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Shopping cart and payment gateways demystified!

Claude SaulnierA blog post by Claude Saulnier - Wandsoft CEO

13th April 2016 

Is selling on-line a problem for you and your business? Let's explore what you need to consider:

  • The shopping cart: how the client will tell you what they want to buy;
  • The payment gateway: how the client will pay you.

Shopping cart

You need a shopping cart to present your product / service offering and ease your clients life to buy from your company. For brand integrity, the design needs to be fully integrated with your main site and shouldn't take your client off your website.

A great shopping cart allows different types of products to be sold: Membership, Reservation, Tickets, Donations, Physical goods etc., with the ability to customise the look and feel of the page where the product is sold. Why, you may ask? Because you don't always know what your business will be tomorrow.

Without third party add-ons, the shopping cart will send a confirmation email to the client. From a branding point of view, the customisation of the order confirmation is important. A confirmation that is tailored to the product or service bought has a great impact: you do care for them. If the clients buys a ticket for an event, you don't want to send the same confirmation as you would for your grocery shopping.

Years back, a client of ours was selling courses and membership. The day the business owner wrote a book and decided to sell it on-line, we just added a new "Product line" called "book", set up delivery options and activated the ability to send the delivery notes to the publisher for shipping.

There is a possibility that the payment does not go through. A good shopping cart will store the order and will allow you to ring the client to check if they still want the goods.

No need to say that the cart needs to support VAT.

Ensure your shopping cart has a built-in back-office with accounting and bank reconciliation. You don't want to waste time handling emails and switching between many systems all the time. Also, with a built-in CRM, you will be able to prepare instant marketing campaigns based on clients' purchases and interests.

Payment gateways

Paypal logo

PayPal

PayPal has been around for years and provides a reassuring payment gateway. Their commission varies based on your turnover (sales).

Monthly Sales Price Per Transaction
€0.00 EUR - €2,500.00 EUR 3.4% + €0.35 EUR
€2,500.01 EUR - €10,000.00 EUR 2.9% + €0.35 EUR
€10,000.01 EUR - €50,000.00 EUR 2.7% + €0.35 EUR
€50,000.01 EUR - €100,000.00 EUR 2.4% + €0.35 EUR
> €100,000.00 EUR 1.9% + €0.35 EUR

Behind the scenes, from the client point of view, there is trust, and most cards are accepted. It has the notion of an account, so you don't need to retype your card number.

From a merchant point of view, what I don't like about PayPal is that they too strongly encourage you to register for their service. I have nothing against it, but for some people who want to pay with their card and go, it adds a cumbersome element.

PayPal test platform is complicated to say the least. Even for technically minded people, it is very complicated to put test transactions. It was designed a long time ago, and has not been revisited much.

PayPal is not my favourite if you primarily want to take credit card orders.

Stripe logo

Stripe

Stipe is newish to the market. Fees are much simpler than PayPal, and the client does not need to register. The client put their card details, pay and waits for you to ship the order.

Transaction Cost Type
1.4% + 25 cents European Cards, excluding VAT
2.9% + 25 cents Non- Euorpean Cards, excluding VAT

There is no setup or monthly fees. They will charge a percentage-based fee each time your customer uses a credit or debit card. All major cards are supported. They accept payments in 139 currencies with currency conversion rates a 2% atop of market exchange rates. There may be better rates if you sell over 30K per month as their site would suggest.

Once the payment is made by the client, money is transferred to your account within 7 days. This is important to remember from a business cash flow point of view.

From a technical point of view, Stripe hosts the page: all transactions are performed from their server. That removes the burden of having to comply with the Payment Card Industry standards established by Visa & MasterCard.

Stripe easily provides a test and a live set of security keys, so testing is very easy, and you can go live very easily when you are happy with the tests.

I believe that Stripe's offering is very smart, simple to set up, and you can start selling quickly. Ideal if you are in early days selling on-line.

More here: stripe.com

Realex logo

Realex

If you are more serious and convinced of your e-commerce offering, talk to your bank, get a merchant account, then use the services of Realex Payments to process your on-line payments. Commission is reduced to 1-2% from the bank, and Realex's charge is less than 50c per transaction with a minimum of €29 per month. Your bank, eager to make more on nothing might charge you a monthly fee too. Supported cards will vary depending on your merchant agreement with your bank.

Transactions per month Cost
Up to 350  Transactions €29/month (flat fee)
Over 350  Transactions Additional €0.12 per transaction

Money is transferred to your bank account every night. It means that if you need to cancel a transaction, do it before midnight and no charge will occur to your account.

In that case, the bank is needed to provide a merchant contract (to allow you to take card payments) but as a lot of banks do not have their own on-line credit card processing facility, you need the addition of a card processing facility and this is where Realex comes to the rescue. There are Realex alternatives, but we enjoy working with them, so we're not going to make things more complicated.

Compared to PayPal or Stripe, the transaction fee can be reduced based on your monthly sales, and you can do some really cool stuff for recurring payments using Realex's Credit Card storage facility: RealVault.

The main problem is that many bank branches haven't got a clue about you setting up a merchant account to sell on-line, so you may need to be patient.

Your bank is likely to ask you to implement 3D Secure. It is a redirection to your bank page to provide authentication. It is in fact to operate a shift of liability should the card be eventually rejected. As the page is controlled by the bank, the authentication often fails, resulting in lost business. Our back-office stores an comprehensive audit trail, so you can rescue sales using Realex terminal.

Once you have the merchant account, I strongly recommend Realex Payments. Their product is good, fast, and their customer service is very good. In addition they are an Irish company, like us, so we are pleased to support our local economy.

If you have a regular flow of business online and if you want the money on your bank account the next day, then Realex and a merchant account are a fantastic combinations.

More here: realexpayments.ie

None

Depending on the products or services you sell, there is nothing wrong in simply sending your customer an invoice, with your bank details, and asking them to pay by bank transfer.

Other

Some countries such as France have "legacy" payment gateways. These gateways in most cases where established by the banks themselves, are horrible looking (very techy), hard to customise and I think must contribute to a lot of lost transactions.

MasterCard and Visa have recently brought in their own payment gateways, competing with their resellers. In my opinion, it has to do with the fear or losing market share with the emergence of SEPA.

Conclusion

To think about the next step, ask yourself the following questions:

  • How big is your business?
  • How big is your on-line market?
  • What is your technical expertise?
  • What is your marketing knowledge?
  • How long can you afford for the funds to be released?

I hope I have not put you off, and we look forward to helping you.

Wandsoft offers a shopping cart that can be customised. It supports Realex, Global Iris, Elavon, Stripe... It has a built in newsletter module with campaigning facility. All of this is fully integrated in the CRM platform. 

Finally, we believe in business integration and brand integrity as there is a proven return on investment.

(Originally posted on 13th January 2015. Updated on 13th April 2016)