Integrated Payment Services

A clear and independent guide to ecommerce integrated payment systems.

Integrated Payments: A Confusing Scene

The more cautious companies take a staged approach to integrated payment systems.

1. A start is a simple online catalogue, from which customers can order by telephone or email. The personal contact fosters confidence, and customers can check product details with a knowledgeable salesperson.

2. Then may come a website with page information automatically supplied from a linked database. The system ensures that stocks, prices and specifications remain up to date.

3. Only with online payment does ecommerce proper arrive, and even here there are sub-stages which companies commonly pass through:

3.a. Rather than process credit cards in realtime, e-merchants will take payment by one or more of these approaches:

• online checks.

• wallet systems.

• credit card details taken by encrypted email.

3.b. At the next stage enters the payment service provider, where the mix of options and misused terminology almost guarantees confusion. At their simplest, the options are:

1. an all-in ecommerce system supplied by the webhosting company.

2. a service bureau that handles all aspects of payment, sending customer details back to the e-merchant for order fulfillment.

3. a secure order form on the e-merchant's site, which transfers customer details via a payment gateway to a credit-card processing company.

4. an application programming interface on the e-merchant's server that allows more direct access to the merchant account, though still through a payment gateway.

The devil is in the details. These are the common complications:

• the all-in ecommerce hosting system may:

  • allow or not allow a range of shopping carts to be used.

  • allow or not allow e-merchants to find or use their own merchant accounts.

• some shopping cart programs are only sold through registered partners or hosting companies, which effectively makes their use an all-in ecommerce-hosting system.

• service bureaus differ widely in:

  • rates and terms applying

  • products they handle (content/physical goods, adult sites, etc.)

  • preferred turnovers (often unstated on their sites).

• secure order forms and application programming interfaces:

  • are often not properly distinguished in the service details, though they are very different in operation, obligations and costs.

  • may or may not require a co-located or dedicated server.

  • require a payment gateway which

    • works only with specified shopping carts and merchant accounts.

    • May or may not be supplied by the merchant account provider.

    • May link through a limited number of credit card processors and/or third-party security companies.

    • May or may not be capable of being added to your shopping cart without considerable programming expertise/cost.

• a merchant account may be unobtainable, throwing the e-merchant back on service bureaus or other stratagems.

The e-book explains these situations in detail, but summaries can be found by clicking on the links in the text above or the RH box. It's also worth remembering:

• some systems are still somewhat under development. They work, or we should not list them, but they can be a little rough round the edges. Expect some hassle in getting them to work, and in sorting out the odd dispute.

• we've not attempted to grade the systems as no real consensus exists. We have listed sites where users' findings are summarized, but our experience does not always coincide with these views. Nor have we tried every system.

• try to take the long view. If you're expecting millions yearly from your site, then take professional advice and pay for top-notch programmers to get the payment system working properly. If yours is a Mom and Pop site, however, then opt for a non-merchant account system that's cheap and cheerful. You'll pay more on a per transaction basis, but you can upgrade when sales increase. (Currently, in the UK, for example, some 50% of small firms pay for bespoke website design, 30% use out-of-the-box software, and 20% opt for an all-in ecommerce hosting solution.)

MicroPayments

If you're selling content, then the notion of charging something nominal for access to individual pages is very attractive. Ten cents a page on a popular site could provide a decent income, and be more than fair to customers.

Unfortunately, for all the talk and the systems floated, micropayments have yet to catch on properly. Two companies do provide services for high-volume, low-value transactions, however, and are listed on the appropriate resources page. Services approximating to micropayments are listed under electronic transfers, electronic checks and selling content without a merchant account.

The e-book provides more extensive listings on integrated payment systems generally.

 

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