Best Value Way to Accept Online Payments

[rory_way]

Hi,

I'm creating a comparison website (more of a quote gathering service) which will require customers to pay me, and then me to pay the suppliers. From which I will take a commission of say 5%.

Payment via standard debit cards, mastercard & visa.

Lets say sales are to be around £10,000 per month (commission of £1,000) coming from around 100 individual transactions.

What would be the cheapest way to accept these payments?

Thanks.

 

[amac]

A payment gateway through your bank or someone like authorize.net. This will cost you e.g more than the usual online folks Paypal etc but much more suited to higher volumes. Alternatively, you could use someone line Stripe - more developer friendly.

 

[MattCollins]

Hi Rory,

To add to the previous comment, I understand taking payments on behalf of other people in this way can get quite complicated.

A few things you may want to bear in mind:

• You may find it hard to get a merchant account because providers will consider this a risky business model (see next point).
• If a customer disputes a payment, are you going to be liable for refunds and chargeback fees and potentially have trouble getting refunded in turn by the supplier?
• Will receiving the payments give you legal liabilities that you'd rather not have? (I believe the exact wording of your website can be important here.)
• You'll be paying the credit card processing fees so will either need to eat that cost or pass it onto the suppliers (which may be more visible to them than if they pay the processing fees in the first place.)

In case it helps, here are a few alternative ways of doing things that might be worth considering:

1. Pay Suppliers Directly: Each supplier sets up a PayPal account or similar and your website sends payments through to them. You then invoice them for your commissions, perhaps on a monthly basis.
2. Split Payments: Use a payment processor that can split a payment between two recipients. 5% goes to you; 95% to the supplier. (Again, each supplier would need their own account to receive the funds.) This way, any refunds will automatically be recovered from the supplier as well as from you. PayPal's Adaptive Payments could be worth looking at: https://developer.paypal.com/docs/classic/adaptive-payments/integration-guide/APIntro/
3. Charge Per Lead: Charge the suppliers on a different basis, e.g. on a per-lead basis. Let them take the payments on their side. Invoice them on a regular basis.

Hope this helps.

 

[Payment Expert]

Processing on behalf of others might get tricky, especially if multiple MCC codes are involved. 10000K is a low volume, so initially you will have to pay around 2.9% in either case and you should go with anyone who will let you do what you want. Once your volume is high, you could consider other options. So, I think this article might be useful for you http://paylosophy.com/hosted-licensed-house-payment-gateway-solutions/.

Hope it'll help.

 

[rory_way]

Thanks you all for your responses.

Matt, You raise some valid points which I had considered. The issue of refunds is something I haven't worked around as of yet. However I'm particularly interested in either setting up payments to the supplier and then getting monthly commission or using the split payment method. I will look into that. I just have to convince the suppliers to do this, I don't suppose that'll be a particular issue though. Thanks.

 

[japancool]

Processing on behalf of others might get tricky, especially if multiple MCC codes are involved. 10000K is a low volume, so initially you will have to pay around 2.9% in either case and you should go with anyone who will let you do what you want. Once your volume is high, you could consider other options. So, I think this article might be useful for you http://paylosophy.com/hosted-licensed-house-payment-gateway-solutions/.

Hope it'll help.

We pay a lot less than 2.9% and we're not doing close to £10k a month though.