Which is the right payment system for your business and your clients


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Choosing the right payment system can determine your online success, but with so many options how do you decide?
This workshop will show you the different ways to accept payments and how to choose the right one for your business & customers.
You will learn:
• How to compare & contrast between the different options
• The payment services that are available, e.g. PayPal, Worldpay
• What’s involved in setting up a custom-built payments system
• How to make the payments process easy for customers
• The best model for your business

Published in: Business, Economy & Finance
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Which is the right payment system for your business and your clients

  1. 1. Choosing the right payment system for your business and your clients Richard Hudson of
  2. 2. Interesting Statistics <ul><li>Number of UK Internet Users (Aged 15+) – 38.48 million </li></ul><ul><li>Internet users who have bought online – 65% </li></ul><ul><li>Internet users using the Internet daily – 54% </li></ul><ul><li>Amount Spent Online in Last 6 Months per User - £573 </li></ul><ul><li>Total Online Spending (UK) - £46.6 billion </li></ul><ul><li>Users who believe using a credit card online is ‘safe’ – 65% </li></ul><ul><li>People using the internet for business purposes – 10.96 million </li></ul><ul><li>Total Online Advertising Spend (2008) - £3.34 billion (up 7% in 09’) </li></ul><ul><li>Top types of sites visited (visits per month): </li></ul><ul><li>1) A site where you can buy a product or service – 19.19m </li></ul><ul><li>2) Map/Direction sites – 17.35m </li></ul><ul><li>3) Local Info services – 15.23m </li></ul>Source: Actinic/BMRB Internet Monitor/IAB
  3. 3. Interesting Statistics <ul><li>3.8 million Internet shoppers spent £102 million online on Christmas Day </li></ul><ul><li>A third of shoppers (37%) did more than half of their shopping online, with nearly two-thirds (59.9%) spending more online this Christmas than last year. </li></ul><ul><li>Britons are turning to the Web for convenience and value as increased tax, utility and food bills sap spending. </li></ul><ul><li>City centre retailers may lose 15 percent of their market share to online competitors over the next five years. </li></ul><ul><li>Latest research has found that 49% of UK fashion companies put e-commerce systems as their top investment priority over the next three years. </li></ul>Source: Bloomberg
  4. 4. Interesting Statistics <ul><li>Annual online turnover changes by sector (2007 to 2008): </li></ul><ul><ul><li>Beers, Wines and Spirits -16% </li></ul></ul><ul><ul><li>Gifts -1% </li></ul></ul><ul><ul><li>Electrical sector +7% </li></ul></ul><ul><ul><li>Clothing +32% </li></ul></ul><ul><ul><li>Lingerie -11% </li></ul></ul><ul><ul><li>Health and Beauty -4% </li></ul></ul><ul><li>Clothing, footwear and accessories is the fastest growing sector – it has consistently outperformed the total market and other sectors throughout 2008. Although the total market for online spending has experienced slowing growth, the clothing, footwear and accessories sector has seen around 30% year on year increases every month for 2008. </li></ul>Source: Bloomberg
  5. 5. Before you start - Market Research <ul><li>Research your Competitors (Web, eBay, Amazon, Offline) </li></ul><ul><li>Selling Prices </li></ul><ul><li>Postage Charges </li></ul><ul><li>Availability </li></ul><ul><li>Reputation </li></ul><ul><li>Distribution (Local/National/Global) </li></ul><ul><li>Evaluate your potential market </li></ul><ul><li>Understand your customer and their needs </li></ul>
