It’s all about the money – Getting paid online

On today’s show we discussed  the topic of getting paid online. Let’s say your website is operational, you’re getting traffic, or visitors to your website and they are ordering. So you need to get paid. Almost all transactions right now on the web are carried out using debit or credit cards, although over the next year we’ll see more credit-transfers, or direct payments from customer’s current accounts.

To process credit card payments online you need a payment system integrated with your website. If you want to process the payments yourself, you need a Merchant Bank Account, which is different to your business bank account. It’s an agreement that your bank  make with you allowing you to process customer’s credit cards. These are easier than in the past to get, but new or very small businesses often get refused, so talk to your payment processing company – drop them an email and they can advise you on the whether you’re likely to qualify for a Merchant Agreement and what alternatives they may be able to offer.

If you have a Merchant Agreement  you then need a payment gateway – or someone that processes the transaction for you. We spoke about two companies today, Realex and Irish based company and one of the most respected firms in this business, and SagePay, a product of the large accounting software firm, Sage. Both have irish operations and both have SME packages that start at around €30 a month. This €30 Euro get’s you an amount of transactions, when you process more than the included transactions (350 and 1,000 in the case of Realex and SagePay) they’ll charge you a fee per transaction, 12cents and 15 cents are the publsihed rates by Realex and SagePay.

For businesses dipping their toe, or who think that online may be a small part of their business, PayPal could be the ideal solution. PayPal allows you to accept credit cards on your website, without having a Merchant Agreement in place with a bank. PayPal also provides useful features like Pay By Mail – so you can issue invoices with a Pay Now button, you can handle subscription payments and a nice invesntory feature that monitors what you have in stock, versus what you’re selling – helping you keep tabs on your inventory.

You need to weigh up which is right for you – and that will be based on a number of factors like;

  • can you get a Merchant Account with a bank?
  • how many transactions do you expect to do every month?
  • what’s the average value of each transaction you will do online?
  • margin consideration – if you work to tight margins, it’s critical you factor in the transaction charge to your selling price

If you were to sell €1,000 Euro worth of goods a month online, in only a couple of transactions, PayPal can make sense for quite a while, given the absence of any monthly fee, but if you sell €3,000 Euros a month in a few hundred small transactions, at tight margins, a service like Realex or SagePay begin will be more economical. Do the sums for yourself based on three or six months projections which will give you time to get some traction online – getting paid online isn’t difficult anymore, selling, as ever, remains the challenge.

External links

  1. See Realex SME products & Services
  2. SagePay Products & Information
  3. VIsit PayPal for Business
  4. Create a website today – try an innovative product like Squarespace free for 14 days
  5. Sum Up Card Reader for SMEs

Andy O'Donoghue

Andy O'Donoghue talks about technology, some say, too much.