Taking payments online

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  • Taking payments online

    1. 1. Taking Payments Online George Palmer
    2. 2. Agenda• Why take payments online• Different types of payment systems• Selling online• Examples• Questions
    3. 3. Who am I?
    4. 4. Career• Programmer / Consultant • Worked for IBM writing financial transaction software • Consultant integrating many different payment systems• Owner of a Digital Delivery Solution • http://digitaldeliveryapp.com• General enthusiast of Internet based
    5. 5. Contact• http://rowtheboat.com• @Georgio_1999
    6. 6. Why take payments online?
    7. 7. Reasons to take payments online?• Digitalise manual processes • No need for ‘cashier’ personnel• One less thing to do for small companies• Automated• Access to a national/global marketplace• Your competitors probably are already!
    8. 8. Reasons not to take payments online?• Custom integration will be expensive• Fraud• Lack of opportunities to build rapport with clients• Rework of existing processes
    9. 9. Online transactions - current state• Merchants • e.g. large shops• Person-to-Person • e.g. eBay• Micro transactions • e.g. tip jars, $5 e-products
    10. 10. Payment Systems Merchant Banks End-to-end solutions Digital payment services
    11. 11. Merchant Banks• Ability to charge credit/debit cards• Funds deposited into an account after a clearing period• Charge a rate of 1-3.5% per transaction • Cheapest approach for high volume• Most banks offer merchant accounts
    12. 12. Merchant Banks• Can be fully integrated into checkout• Difficult to setup - especially for new businesses that only trade online• T&Cs for online traders are less favourable • e.g. liable for chargebacks in more situations, longer settlement periods, and less preferable rates • Banks don’t get online like they do offline
    13. 13. Merchant Banks• Requires integration to your site through a gateway • Performs instructions to charge customers card and settle funds into your merchant account • Gateways charge from 9p-20p per transaction• Most complex to integrate with your site of all the payment approaches => most expensive to setup
    14. 14. Merchant Banks• Depending on integration may require PCI compliance of some level • International security standard stating how sensitive customer data should be stored • Requires servers locked down and regular scans (although this is good practice anyway) • Best avoided unless you know what you’re doing!
    15. 15. Merchant BanksUser BackendYour Site Gateway Merchant Bank Company Bank
    16. 16. Payment Systems Merchant Banks End-to-end solutions Digital payment services
    17. 17. End-to-end Solutions• Provider offers another service and handles customer payment for you as part of their main service • e.g. Hosted shopping carts, Amazon shops• Settlement is normally periodic• Charges are often monthly plus a transaction fee • Most expensive of three options
    18. 18. End-to-end Solutions• Easy to setup• No need to handle sensitive customer data• Can be up and running in an hour• Normally completely hosted on providers servers so no need for a website/shop • Can be considered both good or bad
    19. 19. End-to-end Solutions• Check T&Cs for refunds and chargebacks• Beware of international exchange fees and how to remove funds• You normally end up locking yourself in. Beware if you want to move at a later date • Isn’t always easy to get existing customer data out if do move
    20. 20. End-to-end Solutions• e.g. Amazon • They provide shop, charging and even fulfilment • Fees are: 8-15% + $1-2• e.g. Clickbank • They provide e-product delivery and perform charging. You host sales/marketing site: • Fees are: 8.5% + $1
    21. 21. End-to-end Solutions User Backend Shop Shop’s Bank (monthly transfer) Company Bank
    22. 22. Payment Systems Merchant Banks End-to-end solutions Digital payment services
    23. 23. Digital Payment Services• Give access to a ‘virtual’ wallet• Funds can be withdrawn to a bank account or kept for use at a later date• Charges are typically 3.4% + 0.20• Seamlessly handle translation between different currencies
    24. 24. Digital Payment Services• Easy to setup• No need to handle sensitive customer data• Can be up and running quickly but no automatic delivery of goods or backend stock management systems• Are presented as if an account is needed to pay but that’s not the case
    25. 25. Digital Payment Services• Are known for overzealous fraud systems • Too much, too quick, or too many complaints can lead to account freezes • Watch out for fraudsters who claim goods were never delivered • always use a registered courier • digital goods is pretty much impossible to protect yourself against
    26. 26. Digital Payment Services• Customer must leave your site to pay• Difficult to setup but lots of modules exist that can be used to integrate in with standard store software• Alternatively can be managed manually where the merchant uses the email notification to send out digital/physical goods
    27. 27. Digital Payment Services• e.g. PayPal • the most widely used but also have a small crowd who religiously avoid• e.g. Google Checkout (now Google Wallet) • newer but backed by big tech giant. Yet to make a serious dent into PayPal’s market share
    28. 28. Digital Payment Services User Backend Payment Service Company Bank Your Site
    29. 29. Selling Online
    30. 30. How do you sell online?• Payment is only half the story. You also need warehousing, stock management, promotions, analytics and reports, the ability to issue refunds... • Easily avoided if you’re selling less than a few items each week • Automation quickly becomes necessary after a certain point in order to scale
    31. 31. How do you sell online?• It’s normal to have software that the payment processor integrates with (merchant banks and payment gateways) to manage the day-to-day processes of selling online• This varies between selling tangible goods and digital items so we’ll look at each in turn
    32. 32. Selling Tangible Goods• Procedures well established and normally just a virtualisation of these• Some very advanced systems that can suit any scale on online shop • e.g. Shopify, Magneto, 1ShoppingCart...
    33. 33. Selling Tangible Goods• Software creates shop for you and integrates with your payment provider of choice • There are limitations though so make sure your chosen merchant bank or payment gateway is supported• Some solutions can handle the hosting and domain registration as well
    34. 34. Selling Tangible Goods• Most charge a monthly fee, starting at $100/month• Due to price/complexity not so well suited to small online merchants• As with payment gateways be sure to check you can get your data out if you decide to move at a later date
    35. 35. Selling Tangible Goods User Backend Payment Service Company Bank Shop Solution
    36. 36. Selling Digital Goods• Digital differs from tangible in that: • No stock management is required • Delivery of digital items can be instant once payment has cleared • No costs or effort to sell extra items - all effort/ time is in creating the original item• e.g. Digital Delivery App, e-junkie, Fetch App
    37. 37. Selling Digital Goods• Tend to have a bit of HTML code that you copy to your site • No software or hosting provided so you need to create your own shop• Can often be used to sell simple tangible goods as well• Again be careful which payment gateways your chosen solution integrates with
    38. 38. Selling Digital Goods• Prices start at $9/month up• Various options on whether: • you host your files or not • protection of files • affiliate system included or not • ability to customise to your brand...
    39. 39. Selling Digital Goods User BackendPayment Service Company Bank Digital Delivery Your Site Solution (email)
    40. 40. Examples
    41. 41. Questions?

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