How to set up payment processing?

[Marc Roth]

Hi there, I am a newbie here, need some step-by-step explanation how I can set up Visa/Mastercard payment for our clients.

I have read quite a bit here about how to set up the different payment methods in VM, however, up to now I don't understand which payment class is favourable and what we require to sign up at authorize.net, paypal, etc. etc. I may have to add that we are a Hongkong company with HSBC bank account - but it would be okay if the payments would be collected "virtually" to be transfered in chunks later (so, no necessarily HSBC CPI).

authorize.net sounds good, but it says that one needs a "Internet Merchant Account". Where/how to get such an account for our company? (resellers on authorize.net only for US)

paypal seems to be bit of a headache (webforms to fill in?), but no merchant account needed, right?

What about all the other ones like 2checkout, eprocessingnetwork.com, worldpay, etc. etc. would any of these be suitable for us? (found a long list here: http://www.infomerchant.net/merchantaccounts/comparison.html, but apart from cost, which ones are technically feasible to implement?)

We are very thankful for any guidance!!!
Marc

[TwinStripe]

Hi Marc,

In answer to your question, you'll need a merchant account for the vast majority of these gateways in order to get the most from them. In most cases, provided you are a registered company in your region, you can apply for merchant accounts directly with the gateway you choose (they've usually got a link to the application somewhere within the site).

In other cases, they may have to set up a kind of 'virtual company', whereby they give you a registered company address within their region. This keeps the local banks and the credit card companies happy.

Some will only deal with 'local' companies, and that's that. Their choice though, and nothing you can really do about it.

The downside of a lot of gateways is when you reach a chargeback situation. If you're unfamiliar with these (as some readers of this post will be), this is when the credit card purchase is cancelled (for various reasons - fraud and when a customer withdraws the sale before they've received the goods are just two. The chargeback rules tend to vary a bit between companies). If this happens you can (and usually do) suffer some form of financial penalty. For example (and this is an extreme one), a friend of mine once sold a membership to a site he ran worth £5. The cardholder for the card that it was purchased on then disputed the payment, and he was forced to repay the original £5 to the credit issuer, plus a £10 chargeback fee from the credit issuer, PLUS a £10 administration fee to the gateway he used - his £5 sale cost him £25!!! If he'd bypassed the gateway, he could have at least only paid £15 - still a lot, but at least he didn't have to pay the gateway for doing virtually nothing, which leads me to my point....

If you have a good relationship with your bank and you're looking at fairly sizeable credit card sales, I'd suggest looking into dealing with the payment processor directly, either by using their API, or processing offline. If you setup a merchant account directly with your bank they may already have all the information you need. It may cost you more to setup, and there will be fees to pay, but you will reduce your losses from chargebacks considerably providing you can prove to their satisfaction that you do everything possible to avoid fraud and credit misuse.

If you'd rather avoid the (only slightly larger) initial costs, then use one of the 'international' payment gateways, but be prepared to apply to them for a merchant account which would take a little time to set up. How long it takes usually depends on how long your company's been running, and also on the amount of company information you can provide them. You'll need to read through their terms and conditions, and check out their fee schedules to work out which one is best for you - sorry, there's no quick and easy way to tell you which one's best, because every company is different. BE WARY THOUGH - check every last line of every page they link you to, and every mail they send you. Some of them charge you an absolute fortune without you knowing it until it's too late.

If all else fails, use PayPal. PayPal (to be perfectly frank) suck, but they're pretty easy accounts to setup and they're at least fairly honest about how much they're ripping you off for (sorry, I'm being jaded here), but then again they're one of the biggest for those very reasons!

As far as 'webforms' go, I take it you mean the ones that YOU have to fill in for the account? Well you'll have to do that with any of them!! If you mean for your customers, then that's a price you also have to pay - the more info you collect at point of sale, the better you can protect yourself against fraud.

The link you've posted is actually a pretty good resource - not really complete, but very informative. The advice it gives is good - weigh up what's best for you in the long run. See if you can setup a test site and a test (or sandbox) account with the ones you want to decide between. Try some test purchases with their test APIs and see which one feels best to work with. Work out how much a few test purchases would actually cost you in terms of charges, and decide which payment method really works for you. What works for one company, doesn't work for another - that's why there are so may options.

I'm in the UK, so I can't give you any firm recommendations, but then again I wouldn't advise you to accept any others either! In my experience, listen to all the nightmare stories.... and then choose the one that people moan about the least,  !

[Marc Roth]

TwinStripe,
thank you very much for your detailed inputs!! I will probably simply start with paypal, until I am ready (fulfill the requirements) for a HSBC-Merchant Account (to link to directly without external gateway). mr.