Dummies Guide to Online Payments (specifically subscriptions)

[my_name_is_dave]

Hello! This is my first post. It's about time I joined a community like this as my deadline for making a million is fast running out.

Anyway, I have a website and what I would like is to let members of the site subscribe to it in order to access certain parts of it.

Of course, the big difference between subscriptions and one-off payments is that not only does the subscription have to be recurring but the banking system that deals with the money has to be able to communicate with my website's database to tell it that the payment has been succesful therefore member X has their access set to ABC (and of course, if payment fails or is cancelled then the member is deactivated).

So after doing lots and lots of reading I'd like to say that I have worked out what I need. But the truth is that I haven't. At all.

Therefore I was hoping that someone could just spell it out for me, what do I need to obtain next. I'm not asking for specific brands and businesses (although any recommendations will be happily received). I'm looking for what I need to be able to accept subscriptions.

So currently I have:

1) A website with a database
2) A normal savings account with Halifax

What's next? Gateways, PSPs, merchant accounts, IPNs... waaah! Which is what, which go with which and which do I need??

Thanks! I look forward to your replies and also to spending a lot of time on these forums

 

[PayPoint net]

Hi there -

Welcome to forum.

You need two things to process a payment online: a payment gateway and an internet merchant account.

The payment gateway processes the payment and the internet merchant account is the account into and out of which you transact (customers make payments in, you might refund payments out etc.) before the funds are settled to your business bank account at regular intervals.

You do not have to get your internet merchant account from the same provider as your payment gateway; however, payment gateway providers will have relationships with a number of banks that they may be able to leverage to get you more favourable rates. If this is your first online business, you might have problems securing a start-up merchant account from your usual business bank, so do shop around. We have an article on our site with some questions to ask when shopping for your IMA.

Most payment gateways - including our own - feature support for recurring subscription payments.

Hope that helps - just shout if you have any other questions!

The best of luck with your business
Rochelle

 

[TotallySport]

with these people you only need an account with them, a business bank account and a spreadsheet.

http://www.fastpayltd.co.uk/

 

[SecureTrading]

with these people you only need an account with them, a business bank account and a spreadsheet.

http://www.fastpayltd.co.uk/

FastPay are a good company, but they specialise in online direct debits and not credit and debit card acceptance. As Paypoint have already stated you need an internet merchant ID from an acquiring bank that is set up for recurring payments and a payment gateway to connect you to the bank. We too can help you obtain this and would be happy to discuss further.

You can also look at PayPal, but their charges can be expensive dependant on your volumes

 

[TotallySport]

FastPay are a good company, but they specialise in online direct debits and not credit and debit card acceptance. As Paypoint have already stated you need an internet merchant ID from an acquiring bank that is set up for recurring payments and a payment gateway to connect you to the bank. We too can help you obtain this and would be happy to discuss further.

You can also look at PayPal, but their charges can be expensive dependant on your volumes

the OP doesn't specify they want online credit card payments, they said they want subscription type payments, direct debit is more than capable of doing that, and doesn't need a merchant account which will need a credit check, and can be done manually through a spreadtsheet, or can be fully intergrated with API's if needed.

Best to know all the options and not just the ones being promoted becuase they provide the service

 

[SecureTrading]

True, but statistics show that credit and debit cards are more widely used than direct debit online. It may be an idea to offer FastPay in addition to to a provider like us as research also shows the more payment options you offer the more sales you can expect to achieve...

 

[TotallySport]

Statistics can show anything you want, but until recently Direct Debit was far more expensive than creidt card payments (to setup and use), so it makes sence thats statics show its more popular, however companies like Fastpay have made it more affordable, and better, as recurring transactions relies on a credit/debit card being in date and the details being kept upto date, direct debt runs the account which isn't generally going to run out after 2 years. Also now fastpay offer API's the intergration is very similar, and depending on how much and how often direct debit could be massively cheaper (and vise versa).

I do agree, there should be different options for payment types, but you need to know the whole picture to offer the best choice.

 

[SecureTrading]

I do agree, there should be different options for payment types, but you need to know the whole picture to offer the best choice.

I'm glad we agree!

 

[dx3webs]

@my_name_is_dave

What you need is an extensible content management system that can be adapted to a membership subscription system through the use of a plug in.

If I were doing what you have described I would use wordpress as my starting point with one of the many (free or very cheap) membership plugins. eg magicmembers plugin or similar.

