Payment Gateways (Third Party Agreement)

[ChrisCUK18]

Hi All,
I'm trying to find a solution to taking online payments. The problem I'm having is that my company is very similar to JustEat.co.uk, whereby our website is the ‘middle ground’ between the customer and the person delivering the takeaway.

I thought it would be a simple process of getting a company to manage all the payment processing and distribution of payments to the takeaways. However after numerous applications I’ve found that most high-street banks such as RBS, Streamline, Barclaycard don’t accept online merchants whose business model is classed as a third party (i.e. we don’t actually deliver the goods a third party does) so my applications were instantly declined.

Has anyone come across this before and what was their solution? – I believe I need a payment company that supports a “Drop Ship Agreement”.

The one company I have had talks with is PayPal who offer the above, they will take the payments and automatically move them into other PayPal accounts (Adaptive Payments) however this method cannot be integrated into my site. The customer will be transferred to PayPal to process the payment and then returned to my site, whilst this isn’t a major issue it does effect usability and something I would rather avoid if possible.

The 2nd company is Pay Point however their fee’s seems higher than other and have said it would be 4-6 weeks for the funds to clear for each payment, which is too long and could cause cash flow issues for the takeaways.
Does anyone have any advice on getting a system to integrate into my website, take the payment and then automatically distribute it to the right person?

Failing that a company that will provide a merchant account for Drop Ship/Third Party suppliers and then BACS the payment across weekly?
Surly there is something more ‘automatic’.

I’ve noticed other website such as Hungry House, E-Resistible that also offer this online payment/third party delivery setup, anyone know who they are using for their payments? And how they distribute the money.

Thanks in advance for your advice.

 

[ManWithBagOverHisHead]

It doesn't really answer your question directly but perhaps you need to change the legal situation, so rather than taking payment on behalf of shops, you are effectively their reseller.

2checkout works like this - the legal situation when you sell the goods on your site is that 2checkout buys them from you and then resells them to the customer (but with agreement for charge backs etc). It seems to be a legal mechanism to get around the legal issues of taking payments for someone else. Perhaps you could look at having some kind of similar arrangement (though would need to look at tax situation etc).

Would people make one order that mixed food from different takeaways? If one order was only ever from one takeaway, you could ensure that each of them was setup with their own account (paypal, etc) and then dynamically switch to the correct account on your payment pages depending on what was ordered?

 

[ChrisCUK18]

Thanks for your reply...

It would only be 1 order from 1 takeaway, not mixing orders from different suppliers.

What I can't understand is how these companies are currently opperating, as E-Resistable say that streamline handle their payments, but after speaking with streamline they say they don't support this method?!?!...

I was going to use PayPal however it would require the customer moving from our site to paypals and then back again which I'm trying to avoid.

Any other suggestions anyone?

 

[emailexpert]

I am not sure if you fully understood what Manwithbag meant.

IE You sell the food direct to the customer. Your contract is with the restuarent they supply you. This would mean you don't breach the banks rules.

The same as selling anything else online where you are not the maufacturer, you buy and sell on. The fact you do not hold the stock should not be a major issue as long as you are reasonably expected to be able to supply.

Hope that added some light. I think BagOverHead has made very good suggestion.

 

[ChrisCUK18]

Ahh I see..

So how would I word this.

That I am a reseller. Just thinking how to convince the bank how my business works. Without them saying I’m a 3rd party and won’t support it.

The business current account etc is all setup fine, its just getting the IMA setup thats seems to be a problem.

 

[emailexpert]

Not sure, some suggestions though...

Online food retailer
Foodstuffs eTailer
Internet Providor

Basically you are selling cooked food online.

Another way to do it is just charge a booking/delivery fee online and let the retailer pick up the payment for the food. All depends on your model though. It wouldnt have to be fixed price. In the travel industry they take 5% of the booking online at many sites. This is the agent sites commission. SO you could do the same.

This assures the restaurent that the purchaser is serious as they have paid a deposit, and they can get paid directly

 

[benjamin_c]

Have a look at the sage pay complete package, their fees are reasonable and their application process is said to be straight forward, http://www.sagepay.com/products_services/bolt_ons/merchant_services/pricing good luck, if you choose to use this package let me know how fast the precess was as i'm considering using them my self

 

[rbeatonApp55]

All - have a look at app55.com This Third Party Processing is exactly the problem that we solve. So ChrisCUK18, our service allows you to set-up a system like Just-Eat without the hassle. The money flows directly from the card-holder to the existing merchant account - which means that there are no legal implications and no issues with PCI for either you or the merchant. Also, we also enable payment over multiple devices like mobile phones and iPads etc. Let me know how you have got on with you business and if you have any questions - feel free to get in touch.

