for most merchants, Fayman says.
Use of the Samurai gateway will cost online merchants $10 per month and 10 cents per transaction, Fayman says.
But if the customer wants to establish a merchant account and use the gateway, it will cost $25 per month and 2.3% of each sale plus 30 cents, Fayman explains.
Founded in 2009, FeeFighters raised $1.6 million in new funding from various investors in January, according to Techcrunch.com.
With the Samurai gateway as its lure for online merchants, FeeFighters moves into competition against Braintree Inc., another Chicago-based online payments provider that reported processing $8 million in online credit card payments daily at the end of June, a 256% increase compared with the $2.25 million reported a year earlier.
Braintree released its second quarter growth figures three months after securing $34 million in venture capital from privately owned Accel Partners of Palo Alto, Calif.
Brian Riley, senior analyst and research director for Needham, Mass.-based TowerGroup, views companies such as Braintree and FeeFighters as “guerilla fighters” trying to chip away at the major hold PayPal Inc. and Amazon.com Inc. have on the online processing market.
“The key moving forward for all of these companies is being PCI compliant and having excellent security and showing an ability to deliver the various new payment forms,” Riley tells PaymentsSource.
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