Advice on Payment Processing and merchant account

[Philosopher]

Hi all,

I intend to have an Ecommerce site built which will be selling multiple vendors products to local consumers. The site will start small with few transactions. However, if all goes well I would hope to expand the network of local sales and have a very high sales volume within 3 years.

Could you please recommend a payment processor who would be good for this? And also a merchant account provider (if different to the PP).

Who have you used, were they bad? were they good? If so, what made them good / bad?

Who is best value? e.g. price to service ratio (no one wants to pay little for something that doesn't work when they can pay a little more for something that does)....

All info would be great thanks!

Please only recommend one if you have worked with them before or have direct experience with using them, e.g. setting up for a client...

Many thanks!

 

[cartaddon]

for merchant provider, you can use paypal, authorize.net, googlecheckout.

 

[Jayser100]

Google Checkout is a waste of time. I used to have both Paypal and Google Checkout on my websites and hardly anyone used the latter. In fact, it actually got worse over the space of a couple of years until hardly anyone ever used it. The main problem with Google Checkout is that customers have to open an account before they can use it to check out, whereas with Paypal they do not.

World Pay is worth looking at, since you can offer Paypal payments through it, hence it works for Paypal users whilst also catering for those who want an alternative. World Pay does cost to set up but it is highly trusted and buyer trust is vital when it comes to achieving a good conversion rate. This is a point often missed by people who moan about the cost of WorldPay.

 

[smo]

For low volume Paypal is probably best but its becomes expensive with volume.

As a proper setup i'd recommend streamline, partnered with a gateway of your choice (such as sagepay) or HSBC who have their own gateway too. We use both and have excellent rates for both systems.

 

[Nochexman]

...I intend to have an Ecommerce site built which will be selling multiple vendors products to local consumers...

Hi Philosopher.

By the sound of it the thing you need to be careful of here is that if you are selling goods on behalf of multiple vendors then that looks like aggregation, which is generally a no-no.

Having said that we have found a way of de-aggregaing this kind of business, and if you are interested, it would probably be worth getting in touch with Nochex and discussing your idea. At the very least you will find out if it is aggregation or not!

Best wishes,
- Peter (I work for Nochex)

 

[acceptcards]

Hi Philosopher

I agree with Peter, before you do any more work on this please do check that you are not going to be turned down by all the banks and PSP's once the business is live! There may be a simple way around it but you need to speak with someone who understands how the banks and acquirers view your business from a risk perspective.

In response to your original question, have a look on youtube at the acceptcardsuk channel and watch the following video which will give you a simple overview of what you are looking at (copy and paste the following into the youtube search bar) - 'acceptcardsuk taking payments via your website'

You should then have a better understanding of the options available, how the system works and also the benefits of a merchant account versus Paypal.

Good luck!

 

[PeteyH]

Hi Philosopher,

I currently use Nochex for the vast majority of my e-commerce transactions. Although I can't comment on their suitability regarding de-aggregation, I can independently confirm that to date I have been very impressed with their level of service and fee structure which is less than PayPal even on very small transactions / volume.

Well worth a look into IMO.

Hope that helps, if only a little!

Pete

 

[Philosopher]

Hi all could you explain aggregation to me please? I will contact nochex when I can, to have it explained. But a little explanation on here would be nice too.

 

[Tech4Homes]

Love it or hate it but PayPal is an easy and quick way to get you started, it's not the cheapest, but you can be up and running in a few days and the start up/running costs are minimal compared to a "proper" merchant account.

It's a good way to test the water and build up your sales before spending out on a full merchant solution. It's what I'm doing currently, the fees aren't /that/ bad considering...

 

[Websitehandyman]

I think if you are using it for multi vendors you'll need something special. You can't take payment from other people's customers. So you'll need to be able to allow the vendor to set their own payment setting. And then if you are charging the venders you'll need a monthly account process with you payment setting.

I think the only ones that will allow this is paypal, don't know if Nochecks does it.

 

[Philosopher]

If the site lists all products on one central catalogue and takes the full payment of that customers order at once, can that payment not go into my merchant account and then the commission deducted, then I pay my vendors?

If not do i assume that each vendor will need their own payment processing configured?

 

[Websitehandyman]

If the site lists all products on one central catalogue and takes the full payment of that customers order at once, can that payment not go into my merchant account and then the commission deducted, then I pay my vendors?