  6. 6. Before you start - Your Products <ul><li>Establish unique selling point </li></ul><ul><li>Supply and Stock Availability (Lead Times) </li></ul><ul><li>Manufacture for Stock, Make to Order or Drop Ship </li></ul><ul><li>Selling Prices (factor in overheads and other costs) </li></ul><ul><li>Financial Implications </li></ul>
  7. 7. Before you start - Taking Payments Online <ul><li>Online Credit Card Payments </li></ul><ul><li>Payment Bureaux (e.g. PayPal, Google Checkout) From 3.4% plus 20 pence per transaction – no setup fee </li></ul><ul><li>Acquiring Payment Service Providers (e.g. Worldpay, Barclays ePDQ, HSBC) Shop Around - Aim to pay £150 setup with 2% for credit cards and 34 pence for debit cards - £20 per month minimum commission </li></ul><ul><li>Payment Service Processors (e.g. Sage Pay, SecureTrading) – Require a Merchant Account Sage Pay is £20 per month for up to 1,000 transactions per quarter. Merchant account charges slightly cheaper than above. </li></ul>
  8. 8. Before you start - Taking Payments Online <ul><li>Online Credit Card Payments </li></ul><ul><li>Payment Bureaux (e.g. PayPal, Worldpay, Nochex) </li></ul><ul><li>Acquiring Payment Service Providers (e.g. Barclays ePDQ, HSBC) </li></ul><ul><li>Payment Service Processors (e.g. Protx, SecureTrading) </li></ul><ul><li>Offline Credit Card Processing (via PDQ machine) – NO!! </li></ul><ul><li>Offline Credit Card Processing by SMS (e.g. Adelante) </li></ul><ul><li>Offline Payment (e.g. Cheque, Postal Order, On Account) </li></ul><ul><li>Cash (using Go&Pay/Payzone outlets) </li></ul><ul><li>Financial Implications of Selected Option </li></ul><ul><li>Consider Chargebacks, Transaction Fees, Security and Protection from Fraud </li></ul><ul><li>Important to Offer Different Payment Options to Customers </li></ul>
  9. 9. Shipping Charges <ul><li>Consider suitable shipping policy and charges </li></ul><ul><li>Offer choice to your customer – big hot topic at present </li></ul><ul><li>Research various despatch methods (Royal Mail, Courier) </li></ul><ul><li>UK, European, Global Shipping Charges </li></ul><ul><li>Consider insurance and order tracking </li></ul><ul><li>Don’t forget packaging materials </li></ul><ul><li>Quantity, weight or value shipping model </li></ul><ul><li>May influence choice of e-commerce solution </li></ul>
  10. 10. Trading Online Legally <ul><li>Data Protection Act </li></ul><ul><li>Privacy and Electronic Communication Act (Spam laws etc) </li></ul><ul><li>Copyright </li></ul><ul><li>Trademarks </li></ul><ul><li>Disability Discrimination Act </li></ul><ul><li>Terms and Conditions/Privacy Policy </li></ul><ul><li>Insurance </li></ul>
  11. 11. Selection of e-commerce solution – Deciding Factors <ul><li>Order volumes </li></ul><ul><li>Frequency of changes to products </li></ul><ul><li>Number of products </li></ul><ul><li>Stock availability </li></ul><ul><li>Preferred payment/shipping options </li></ul><ul><li>Budget </li></ul>
  12. 12. Types of e-commerce solution – Off the shelf <ul><li>Three main types </li></ul><ul><li>Packages included with hosting. For example: </li></ul><ul><li>1 and 1 </li></ul><ul><li>123-reg </li></ul><ul><li>Fasthosts </li></ul><ul><li>Online shopping mall facilities. For example: </li></ul><ul><li>eBay </li></ul><ul><li>Amazon </li></ul><ul><li>Etsy </li></ul><ul><li>Off the shelf software packages. For example: </li></ul><ul><li>Actinic </li></ul><ul><li>osCommerce </li></ul><ul><li>EKMPowershop </li></ul><ul><li>All require setup and customisation which takes time and knowledge to create something unique. </li></ul>
