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28/09/08 Irish Web Application: Which Payment System?
DUBLIN, IRELAND - As I move ever closer to my first paying customer I need to implement an online payment system.
As the ‘Basecamp for Danger’ (more on that later), I’d like to implement a payment system similar to 37Signals (read this great post). Monthly subscriptions with easy money back, vouchers, offers, etc. all automated. I’ve worked with Realex before, but only their online terminal and single transaction processing.
What other options are there for an Irish business who wants to do this…
- Roll our own payment processing engine. Where we control customer experience, exact emails, account freezing choice, etc. Run a nightly payment check.
- Not store any credit card numbers, keep them at the payment gateway and interact with tokens only.
- Have the freedom to put through larger single transactions manually.
- Take multiple currencies.
- Easily and cheaply transfer the money to our own AIB Euro Business bank account.
?
-Robin.
(Image Credit: I took this photo from inside Alcatraz Prison looking back out at San Francisco. Prison is a place where I don’t want to end back up with this payment processing system!)
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Tags: 37signals, basecamp, credit cards, Financial Services, Merchant Services, payment
22 Comments
Realex has never left us down
we recently moved to verified by visa for total security, very happy with them, very reassuring to have the guys at the end of the phone in Dublin
Paul Campbell is the man with answers to all your questions. I’ll ask him to chip-in here. We’re in the middle of developing the billing system for Exceptional at the moment.
JUST what I need Eoghan. nice one.
Better than that, I’ll drop in as promised! What are you up to on Tuesday?
I moderated a session a few months back with 14 Irish e-tailers. Apart from a few on Paypal and I think 1 on Worldpay, everyone else was on Realex and only had good things to say about them.
Hi Robin.
Dunno what level of business you expect to do in the early stages but the Payment Gateway & Merchant Services/Bank option is expensive until you get volume going. Between merchant services terminal rental, minimun Monthly Adjustments and Payment Gateway charges it is easy to spend a lot of money while not getting any/much in. PayPal is not ideal from a seamless customer point of view and is more expensive over time, but it is very cash flow benign as you have no set up charges, pay per transaction, don’t pay to transfer funds to your bank, allows you to e mail payment requests to customers etc. No idea if it would suit you but worth comparing to the other options and also might be a good initial solution to give you time to get to know what you actually need. Also, once set up it stays live so it is a great back up to another system.
Been using WorldPay, 2CheckOut and Paypal for the last 6 years. Each have their plusses and minusses.
We are just putting the finishing touches on the PutPlace billing system. We looked at several before settling on Paypal.
1. Do it yourself with Realex and your own Merchant Account : A real pain in the ass with transactions fees at every stage and very little support for problems in the train of processors (if realex or the banks screw up, unravelling the transaction can be painful). Also setting all this stuff up takes about a bazillion years and you still need to write a billing system.
2. Use a dedicated Payments Engine (LeCayla or Aria) : This removes the complexity of writing a billing system, but adds another layer of integration. Time consuming and error prone. Add another bazillion years.
3. Paypal : Simple API, trusted brand, handles every part of the transaction. Gives you a web interface to your complete transaction history along with automated emails for each transaction. Web UI allows issuing of refunds and viewing of complete transaction history. Does multi-currency and recurring billing. Can transfer funds directly into your Irish bank account and no merchant account or credit card processing required.
Guess which one PutPlace chose?
I disagree with Joe that RealEx is that much hassle from the integration side —in fact, it’s probably easier to integrate with RealEx since you can process everything your end and the XML response is a direct one.
Using Paypal’s IPN during development, you’ll need to expose your development machine as a webserver to test it, or upload and test, which is a pain in the behind
RealEx hassle comes in two forms:
1) Upfront fees. Look to put down in and around €300 between getting the bank and RealEx account set up. (ask for startup deals and keep pushing to get them) then it’s a minimum of €49 per month (for 100 transactions I believe)
2) Merchant service account setup (you need to get set up as a merchant to accept credit cards, then you need an internet merchant number … both require risk assessment by the bank) The bank will have a hernia when they hear you’re taking subscriptions, so there’s more hassle getting merchant services approval. Again, you’ll have to push to get it, you may need to go with Paypal for a while to prove your revenue etc.
Then there’s fees. With Paypal you pay 3.5% + €0.35 per transaction. With a good deal, RealEx + bank should start to beat this after a good threshold. Look to pay about 2.7% to the bank (on business cards, 2% on personal). Averaged at 2.5% + the €0.49, the more money you make, the more you save with RealEx.
There are plenty of other merchant gateway services out there (the only way to go vs. Paypal … if you can’t do behind the scenes processing, then Paypal pretty much beat every alternative, eg. Worldpay* ) … but I don’t think many of them beat RealEx for value (it’s great value … they go all the way down to about €0.05 per transaction if you do enough business) …
* Worldpay—their ‘hosted’ checkout is just as obtrusive as Paypal’s and their fees are high. Not to mention that they pay you a month in arrears. Even Paypal beats this. They promise withdrawal to a bank account within 5 days, but I’ve often got remittance within 3.
Go forth and earn!
Hi Joe.
I have just started to use PutPlace. Great/practical storage service so presume the choice of PayPal is equally practical. To be honest I haven’t seen PayPal work in conjunction with my site (I currently use it from the PayPAl site) as it is not live yet; how does it look/feel etc when integrated?
No-one’s mentioned protx yet. I’ve worked with them a long time ago, and the main advantage was a flat rate monthly fee with no transaction charges. You need a merchant bank account, but on their small business service, you get 1000 transactions a quarter for £20 per month, as well as access to their terminal for non-website payments. From memory, pretty good developer documentation for integration as well.