If not do i assume that each vendor will need their own payment processing configured?

No because your payment processor will treat you as the merchant and you would be liable for other vendors service. Just one issue that could crop up is if the vendor delivers faulty goods you will be liable for any problems - refunds, replacement or even injury caused. I think you'll find clauses in all processors terms and conditions covers this.

 

[Philosopher]

Could a contract between my business and the vendor create a situation where the vendor is responsible? For example how do eBay style sites (not eBay because they own PayPal) take the payment for the vendor and then send it on minus commission, without accepting responsibility?

 

[Websitehandyman]

Could a contract between my business and the vendor create a situation where the vendor is responsible? For example how do eBay style sites (not eBay because they own PayPal) take the payment for the vendor and then send it on minus commission, without accepting responsibility?

They don't.

Think about it, no processor is going to act as a go between so you can act as a payment processor for others. It's a problem specific to online payment, if you deal in cash it's not a problem.

 

[Philosopher]

Okay thanks for the insight, so can we assume that in a site like bigbarn.co.uk which takes payment for multiple vendors, each vendor has their own payment processing configured? I'm just struggling to understand how sites with a central catalogue of products listed by multiple vendors operates. Many thanks for the help so far.

 

[Websitehandyman]

Okay thanks for the insight, so can we assume that in a site like bigbarn.co.uk which takes payment for multiple vendors, each vendor has their own payment processing configured? I'm just struggling to understand how sites with a central catalogue of products listed by multiple vendors operates. Many thanks for the help so far.

Looking at their terms I found this which seems to suggest that is the case "BigBarn have partnered up with Lloyds Cardnet to reduce your credit and debit card processing."

 

[Philosopher]

Eugh that puts a major dampener on my business idea. Doesn't make it impossible, just more difficult. Right well the 20 odd web agencies I approached didn't warn me of this issue. Can I assume they are inexperienced in ecommerce and should I scrap their proposals on the basis that they didn't warn me of something you guys have made quite clear is a major issue? (The issue being that you can't take payments for other's services?). Let me know what you think.

 

[Websitehandyman]

Eugh that puts a major dampener on my business idea. Doesn't make it impossible, just more difficult. Right well the 20 odd web agencies I approached didn't warn me of this issue. Can I assume they are inexperienced in ecommerce and should I scrap their proposals on the basis that they didn't warn me of something you guys have made quite clear is a major issue? (The issue being that you can't take payments for other's services?). Let me know what you think.

Well to be honest it's not "you guys" saying it, so far it's just me. But I've been involved in things like classified ads and auction sites for some years. I had your idea myself and although it's not impossible to do it............to do it properly you do face these problems and more. In fact taking payments from other people customers and relying on merchants to deliver a good service also creates a lot of headaches. That's even if you get merchants to signup and trust you !

I know Cs-cart are working on a solution of sorts and software like phpprobid is cheap and allows venders to take their own payments. So perhaps you could go down that route.

However don't let me put you off, I may be wrong and those that quote you may be right. But in my experience it's always down to the buyer to make sure they understand what they are asking to be delivered. It's not hard to find a developer who will deliver what you ask for, that doesn't mean it will work the way you think it will or do the job you think it might.

 

[jacknarvy]

[FONT=Arial, Helvetica, sans-serif]I would recommend you check out Google Checkout. I use to process everything through PayPal. [/FONT][FONT=Arial, Helvetica, sans-serif]As a buyer I’ve had very good phone support from PayPal when needed.
[/FONT]

 

[Nochexman]

Hi Philosopher.

I think Websitehandyman has done a good job of explaining the issue.

The solution we offer is to enable you to offer a payment account to each of your sellers when they sign-up with you. This means you are adding value to your business proposition, making your service a little 'stickier', and it provides you with tools to collect commission from your sellers. This means you can make any charges you apply 'disappear' in to the transaction processing.

We're working with a number of people right now who operate this kind of business model. Please get in touch if you want to discuss.

Kind regards,
- Peter (I work for Nochex)

 

[Philosopher]

Peter should I contact you directly or nochex in general?

 

[Nochexman]

Hi Philosopher.

If you call 08432 890 109, anyone on that number will be able to help you.

Good luck!
- Peter (I work for Nochex)