 

[CharityClear]

Hi,

We have contacts at a few of the merchant account providers and I would be happy to pass your details on and explain the problems you're facing. The contacts I have are usually good at giving productive feedback.

For the payment processing side of things we offer some of the most competitive rates in the market, no set up fees, a free virtual terminal and a personal account manager. Our key difference however is we give 100% of our profits to charity.

Please contact me directly if you would like me to speak to our merchant acquirer contacts on your behalf.

Marc Kelly
Sales Manager
www.charityclear.com
0800 032 2991

 

[Tommo]

I was in the same situation as you, my account has just been setup (yesterday) with Card Save - so can't comment on them yet, but they have accepted me at least

 

[ChrisCUK18]

I was in the same situation as you, my account has just been setup (yesterday) with Card Save - so can't comment on them yet, but they have accepted me at least

Hmm.. I went through an application with card save and was refused (even after passing all credit checks) due to it been a third party processing.

Might give them a try once again... however I'm currently looking at App55

 

[PayVector]

Chris - Seen this many times in the past. Another example is ticket sellers.

The problem is that you cannot sell something that does not belong to you via the card schemes. The analogy I always use it as follows. There are two shops on a high street. Shop 1 has a card machine and Shop 2 does not. However Shop 1 owner being friends with shop two agrees to allow Shop 2 to process any card transactions through his machine. Shop 2 ends up going bust without delivery all the goods/services it processed through shop 1. Shop 1 is then actually financially liable.

The way around this is you must have contractual language with each off your takeaways that they sell you, if even for an instant, the takeaway which you sell on to the end consumer. They must then invoice you minus your commission for anything sold.

 

[rbeatonApp55]

I disagree - but it is moot point. Look at Amazon, they sell "stuff" on their website and they do not own all of it.

What is possible is the service that App55 currently offers, we process the the transaction on you AND the sellers ( or the merchants behalf ). So the merchant actually sells it. As they receive the money and are responsible and for shipping etc. You create the website or app that initiates the payment. Therefore you have no liability for the goods or service - just to ensure that the order is taken and payment is made.

 

[ChrisCUK18]

I disagree - but it is moot point. Look at Amazon, they sell "stuff" on their website and they do not own all of it.

What is possible is the service that App55 currently offers, we process the the transaction on you AND the sellers ( or the merchants behalf ). So the merchant actually sells it. As they receive the money and are responsible and for shipping etc. You create the website or app that initiates the payment. Therefore you have no liability for the goods or service - just to ensure that the order is taken and payment is made.

I've sent you an e-mail for more information

 

[rbeatonApp55]

Thanks Chris - I've had to dig that email out as it got classed as junk. I'll get back to you asap.

 

[SecureTrading]

The issue is who owns the goods not who is selling them. If you PM me more information we can discuss the situation with our acquirer contacts (both in the UK and Europe) to see how they view it and what options you may have.

 

[rbeatonApp55]

SecureTrading that is too simple a summary. As you will probably agree - the assumption normally is that the seller owns the goods prior to transaction and that purchaser does afterwards - hence the title third party processing. You cannot "normally" sell something that is not yours and something special has to be put into place.

So the real issue is clarification around responsibility and liability for the transaction versus that of the responsibility and other liabilities relating to the good or service obtained prior to and after a transaction.

There are solutions available - you just have to be able to clarify exactly what service it is that you wish to perform.

 

[SecureTrading]

SecureTrading that is too simple a summary. As you will probably agree - the assumption normally is that the seller owns the goods prior to transaction and that purchaser does afterwards - hence the title third party processing. You cannot "normally" sell something that is not yours and something special has to be put into place.

So the real issue is clarification around responsibility and liability for the transaction versus that of the responsibility and other liabilities relating to the good or service obtained prior to and after a transaction.

There are solutions available - you just have to be able to clarify exactly what service it is that you wish to perform.

I don't disagree that my explanation was simple, but this is how most acquirers view it and probably explains why Chris has been dismissed by so many.

I also don't disagree that there aren't solutions out there, but you do have to be very careful with the myriad of card scheme rules to ensure you don't become liable to fines for breaking (or bending) them...

 

[pickaweb]

I can recommend worldpay and paypal.