You’ll want to check your transaction volume and whether your other constraints can work with them, but it’s another idea to throw in the pot :)
On the Merchant Services Account; I used BoI/Elavon until a week or so ago. They charge a minimum transaction fee of €30.00 which goes against your usage and a terminal rental of €20.57 - €50.57 before you do any business (not sure of cost if you don’t need a trminal.)
On setup; presume will be done throuhg your bank. I did it as part of the start up package (free banking etc) and got it for 200 instead of €300. I did have to push the point with the guy who actually set me up. Lets just say that I won’t be recommending them; no e mail customer service, cancellation needed a fax & phone call, one months notice to cancel etc. Also, my middle man (!) wasn’t impressed with his conacts with them.
I looked at the numbers RealEx & Elavon v PayPal and it is easy to compare actual cost per transaction and see the point at which one becomes cheaper/dearer.
Beam me up Scotty - work to do :-)
Paul,
RealEx is a credit card processor, PayPal is a a payments system. Lets not confuse the two.
RealEx takes a credit card no, an amount and an address and CCV number and gives you back a paid or failed code. End of story. So to bake in billing notification, refunds, transaction history, changes in price plans, new price plans, recurring billing is a huge pain in the butt.
PayPal does all this for you and in the challenge to get billing quickly PayPal ticks all the boxes. The whole “cheaper for large numbers of transactions” conversation is a red herring in this discussion. When you have that many transactions you have a whole different host of problems one of which is maximising your gross margin.
The game here is who gets over the start line first and PayPal is definitely a contender in this space. RealEx doesn’t figure unless you like writing billing systems for a living.
Joe.
The choice can be boiled down between a traditional payment processor (e.g. Worldpay, Protx and Realex who are v.good) or PayPal. Former are b2b solutions that liase with your bank to process payments. PayPal does that but also offer the PayPal consumer float as a payment option. 15 million PayPal accounts in UK so not to be sniffed at. Their merchant offering is now greatly improved as they do not require your customers to sign up to PayPal to pay. Pricing not really an issue as volumes secure significant discounts with either route.
IMHO the PayPal brand recognition can only help & thus would lean in that direction for start-ups but N.B. (att: Joe) players like Realex do support repeat billing. trans history etc. and do that very well + if your biz is direct debit focused vs. card payment. they are a zillion times cheaper.
We went with Paypal for Toddle.com. It seemed like a no brainer for starting off with no set up costs and the easy web UI. Users do not seem to have any problem with is so far and we have processed €6 up to €995 at a time.
Just to add, the designer in me wants the payment path to look more seemless but from a business point of view it works and allows us to focus on making the product better. When Toddle is generating more revenue we will look at it again but for now it works.
What problems have we had with PayPal?
1. Recurring payments require that the user have a PayPal account
2. The PayPal site does debrand your offering when it comes to billing
3. Money from PayPal must be manually swept into your account
4. The account must be backed by a PayPal verified credit card
5. The test environment (sandbox) can be a bit painful to use
Joe,—
It’s easy to see the consensus view: Paypal is so well recognised and trusted these days, and so easy to integrate, it’s the obvious choice to get up and running quickly.
My personal view is that the seamless customer experience that Alan is talking about is the winning one, but I think Paypal should be offered as an option in that case (as a customer, I always choose Paypal over credit card)
In terms of hassle:
billing notification - more hassle to roll your own, but ultimately, I’d rather I had control over the email customers receive.
refunds - covered equally by Paypal / RealEx, both manual and automatic support in both
transaction history - covered equally
changes in price plans - moot point, surely? I’d argue that RealEx is more elegant, as you control the price for recurring payments
new price plans
recurring billing - I think RealEx do have an automatic recurring billing solution, but they also have a very nice setup where you can control the amount and the interval on the fly …
In essence, a proper RealEx setup is always going to be far more elegant than the equivalent Paypal one, but at the start, it’s far more pragmatic to go with the big P.
Do Realex allow you to set up/change recurring billing without application storing credit card details?
It would be nice if there was more competition in Ireland. Realex are far behind what’s on offer westside, Braintree (http://www.braintreepaymentsolutions.com/) for example.
If you can stomach storing credit card info long term - then Realex’s bulk payments might be the ticket! you could even get going doing a once monthly manual upload of payments schedule.
If Realex are listening - open up, let everyone see your documentation - Developers don’t want to download Brochures: put documentation (and a sandbox) in your Developers area instead.
29/09/08 Gerry Hanratty
Robin, you can contact me at Realex to go through your options. We do have offer the option to charge on a recurring basis without you storing card numbers. You can also manually process large transactions in multiple currencies (at no additional cost!), these funds will then settle directly to your AIB merchant account on a daily basis.
I recommend going for your own billing system and integration with Realex is easy. (Depending on your application, proposed billing process etc.). Gives you the best control over the entire process.
Big fan of 37Signals and we basically copied their billing system tweaking it to suit our needs for bookmeetingroom.com.
I can recommend Realex. Obviously all Payment Gateway providers have their quirks, pluses and minuses. I have found Realex to be reliable, contactable and helpful over and above what we have experience with other providers.
Getting a merchant account seems fairly painless these days. I just set one up with AIBMS last week (for Mortgagesandloansireland.ie) no hassles aside from some initial form filling. Costs from Realex are reasonable when compared against some of the other providers and when you get up and running (revenue lines established) it should be an insignificant cost. remember the €49 monthly fee includes 100 transactions.
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