Taking Payment Before Shipping Goods - Payment Gateways

[RobinB68]

Hello there,

I wondered if you could offer some advise.

Currently, our e-commerce is set up to settle payments on despatching goods. When the customer orders a product on the website, we send a pre-authorisation to our Payment Gateway, Global Payments. Then, when one of our warehouse agents despatches the order, we send a settle request to settle the authorisation and take the money. I understand why this is good practice, as we aren't taking payment for goods we haven't shipped yet.

However, we are going to implementing a new website in the next year on a completely different platform to our current website, and thus this system will have to be re-made . When we approached our new website designers with this requirement (taking payment on despatch) they were surprised and had never heard of anyone doing this. They said that all the Payment Gateways, with which they have worked, will take the money on order. We have also tried to implement SagePay before, and found that they, too, take the money on order.

The thing I'm struggling with is finding out what we actually need to do. If we are required to take payment at despatch due to regulations, how do these payment gateway services get away with taking money at the time of order? I cannot find through google searching a definitive place that specifies the requirement. The Distance Selling rules on the gov.uk website, from what I can see, don't mention anything about taking payment on despatch.

Can anyone point me in the right direction, at all?

Thank you very much!

 

[finleydesign]

Totally agree, it's an odd way to operate, just take the money. It's basically to do with two options within the card processing, so there is take payment or pre-authotise

Pre-authorise simply checks the money exists and puts a hold onto that amount

But that is so rare I don't think we have ever done this in 12 years!!!

Just take the payment when they order, there is no law saying you only take it on despatch etc

 

[Red Wood]

Most gateways enable the pre auth function and you can essentially chose between pre auth or full payment as mentioned above. Barclaycard is one of the few gateways that offers everything in house, including what you require, and you simply switch between the two in the backend. Maybe consider them as they are competitive as they don't use any white label like many others.

Your webdesigner would simply integrate via their API and you control how the payment is processed directly via the Barclaycard platform, separate to what your webdesigner needs to do, giving you full, easy control.

 

[finleydesign]

I understand why this is good practice, as we aren't taking payment for goods we haven't shipped yet.

I think you must be the only company on the planet not taking payment for goods, it's not good practise at all to be fair, I don't see a single reason to why you don't take payment for goods, regardless of where the order is in it's cycle, just adding more steps to the whole process

Sell item, take money, ship goods

 

[Mr D]

The only place I use that pre-authorises now is amazon. They take the payment when goods sent.
Every other place I use takes payment at the time of ordering. Been pretty common a decade or more.

 

[finleydesign]

If we are required to take payment at despatch due to regulations

Sorry I keep reading things, where is this regulated? never heard of it!