E commerce bank charges/Paypal

[Jyemstone]

Hi all


I think I posted this in the wrong thread earlier ...


I’m currently looking into setting up my business bank account. I’ll be trading online and have spoken to HSBC who put me in touch with someone who dealt with their merchant accounts. She couldn’t tell me anything about their charges for accepting credit card payments as it all depends on the type of ecommerce system that I use. Then she blinded me with science and began talking about the 4 types they use, but wouldn’t tell me which was the cheapest :|

So I phoned Nat West today and they charge £150-£250 to set up the account to accept card payments, then a 1%-4% fee is applied to each transaction.

I’ve recently found out that Paypal Business Account just charges a small percentage per transaction with no set up fee.

I’d like to know if people are using Paypal … or paying the higher bank charges per card transaction, or is there an alternative?

I'm unure about HSBC now - anybody got any recommendations.

Cheers
Jem

[Michelle_HLD]

Hey Jem,

My god this took me so long to get my head around in the beginning. My merchant account is with Barclays and my payment gateway is Protx/Sagepay.

Some Merchant banks are very funny about offering decent terms to web businesses. For example in the beginning Barclay's wanted to offer us 30 day terms which means I get paid from the customer and then have to wait 30 days for it to hit my account which is outrageous!

It took a lot of work and emails and legal/press threats to get them to review their terms. We are now on much better terms which makes things a whole lot easier as you can imagine.

I think you need to speak with the Big 3 so HSBC - Lloyds and Barclays to find out more.

There is a difference between a merchant account and the payment gateway. I would definitely recommend using Sagepay/Protx - they are SO cheap and i have used them for 2 years with ZERO problems.

Basically when I take a sale on ,my site it takes the customer to Sagepay which then send the money to Barclays. If I do a telephone sale I log into Protx/Sagepay and take the information over the phone and then click complete order if that makes sense?

Sorry if you already knew how it works but when I was starting out I really just couldn't understand it! lol

[Jyemstone]

Thanks Michelle

No, I didn't know how it worked and will have to do some reading up, but you've explained it clearly for me. When I spoke to Nat West they said they use Streamline which I know most shops use.

Your explanation of Sagepay sounds like one of the options I was told about from HSBC, but I need to go armed with knowledge next time as I had no idea what she was talking about and she didn't explain it very well.

How did Barclays expect your business to survive if you receive payments 30 days later?

Ridiculous!!

Jem :)

[Green Jelly]

Hi Jem,

I use PayPal for my transactions. I decided to use them when I set up my site as I was not sure of how sales would go in the beginning and although PayPal charges a bit more per transaction I didn't want to pay a set up fee plus a monthly fee of say £20 if I didn't get orders that month.

If you are starting small then PayPal is a good place to begin. When the orders start to come in you could either change to SagePay or similar or add them as well as Paypal. It is worth noting that some people prefer PayPal as they sell things on Ebay and have money in their account waiting to be spent.

Regards withdrawing money from PayPal - as long as it is in amounts over £50 there is no withdrawal fee and it take about a week max.

One tip for HSBC is that if you join WiRE (women in rural enterprise) there is no set up fee and preferential processing rates.

HTH

Sharon

[Jyemstone]

Thanks Sharon

I'm seriously considering Paypal because of the lower fees that obviously benefits start ups and everybody knows its name *hums the theme tune from Cheers for some reason*.

Is it easy to transfer the fees into your business bank account?

I'm liking WiRE but i'm based in London. Do you think that constitutes as a rural area LOL

Jem

[alanc]

Is it easy to transfer the fees into your business bank account?
You first have to go through a bit of a dance to associate a bank account with your PayPal account, but once that's done, transfers are very easy.

You can play the merchant banks off against one another. The rates are negotiable.

Worldpay and NoChex will process cards for you without the need for a merchant account. They are another good entry route for start-ups. Quite low rates, too. PayPal is one of the highest rates.

[Green Jelly]

Once set up it is really easy to withdraw the funds. Hmm....London as rural? Maybe not!

[Jyemstone]

No – not rural enough Green Jelly, but never mind.

Alanc, I thought that business bank accounts were linked to or were merchant accounts? So I can set up my bank account and link it to Worldpay or NoChex for even lower rates? Are they similar to Paypal in that I have an account with them and transfer the funds to my bank account?


Need to read up on all of this tomorrow as i'm trying to do about 10 things at once at the moment :)


Jem

[PayPoint net]

Hi there

We put together a number of articles that you may find useful getting started with online payments (http://www.paypoint.net/online-payment-guides?utm_source=forums&utm_medium=forums&utm_campaign=forums).

Fee free to come back if you have any questions - good luck!

[deadgoodundies]

One thing I would advise is that don't look at as either paypal OR a card payment processor (like sagepay) look at it as card processor AND paypal.

People like to have the choice on how to pay and although i wouldn't do paypal on it's own being able to let the customer choose either method is certainly a better option.

Also I think if you join the small business federation ( think that's what it is called you can get a much better transaction rate via streamline)

For our card processing needs we use Sagepay via VSP direct and Streamline as our merchant account and if we release the money from sagepay before midnight it's in our bank within 48 hours.

[NICHOLASM1987]

ive had bad problems with paypal they ask to many stupid questions, but one thing worth considering- the government do not protect pay pal accounts if your transactions are for thousands and you leave it on your paypal account you could wake up one day and find your money gone, thats if they ever go bust. i like to plan for every eventuality lol

[deadgoodundies]

Thats why you should only retain a minimum balance in your paypal account at any one time (just enough to cover any refunds you may need to do).

One thing with paypal that im impressed with is their new double lock feature.
If you need to access your paypal account, in addition to the normal login and password you can opt for a SMS being sent to your mobile which will contain a unique pin code that is only valid for a short amount of time.

True with paypal they often side with a customer in the event of a dispute but as long as you have all the correct paperwork to back yourself up (for example customers signature confirming delivery) then personally i've very few (not even 3 if my memory serves me well) problems.

[Tom McClelland]

We use Paypal and we're very happy with it.

Their support for business customers is excellent, and the fees seem extremely competitive to us. As others have said make sure that you set up the account permitting credit card payments as well as paypal account payments.

When you want the money you get it transferred to your bank account and it usually appears in a few working days. You can withdraw every day if you want to, and withdrawals are free if they're above the (low) floor limit.

Also setting up your website to process transactions automatically is very easy. Their software interface is much easier to program against than (for example) google checkout.

They do have a reputation for siding with buyers if there is a dispute, but this can work for vendors, because it makes buyers less reluctant to make the purchase.

We've got the security key login, which gives us extra confidence about passing so much money through an online portal.

[Jyemstone]

Thanks Tom and others

I'll look into setting up the account for Paypal and credit card payments.

Jem