I am quite sure that joomla / drupal have similar plugins available.

These ready written systems come with plugins for paypal, moneybookers and other payment systems.

You can of course start from scratch and write your own membership system and payment system using the api's provided by the various gateways.

Why bother when someone has already done all the work for you.

 

[ORDERED WEB]

@my_name_is_dave

What you need is an extensible content management system that can be adapted to a membership subscription system through the use of a plug in.

If I were doing what you have described I would use wordpress as my starting point with one of the many (free or very cheap) membership plugins. eg magicmembers plugin or similar.

I am quite sure that joomla / drupal have similar plugins available.

These ready written systems come with plugins for paypal, moneybookers and other payment systems.

You can of course start from scratch and write your own membership system and payment system using the api's provided by the various gateways.

Why bother when someone has already done all the work for you.

Spot on

very good advice

 

[my_name_is_dave]

Thanks for the replies, guys. I'm gradually pieceing it together.

Here's a bit more info about what I have and what I'd like:

I have a website with a MySQL database. I am a web developer so I have coded everything from scratch (and am more than happy to continue doing) so a premade template or plugin isn't necessary.

As long as a payment gateway is able to send my website details on any transactions that have happened then I can interpret them and automate it to update the database no problem.

I did some more reading. Apparently an Internet Merchant Account isn't very simple to get? I'd need to have a detailed business plan and income projections etc?

Why is this? Given that these accounts seem to cost around £20 per month plus transaction fees why are banks cautious about who they give these things out to? At the end of the day they're making money, even if I don't sell anything? Why is there that much effort involved in getting an IMA?

I just want something that I can set up so that I am able to drop some code on any website I make and it will be able to process payments. If I don't start making money for 6 months then it shouldn't matter to anyone other than myself, should it? If I have a payment system all set up then am I able to just make a website the next week and use the same payment system for that too?

I've made a high quality graphic to show you how I'm picturing all this. Is it correct?

*****
EDIT: ********, it won't let you see my graphic because I've not yet made 15 posts If you can be bothered checking it out manually the url is i.imgur.com/uRgSM.jpg
*****

So the customer goes to the website, pays from the website through the Gateway, the money then goes to the IMA and then shortly after into my (normal savings - not business?) bank account after which I can withdraw it and spend it on material possessions to try and fill the bottomless void in my soul?

And meanwhile the customer's payment info is sent by them to the Gateway which passes it on to the IMA which takes the funds from the customer's bank and makes sure everything is okay before sending confirmation of this back to the website which then updates the database setting the customer's rank to X, allowing them to access the site. And this is redone every month automatically!

Am I right?

And if so, what kind of costs am I looking at for a Payment Gateway / IMA total solution which can handle recurring subscriptions? Bear in mind that I'm not going to be turning over thousands of transactions and millions of pounds a month. I will certainly be over on the 'small' side of the scale of business sizes. Well, to begin with anyway.

Thanks again for your help and advice

 

[TotallySport]

To answer your questions as much as possible:

A merchant account is a risk for the bank, which is why there are checks to be done, it isn't hard to get a merchant account if you have a low risk plan, if your high risk its very hard to get an account, you will also need to pass a credit check, but without know what your plans are its impossible to suggest the likelyhood. One thing you need to make sure is you get a merchant account with recurring transactions, some like streamline do them seperatly, others will just add on the service.

If you want a streamline merchant account, you can Join the FSB and get free setup (£250), free monthly subscriptions (£30) and the fees are upto you to negociate, and again this will depend on risk. Sagepage is £20 plus VAT for 300 transactions a month, but I wouldn't recommend them at the moment.

Most payment gateways should offer recurring transactions (also called repeat authentication) setup will depend on what you need, and there info.

Basically you build code that collects the information from the forms, and other info, then you send that over the internet through API's to the gateway, its a bit like submitting a form, but everything is done on the same page and happens very quickly, they send a repsonse and you process that however you want, so if the response is accept, you go through the sale stages of your code. With recurring transactions to store a key, which is link to that person and your merchant account and your gateway, so next time you process it you send the key and other information thats needed not the card details.

Its very interesting to setup, but you need to have the documentation to really get the feel, and don't get over bogged down in the detail, better to get the merchant account and gateway inplace and build it, that will really get the understanding.

If you want a quick and easy low cost startup solution, then Paypal pro does this, and will have a lot less checks involved, you could build up a sales history and it will make it much easier to get a proper merchant account.

