Receiving Payments from Customers

[JesseDropIn]

Hi All

New joiner here. I have been sitting on an idea for the last number of years and like most, with either the thoughts of having another revenue stream or to not be making money for other people, I have decided to take the plunge and give the "burning idea" some serious thought and start to make some sort of move forward

Initially I want to run something to show proof of concept and do it on a small scale before investing serious money into it.

I have done the very small steps of purchasing the domain, email, logo design and in the process of building the website / landing page. This in itself has been a learning curve that I am enjoying.

As this is in the early stages I do not have it registered as an official company as ( in Ireland anyways) the cost and processes to even have small or dormant company is relatively expensive,

So with that in mind I was looking to see if anyone has any ideas on tips for is the best method of transactions to get the business up and running on a small scale.

To give an idea of the goal, or at least similar to it, I guess it would be the same model as JustEat ( however food is not the service I will be providing) and a multi verndor platform. so customers use the website and payments will run from here to the vendor/partner for the services they provide.

Websites like that cost a fair bit to set up and maintain so on a small scale, what would be the best way to receive payments and send to a vendor. For most I believe you need a VAT number to set up. I was thinking of just running it off my own Bank A/C and Revolut but just wanted to see any one had any ideas. Thanks in advance

 

[fisicx]

Make payments for what?

 

[JesseDropIn]

Make payments for what?

Similarly not Just Eat the customer would pay via the website and the money would go to the vendor. They'd be paying for whatever servicer the vendor is providing and could be a whole host of different services. Not just a physical product. E.g a dog walking service.

Just I was wondering was there any ideas on a small basic version of that that people may know about not using stripe and the likes

 

[Ozzy]

Initially I want to run something to show proof of concept and do it on a small scale before investing serious money into it.

Good idea, completely agree do a small proof of concept to test viability before doing anything big.

So with that in mind I was looking to see if anyone has any ideas on tips for is the best method of transactions to get the business up and running on a small scale.

Websites like that cost a fair bit to set up and maintain so on a small scale, what would be the best way to receive payments and send to a vendor. For most I believe you need a VAT number to set up. I was thinking of just running it off my own Bank A/C and Revolut but just wanted to see any one had any ideas. Thanks in advance

These next two above are linked and the same..
I would suggest using a gateway (like Stripe). This website uses Stripe for its payments, and UKBF is not VAT registered, you don't need to be VAT registered to setup a payment service account.

Do not use your personal bank account, create a separate account and keep all the financials separate, otherwise you can find yourself getting into a mess keeping the 'business' and you separate.

 

[fisicx]

To make payments you need a payment portal: PayPal, Stripe, Revolut, Wise, Visa and many others.

They all require you to create an account or make a payment with a credit/debit card.

It's easy to set up a site to do this. The complicated part is making sure I pay the correct vendor and the money gets transferred to their bank account. It's likely you would need some sort of FCA approval for this.

But a Dog Walker would need to invoice the client and the invoice would have their bank details. It takes me a couple of minutes to set up the payment on my phone.

Other vendor operating face to face can buy a sumup machine for a few pounds and do the transaction immediately. No need for the buyer to go to your site, create an account and make the payment.

So whilst this a great idea of yours, there are already a number of ways for people to take payment either online or in-person.

 

[JesseDropIn]

Good idea, completely agree do a small proof of concept to test viability before doing anything big.



These next two above are linked and the same..
I would suggest using a gateway (like Stripe). This website uses Stripe for its payments, and UKBF is not VAT registered, you don't need to be VAT registered to setup a payment service account.

Do not use your personal bank account, create a separate account and keep all the financials separate, otherwise you can find yourself getting into a mess keeping the 'business' and you separate.

I didn't know the Website uses Stripe as well. I've set uo an account but to complete I need a registration number. I googled it and I think Ireland may be different ( as always ). But I will definitely look into it more.

I'll also take on board the separate account as well. I want to have the foundations right (or at least passable) before hitting the ground and promoting/signing on vendors

 

[JesseDropIn]

To make payments you need a payment portal: PayPal, Stripe, Revolut, Wise, Visa and many others.

They all require you to create an account or make a payment with a credit/debit card.

