Online Payment Systems
Does your business need to accept payments online? If so, read on!
Blueberry Consultants is an expert developer of custom online payment systems using payment providers like WorldPay, Paypal and Google Checkout.
Setting up an online store to sell physical goods has become very easy for small businesses – there are many off-the-shelf server products available which just need to be configured.
But these products tend to be quite focused on the shopping cart approach. If your business requirements don’t fit this model, most off-the-shelf systems won’t be suitable.
Common examples of such requirements include:
- Service-based businesses selling on a subscription model – e.g. a system like WebEx
- Businesses with special reseller and agent models that need to account for all sales made by such resellers/agents.
- Sites which sell digital properties (software, documents, music) which need a special licensing process.
In fact, most online businesses which are not specifically selling physical products will probably require some level of custom purchasing support.
Online Payment Providers
Once you’ve identified that your business needs an online payment system, what next? Surely you can get your web developer to integrate with online payment solutions, like WorldPay / PayPal / Google Checkout?
In fact, integration with these payment processors is not hugely complex, although it’s never quite as easy as the providers claim. The problem is that these services generally provide only the core function of processing the card payment, but real businesses need much more – online purchasing like any other sale needs to be integrated with the accounting function. In addition, online sales opens up other possibilities, such as international sales, which can complicate the accounting process.
A summary of the issues that companies face when integrating online payment provision is presented below – of course, we’re very happy to provide customers with advice on these issues.
Online Payment Integration - Issues to Consider
Which Provider to Use?
If you want to keep things simple, you can just use one payment provider. But services like PayPal, and now Google Checkout, can be seen as complementary to conventional credit card purchasing, and there are arguments to support these services in addition to standard credit cards. Another consideration is trust – some payment providers may be more or less trusted in some territories.
Payment provision can be completely integrated into a website, so the customer does not actually leave the site to enter the card details, or the website can send the user to the payment provider’s site. Which is the right approach depends on the size of the business, and trust perceptions by customers.
Which Credit Cards are Accepted?
Although payment providers claim to accept all cards, this is often not quite true. Accepting American Express often requires a direct agreement with Amex. Visa Purchasing cards (used in the USA by companies) are also often excluded by payment providers.
Accepting payments in multiple currencies is quite complex – in some cases, your bank may require additional accounts to be created to support this activity. Full multi-currency accounting packages are also expensive.
Credit card companies allow end customers to cancel a transaction, sometimes up to 6 months after it happens. Processing charge-backs from the payment provider is an administrative overhead.
The VAT treatment of the sale of digital services can be quite different from the sale of digital or physical products. When selling from the UK to Europe, companies must obtain the customer VAT number and check it in an online EU database.
Information from the online ordering system needs to be fully integrated into the company accounting system.
Most online purchasing systems need to send emails to customers to notify them of the progress of their order.
Invoices, Receipts, Purchase Orders
When selling to consumers, a simple e-mail receipt is often sufficient. In the business to business (B2B) market, customers expect to receive invoices electronically – and they also want credit notes if the order fails for some reason. Finally, many business or government customers expect to be able to pay by purchase order, which again requires a special interface in the payment system to allow a product to be sold without immediate payment.
Special Case – Online Software Sales
A special case of the online sales problem is the selling of downloadable software programs. This case has particular issues, such as the generation of licence keys and handling upgrade purchases. Because there are so many companies selling software online, there are specialist payment providers who service this market. These providers handle the credit-card payment, but also offer services such as multi-currency handling, licence key generation, affiliate programs etc. They usually charge a percentage of the transaction volume, perhaps 8-12%. One benefit of this approach is that they make a single monthly payment to the software developer, which makes the accounting much simpler. However, even the best of these firms may not provide a complete solution – as with any large system purchase, companies need to carefully review whether their requirements are completely met.
Case Study – Blueberry Software
Blueberry Software is a sister company of Blueberry Consultants, selling the popular BB FlashBack screen recorder worldwide. Over the past few years, Blueberry has developed the BB Software website into a sophisticated online payment system.
Our system supports:
- Customer Registration.
- Customer product selection, including quantity discounts and site licences.
- Discount coupons at point of sale.
- Order progress E-mail communication to customers.
- Licence key generation and validation.
- Electronic invoice / receipt delivery in PDF, plus credit note support.
- Multi-currency support.
- Full VAT handling at point of purchase.
- Credit card purchasing via paypal and Worldpay.
- Integration of both sales and payment reports into Sage, for semi-automatic reconciliation.
- Reseller management, including monthly invoicing.
- Generation of tagged software builds for marketing purposes and resellers.
- A full back-end admin system for managing customers, licences, resellers and generating stats reports.
Effectively, this is a complete software system for running an online software sales business.
Note – this system is a custom development for Blueberry Software, but it could be adapted for use by another company relatively quickly. If you are interested in online payment systems, please get in touch.