Can I ask how old are you?

 

[CharityClear]

Hi,

We can assist with the payment gateway side of things. £18 per month with no hidden charges, set up costs, charges for add-ons etc 350 free transactions are included per month and each additional transaction costs 9.9 p therafter. We include a free virtual terminal, personal account manager and we can asssist you in the application for a merchant account. We also give 100% of profits to charity.

Feel free to get in touch.

Marc Kelly
Sale Manager
0800 032 2991
www.charityclear.org.uk

 

[SecureTrading]

Why is this? Given that these accounts seem to cost around £20 per month plus transaction fees why are banks cautious about who they give these things out to? At the end of the day they're making money, even if I don't sell anything? Why is there that much effort involved in getting an IMA?

I think you are mixing up Payment Gateway costs with Acquirer costs. Most acquirers will charge ad valorem (%) for credit cards and pence per transaction (PPT) on debit cards. The rates will depend on your risk profile (age of business, past history, trading history, product sold etc.), average transaction value and predicted volumes. Again we can help you with this and will most likely get you a lower rate than if you went direct to the bank.

I just want something that I can set up so that I am able to drop some code on any website I make and it will be able to process payments. If I don't start making money for 6 months then it shouldn't matter to anyone other than myself, should it? If I have a payment system all set up then am I able to just make a website the next week and use the same payment system for that too?

Banks do incur costs for setting up your MID and having it live on the system. The acquiring bank's risk team will also most likely want to see your site before they issue you with a MID. The site doesn't have to be public, so you can keep it password protected, but you should have all your terms and conditions in place. I'd also recommend using tokenisation so that you are storing the card numbers yourself and therefore don't have to worry about PCI

 

[DotNetWebs]

...Also now fastpay offer API's ...

Do you have a link to this info as I would be very interested but couldn't seem to find anything on their website.

Regards

Dotty

 

[TotallySport]

we don't at present, you have to go through a manual process for 4 months, after which they give you the API information, we are still building, so no where near the 4 months, plus I doubt I would be allowed to pass on the info. But if you talk to them they should be able to help, very nice people to speak to. (Can I ask what you want it for?)

 

[DotNetWebs]

...Can I ask what you want it for?...

Basically we currently have a subscription model based on members paying by standing order.

We have a membership database of current subscribers but we still have to manually check our bank records to ensure the standing orders are being credited.

Besides the obvious benefits of switching to direct debit it would be very useful for our admin system to be able to automatically check [via an API call] that the credits are being made.

Regards

Dotty

 

[Deleted member 106254]

If you're coding it yourself from scratch why not just use a PayPal account and use PayPal subscriptions then query their API to find out which subscriptions were successfully renewed? That way you don't need an Internet Merchant Account and customers can pay by PayPal or credit/debit card. The more payment options you offer, the more subscribers you will get.

 

[BusinessM8]

Managing your website and it's interface with service providers is key. Poor management generally leads to poor results - trite but true.

If you go down either or both the card/Merchant Account/PayPal and the Direct Debit route the information about the transactions is made available by that (or those, if you choose multiple routes) provider. This is usually via an API (an application programming interface) which is a particular set of rules and specifications that a software program can follow to access and make use of the services and resources provided by another particular software program that implements that API. It serves as an interface between different software programs and facilitates their interaction, similar to the way the user interface facilitates interaction between humans and computers. Whoever sets-up and manages your website will affect its effectiveness and ease of use far more than the service provided by money collection processes.

It seems to me that you need to choose your provider by considering more parameters than just the relative costs, eg:

• set-up costs
• ongoing costs
• other services (there are several providers that offer either or both a 'payment gateway' (that actually collects the money) and a 'merchant account' (that allows you to collect that money)
• the ease or otherwise of using and integrating their services - their API - check out the forums (and sometimes 'wikis'), that they provide. (If there isn't one ask yourself why!)
• their 'reputation' - do some 'heavy' search engine work and look at well known 'consumer advice websites' such as Martin Lewis's MoneySavingExpert website

I hope this helps?

All the best

Tim

 

[ORDERED WEB]

You also need to consider PCI DSS compliance

My advice to a lone developer, is "Make sure you do NOT take the credit card details on YOUR site". Go with a payment provider that can manage and initiate each periodic payment for you.

With all the will in the world, as a lone developer, you are not going to keep up with the hackers and the subsequent demands from the banks to be compliant