  13. 13. Types of e-commerce solution – Static (Developed for you) <ul><li>Static buttons containing product information and prices </li></ul><ul><li>Limited options (e.g. colour/size) </li></ul><ul><li>Products do not frequently change or go out of stock </li></ul><ul><li>Fixed shipping charges </li></ul><ul><li>Order information delivered by email (not stored) </li></ul><ul><li>Web developer responsible for changing product details </li></ul><ul><li>PayPal Shopping Cart is leading solution </li></ul><ul><li>Google Checkout latest to enter the market </li></ul><ul><li>eBay or Amazon are other alternatives </li></ul><ul><li>Not considered full e-commerce </li></ul>
  14. 14. Types of e-commerce solution – Dynamic (Developed for you) <ul><li>Content controlled by database </li></ul><ul><li>Content management facilities </li></ul><ul><li>Stock management </li></ul><ul><li>Order information stored and easily accessible </li></ul><ul><li>Customer information available </li></ul><ul><li>Automated customer contact </li></ul><ul><li>Support for more complex shipping policies </li></ul><ul><li>Flexible configuration and product options </li></ul>
  15. 15. Types of e-commerce solution – Advanced Features <ul><li>Featured/Related Products </li></ul><ul><li>Special Offers </li></ul><ul><li>Advanced stock control (for product options/multiple locations) </li></ul><ul><li>Multiple selling price groups (retail, wholesale, distributors, agents) </li></ul><ul><li>Advanced product database management </li></ul><ul><li>Returns Management </li></ul><ul><li>Discount Coupons </li></ul><ul><li>Reviews </li></ul>
  16. 16. Other Issues to Consider <ul><li>Accessibility of Site </li></ul><ul><li>Photography </li></ul><ul><li>Website Content (possible use of a copywriter) </li></ul><ul><li>Hosting (very important!!!) </li></ul><ul><li>Payment Processing </li></ul><ul><li>Security </li></ul><ul><li>Domain Name Registration (try www.123-reg.co.uk) </li></ul><ul><li>Internet Connectivity (get broadband) </li></ul><ul><li>Legal Issues </li></ul><ul><li>Marketing, marketing and marketing </li></ul><ul><li>Insurance (e.g. Product/Public Liability/Contents) </li></ul><ul><li>Thorough Site Testing </li></ul>
  17. 17. Service <ul><li>Communication with Customer including Order Confirmation </li></ul><ul><li>Provide Order Status Updates </li></ul><ul><li>Respond to Enquiries </li></ul><ul><li>Fulfil Promises </li></ul><ul><li>Documentation with Goods </li></ul><ul><li>Provide clear policies for delivery/returns </li></ul><ul><li>Good Service Builds Brand/Business Loyalty </li></ul>
  18. 18. Establish All Project Costs <ul><li>Stock Acquisition </li></ul><ul><li>Website Development (Get more than 1 quote!!!) </li></ul><ul><li>Legal Costs </li></ul><ul><li>Hosting Charges </li></ul><ul><li>Ongoing Charges including Transaction Costs </li></ul><ul><li>Cost of Marketing Campaign </li></ul><ul><li>Feasibility </li></ul>
  19. 19. Useful Links Manchester Digital - www.manchesterdigital.com Manchester Digital Development Agency - www.manchesterdda.com Taking Payments Online - www.electronic-payments.co.uk HM Customs & Excise - www.hmrc.gov.uk Information Commissioner (Data Protection Act/Privacy Laws) – www.ico.gov.uk Patent Office (Trademarks) – www.patent.gov.uk Trading Standards (Consumer Rights) – www.tradingstandards.gov.uk Office of Fair Trading (Distance Selling Regulations) – www.oft.gov.uk Royal Mail – www.royalmail.com Vanilla Storm – www.vanillastorm.com E-Commerce Guide - www.ecommerce-guide.com Internet Business Manifesto - www.strategicprofits.com/manifesto/ Contract Store – www.contractstore.com
  20. 20. Thank You ANY QUESTIONS? If you need help with your business call: Richard Hudson Vanilla Storm Limited T 0161 282 4525 E rh@vanillastorm.co.uk W www.vanillastorm.com