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f you have ever purchased some goods or services online, even a cup and saucer from eBay then you have used an e-payment system. If you accept card payment for goods and services online, via the telephone or over the counter then you are already using an e-payment system.
An e-payment system provides the mechanism that accepts a credit or debit card from a customer and validates it to ensure that it is hasn't been stolen, that it is current and the amount to be paid is met by available funds. The payment system then deducts a commission and places the remainder into an account for you. Either at a scheduled point or by manual instruction, the balance is transferred to your business account.
An e-payment system is managed by a Payment Service Provider of which there are many. Most High Street banks have their own but you needn't use the one provided by your own bank. The most popular third party Payment Service Provider is, by a large margin, PayPal. PayPal is the ideal choice particularly if you are taking your first steps into e-commerce. At the basic level (adequate for most small businesses) there are no start up or regular fixed fee costs. The service is funded from the commission arising from sales.
With so many Payment Service Providers on the market, we have included a short list, together with links, in Tex Spex.
Click on any Tex Spex heading to get more information.
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TEX SPEX
E-Payment Systems.
IS A PAYMENT SERVICE DIFFICULT TO SET UP?
It can be a bit fiddly at times because you are setting up a new banking facility and, if you have tried setting up a new bank account recently, then you would have experienced the aggravation at first hand.
Most forms to be completed include unhelpful questions such as "Expected Turnover". This isn't really a question that a new online business pwner can answer as so much depends on other imponderables such as the web site, the search engine position, supportive advertising etc. However, don't worry, we can help you complete the forms.
And with some Payment Service Providers such as PayPal, everything is done online which means much of it can be set up by us leaving you to complete a couple of boxes and, most importantly, to change the password.
IS IT EXPENSIVE?
Most Payment Service Providers will require an Internet Merchant Account to be set up. This will often incur a one time set up charge of between £100 and £400.
The service will also incur a charge of between £15 and £35 per month.
These costs can be offset by lower transaction charges and many Internet Merchant Account providers are receptive to accepting a lower charge.
Over and above these costs are the Payment Service Providers costs and these tend to be as follows:
- Set Up Fee.
Ranging from £0 to around £250.
- Monthly Charge
Ranging from £0 to around £35 per month.
- Transaction Charge
Ranging from 0% to around 4%.
Some Payment Service Providers work on the net amount of funds i.e. after the credit card provider has taken their commission.
In total, depending on your transaction level, the sum of all deductions can result in as much as 6% in charges. This has to be taken into account when determinning your online price though recognising that much of the online business will be new business from outside your local area.
With such a wide range of charges, it is important to understand how E-Payment systems work in detail. When you are ready to move into e-commerce then contact us and we will advise and help you.
IS IT SECURE?
In short, YES. An e-payment system is essentially a banking system and they are just about as secure as can be.
HOW DOES MY WEB SITE CONNECT TO A PAYMENT SERVICE?
This would usually be incorporated by your web designer. There are three options:
- If you use a major e-commerce product then the ability to incorporate many of the major payment services,
- If your web site is not based on one of several major e-commerce products then there are a number of third party shopping carts that can be incorporated into your bespoke web site.
- A shopping cart and links to a payment service can be created specifically to meet your requirements.
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