4. Career
• Programmer / Consultant
• Worked for IBM writing financial transaction
software
• Consultant integrating many different payment
systems
• Owner of a Digital Delivery Solution
• http://digitaldeliveryapp.com
• General enthusiast of Internet based
7. Reasons to take
payments online?
• Digitalise manual processes
• No need for ‘cashier’ personnel
• One less thing to do for small companies
• Automated
• Access to a national/global marketplace
• Your competitors probably are already!
8. Reasons not to take
payments online?
• Custom integration will be expensive
• Fraud
• Lack of opportunities to build rapport with
clients
• Rework of existing processes
9. Online transactions -
current state
• Merchants
• e.g. large shops
• Person-to-Person
• e.g. eBay
• Micro transactions
• e.g. tip jars, $5 e-products
10. Payment Systems
Merchant Banks
End-to-end solutions
Digital payment services
11. Merchant Banks
• Ability to charge credit/debit cards
• Funds deposited into an account after a
clearing period
• Charge a rate of 1-3.5% per transaction
• Cheapest approach for high volume
• Most banks offer merchant accounts
12. Merchant Banks
• Can be fully integrated into checkout
• Difficult to setup - especially for new
businesses that only trade online
• T&Cs for online traders are less favourable
• e.g. liable for chargebacks in more situations,
longer settlement periods, and less preferable
rates
• Banks don’t get online like they do offline
13. Merchant Banks
• Requires integration to your site through a
gateway
• Performs instructions to charge customers card
and settle funds into your merchant account
• Gateways charge from 9p-20p per transaction
• Most complex to integrate with your site
of all the payment approaches => most
expensive to setup
14. Merchant Banks
• Depending on integration may require PCI
compliance of some level
• International security standard stating how
sensitive customer data should be stored
• Requires servers locked down and regular scans
(although this is good practice anyway)
• Best avoided unless you know what you’re
doing!
16. Payment Systems
Merchant Banks
End-to-end solutions
Digital payment services
17. End-to-end Solutions
• Provider offers another service and handles
customer payment for you as part of their
main service
• e.g. Hosted shopping carts, Amazon shops
• Settlement is normally periodic
• Charges are often monthly plus a
transaction fee
• Most expensive of three options
18. End-to-end Solutions
• Easy to setup
• No need to handle sensitive customer data
• Can be up and running in an hour
• Normally completely hosted on providers
servers so no need for a website/shop
• Can be considered both good or bad
19. End-to-end Solutions
• Check T&Cs for refunds and chargebacks
• Beware of international exchange fees and
how to remove funds
• You normally end up locking yourself in.
Beware if you want to move at a later date
• Isn’t always easy to get existing customer data
out if do move
20. End-to-end Solutions
• e.g. Amazon
• They provide shop, charging and even fulfilment
• Fees are: 8-15% + $1-2
• e.g. Clickbank
• They provide e-product delivery and perform
charging. You host sales/marketing site:
• Fees are: 8.5% + $1
21. End-to-end Solutions
User Backend
Shop Shop’s Bank
(monthly transfer)
Company Bank
22. Payment Systems
Merchant Banks
End-to-end solutions
Digital payment services
23. Digital Payment Services
• Give access to a ‘virtual’ wallet
• Funds can be withdrawn to a bank account
or kept for use at a later date
• Charges are typically 3.4% + 0.20
• Seamlessly handle translation between
different currencies
24. Digital Payment Services
• Easy to setup
• No need to handle sensitive customer data
• Can be up and running quickly but no
automatic delivery of goods or backend
stock management systems
• Are presented as if an account is needed to
pay but that’s not the case
25. Digital Payment Services
• Are known for overzealous fraud systems
• Too much, too quick, or too many
complaints can lead to account freezes
• Watch out for fraudsters who claim
goods were never delivered
• always use a registered courier
• digital goods is pretty much impossible
to protect yourself against
26. Digital Payment Services
• Customer must leave your site to pay
• Difficult to setup but lots of modules exist
that can be used to integrate in with
standard store software
• Alternatively can be managed manually
where the merchant uses the email
notification to send out digital/physical
goods
27. Digital Payment Services
• e.g. PayPal
• the most widely used but also have a
small crowd who religiously avoid
• e.g. Google Checkout (now Google Wallet)
• newer but backed by big tech giant. Yet
to make a serious dent into PayPal’s
market share
30. How do you sell
online?
• Payment is only half the story. You also
need warehousing, stock management,
promotions, analytics and reports, the
ability to issue refunds...
• Easily avoided if you’re selling less than a few
items each week
• Automation quickly becomes necessary after a
certain point in order to scale
31. How do you sell
online?
• It’s normal to have software that the
payment processor integrates with
(merchant banks and payment gateways) to
manage the day-to-day processes of selling
online
• This varies between selling tangible goods
and digital items so we’ll look at each in
turn
32. Selling Tangible Goods
• Procedures well established and normally
just a virtualisation of these
• Some very advanced systems that can suit
any scale on online shop
• e.g. Shopify, Magneto, 1ShoppingCart...
33. Selling Tangible Goods
• Software creates shop for you and
integrates with your payment provider of
choice
• There are limitations though so make sure your
chosen merchant bank or payment gateway is
supported
• Some solutions can handle the hosting and
domain registration as well
34. Selling Tangible Goods
• Most charge a monthly fee, starting at
$100/month
• Due to price/complexity not so well suited
to small online merchants
• As with payment gateways be sure to check
you can get your data out if you decide to
move at a later date
36. Selling Digital Goods
• Digital differs from tangible in that:
• No stock management is required
• Delivery of digital items can be instant once
payment has cleared
• No costs or effort to sell extra items - all effort/
time is in creating the original item
• e.g. Digital Delivery App, e-junkie, Fetch App
37. Selling Digital Goods
• Tend to have a bit of HTML code that you
copy to your site
• No software or hosting provided so you need
to create your own shop
• Can often be used to sell simple tangible
goods as well
• Again be careful which payment gateways
your chosen solution integrates with
38. Selling Digital Goods
• Prices start at $9/month up
• Various options on whether:
• you host your files or not
• protection of files
• affiliate system included or not
• ability to customise to your brand...
39. Selling Digital Goods
User Backend
Payment Service Company Bank
Digital Delivery
Your Site
Solution
(email)