It's easy to set up a site to do this. The complicated part is making sure I pay the correct vendor and the money gets transferred to their bank account. It's likely you would need some sort of FCA approval for this.

But a Dog Walker would need to invoice the client and the invoice would have their bank details. It takes me a couple of minutes to set up the payment on my phone.

Other vendor operating face to face can buy a sumup machine for a few pounds and do the transaction immediately. No need for the buyer to go to your site, create an account and make the payment.

So whilst this a great idea of yours, there are already a number of ways for people to take payment either online or in-person.

Yes it's the FCA approval part that I'd the problem. It wouldn't be when I go fully fledged company with it as I was have all the documentation. But for this pilot project I wanted the simplest way possible. PayPal is an avenue but not eveyrone would have it. Revolut is possibly the easiest as a lot people use it here.

 

[fisicx]

But for this pilot project I wanted the simplest way possible. PayPal is an avenue but not eveyrone would have it. Revolut is possibly the easiest as a lot people use it here.

But...

Why would anyone want to use your website to make a payment?

There are so many different ways for a vendor to accept payments both directly and online. All your website does is add another layer of complication.

Have you mapped out the customer journey? If it's any more complicated than tapping a card or making a bank transfer it's unlikely to get much traction.

 

[JesseDropIn]

But...

Why would anyone want to use your website to make a payment?

There are so many different ways for a vendor to accept payments both directly and online. All your website does is add another layer of complication.

Have you mapped out the customer journey? If it's any more complicated than tapping a card or making a bank transfer it's unlikely to get much traction.

When up and running fully I would be using the likes of Stripe and such.

As to why would they use it - convenience. The same way people use Just Eat. Why do they not go direct and pay to the local take away of chipper? It's another layer and middle man. And even costs more. The use it for ease and the convenience of having everything in on location I.e. app and website

 

[fisicx]

Don't use JustEat as your business model. It has a very specific niche (food delivery) and doesn't translate to your idea.

Just eat takes payment directly from the website. To do the same with stripe on your site makes it less convenient.

Your biggest problem will be convincing people to list their business on your website. It's been tried many times before and without a huge marketing budget will never gain sufficient traction to make it viable.

I'd put efforts into marketing the idea and see if you get any early adopters. You don't need to have the payment system set up, all you need to do is find out if people are interested.

 

[JesseDropIn]

Don't use JustEat as your business model. It has a very specific niche (food delivery) and doesn't translate to your idea.

Just eat takes payment directly from the website. To do the same with stripe on your site makes it less convenient.

Your biggest problem will be convincing people to list their business on your website. It's been tried many times before and without a huge marketing budget will never gain sufficient traction to make it viable.

I'd put efforts into marketing the idea and see if you get any early adopters. You don't need to have the payment system set up, all you need to do is find out if people are interested.

Thanks. I do get your point. And you are right. I do need to focus on the marketing and getting businesses signed up to the site. I guess I had run thru the process in my head and came across the stumbling block of "ok, they're interested. How do I get money to them with the least amount of hassle"

To clarify - dog walking isn't part of the business model at all and very much removed. I didn't exactly want to throw out the idea on the forum fully. But it fits the model similarly enough for the idea.

 

[MOIC]

The marketing and set up of this type of business is HUGE.

Just Eat for example 2023 profits (Loss):

A net loss of €1.8 billion with a revenue of €3.1 billion.

If your proof of concept works, which will take 1-2 years to prove, get investors in, you'll need them.

Good luck with your idea.

 

[fantheflames]

Hey Jesse, it's great to see you're taking the plunge with your idea!

Just a thought, but maybe you could start by gauging interest from potential vendors. Once you've got a few on board, you can work out the easiest payment method for everyone involved? Look at the customer journey. What would be the easiest?

Starting small with a proof of concept is definitely the way to go. Sometimes, just having those initial conversations can open up new ideas you hadn't considered.

 

[JesseDropIn]

Thanks for advice and yes I think that will be the next step along with the marketing side. I've been in technical sales for 12 years so this should be the "easy" part - why does is seem to daunting

 

[fantheflames]

Because it's a new area for you and a project that's been on your mind for some time. It's good to get other people's perspectives and even advice from friends or family that have some experience also. You'll get there! Have faith in your abilities