Online payment systems 2013 City Library Manchester

Copyright Sparta Technologies 2013 t/a SpartaPay

Zulf ChoudharyDirector

Supported By

E-Commerce Made Easy


Content

1. About Us

2. What is e-commerce?

3. Whys is it critical?

4. Basics

5. Factors to consider

6. Risk based costs

7. M-commerce

8. Solutions to suit you

9. PSP’s

10. The right software

11. Summary

12. Appendix List


We create bespoke mobile and web platforms

Software outsourcing and social banking for over 10 years

Social engagement and inclusion specialism

We are a spin out from The University of Manchester

Staff with IT backgrounds from private to public sector

Good knowledge base at the Manchester University

Voted best EU

IT Project 2007

About us


Electronic commerce, commonly known as e-commerce or eCommerce, or m-commerce, consists of the buying and selling over electronic systems such as the internet and other electronic networks or channels.

Online Examples:

1. Amazon-book store2. Dell-computer systems3. EBay-exchange market place4. PayPal-online payments5. Banks

Mobile Examples:

1. Catapult madness2. Angry Birds3. Paddy Power

What is e-commerce?


•http://www.ons.gov.uk/ons/dcp171778_289328.pdf

•** http://www.internetretailer.com/2013/01/22/uk-e-commerce-will-increase-12-2013

• E-commerce sales represented an increase of 19% of total turnover in 2011, up

from 18% in 2010.*

• In 2011, 81% of businesses had a website.

• Over half of businesses (56%) provided at least one member of staff with a

‘portable device’, such as a portable computer, smartphone or personal digital

assistant (PDA).

• In 2011, the estimated value of e-commerce sales was £483 billion.

• Sales via mobile devices representing 37% of our total online revenue.**

Why is it critical?

Internet changed buying behaviour: How, when, why

http://www.ons.gov.uk/ons/dcp171778_289328.pdf

http://www.internetretailer.com/2013/01/22/uk-e-commerce-will-increase-12-2013














http://www.digitalmusicnews.com/permalink/2013/20130206cannibalization

One example

25 billion songs downloaded by via iTunes by end of 2012


How online payment gateways work


Setting up a basic ecommerce system

4. Provide order forms or a shopping cart

3. Provide Security-HTTPS

1. Online merchant account

Payment Service

provider or PSP

Security providers

Banks

2. Ability to accept cards payments

What you need


Factors to consider


Example of costs

Set-up Recurring costs Transactional charges

Merchant account £200 £102% - 3.35% per credit card transaction

£0.25 - £0.35 per debit card transaction

NetBanx PSP £75 £10 from 1% to 6% per transaction

Worldpay £200 £360 (annual) 4.5% credit cards, £0.35 debit cards

Main costs are listed below but are not relevant to all products

• Setup Cost: ranges between £50 and £250, i£120 is the average.

• Annual Cost: normally around £150 but often not applicable.

• Monthly: The most standard charge especially from acquiring banks, around £10-25 pm.

• PSP: Can be a commission of as little as 1% but often about £10 per month or 3-4%.

• Transaction Charge: 2.79% for an established business but up to 4-7% otherwise.

• Bond: dependant on exposure level but is often negotiated down.

• Charge-back £7 to £29 for each item

• Mobile Payments fees 5% to 30% per transaction

Costs, excluding website expensive


Risk exposure is what the acquiring bank estimate of the total risk you are

exposed to at any one time; for instance, the number of sales open to

refund over a given period.

Your exposure level will also affect the charge bands offered by banks to

your business, i.e. monthly fees and transaction charges.

What is exposure to risk?


A bank looks at their exposure to risks to you and your customers before

agreeing to give you a online account. Why?

• Fraud and charge backs = cost of doing online business with you.

• Charge-backs, when a customer demands a refund from their credit card

company.

• Banks protect themselves against charge-backs by retaining customer

payments for a time before crediting your account.

• Internet transactions can be prone to fraud.

• You may need to lodge a bond to cover yourself against fraud.

• Good terms and conditions on your website will help.

In perspective: Fraud represents only 15 to 30 minutes of loss in a full year of trading for many banks. So why concerned?- Brand Reputations

Charges based on risk


Collecting Payments via mobiles-just a summary

Has its own risks

• Mobile provider gateways and shopping malls -iTunes, OVI etc

• Reverse Billing-cost to your mobile account-BT

• Mobile banking-Banks

• eticketing via SMS, concerts, travel etc.

• Premium rate lines- adults, gambling- all telecom companies

• Mobile Payments fees 15% to 30% per transaction to app store

Why?

• Convenience

• Simplicity

• Direct into hand

M-commerce


This depends on a number of factors:

• Customer segment

• Your product

• Buyer behaviour

• Bank charges and costs

• How traffic is driven by your marketing

• How to get them to pay?

Source: http://www.iabuk.net/en/1/iabknowledgebankaudiencefactsandfigures.html*http://www.atelier.net/articles/juniper-mobile-application-market-worth-25b-2014

The secret: know your customers!!!

Solutions suited for you

http://www.iabuk.net/en/1/iabknowledgebankaudiencefactsandfigures.html


The right PSP?

Pay


Your choice

• Based on your website software

• Research your market

• Costs per transaction plus charges consideration

• Your business model

• Legal issues

• Being in control

• Your budget

The key is : Do your homework


The right software 1

A. Open source platforms

Open source essentially means that the source code is open and freely available

to anyone under the terms of a General Public Licence (GPL).

This means developers can distribute, modify, integrate and customise the

software as long as the original developer is credited.

Open source is perfect for a start-up or small business, you can do it yourself.

Popular software for e-commerce platforms are:

• Joomla

• Wordpress

• Magneto

• Zen Cart etc

Issues: cost of hiring developers hourly or by the day



B. Software as a service (SaaS)/ licensed platforms

Software as a Service means you are renting use of the software rather than

owning it outright, often hosted online in the ‘cloud’.

SaaS platforms can be configured, designed and set-up to suit almost any business

(depending on the features available), however the difference is that third-party

developers do not have access to the source code and therefore cannot customise

it in the same way as open source.

The advantages of SaaS platforms are that by paying a relatively modest licence

fee, someone else takes responsibility

• Updates

• Security

• New features

Issues: dependent on the supplier building & releasing updates, costs going up etc.



Customised design

C. Bespoke- things to consider

Vouchers

Social media

NewsletterSearch & reviews

Market Place

Issues: your budget, expertise dependency

Ideal for bigger merchants expect

to pay between £3,000 to

£30,000 for basic.


Electronic commerce is about online selling, taking users to a place they feel

secure and happy to buy goods or service.

Many issues can trip the unwary but if you think rationally and positively you could

make millions.

Consider the following:

- Online and mobile channels (do not forget that TV, radio and newspapers all

depend on e-commerce of one type or another!)

- Map out the total user experience with you

- Look at your budget.

- Look at all the risks.

- Decide on payment gateway provider.

- Negotiate the best deal from your payment provider or bank.

- The set-up costs may been high and the work daunting but its worth it.

The market is worth over £120 billion by 2014!

Summary


Thank you

Telephone: 0161 306 5848

Email: [email protected]

Address: Spartapay

University of Manchester

Arch 29, PO Box 88

Sackville Street

Manchester M1 3NL

www.spartapay.co.uk

http://www.spartapay.co.uk/


Name Address

Buck.net http://bucks.net/

ePDQ Barclays bank http://www.barclaycard.co.uk/business/

Skrill http://www. Skrill.com/app/

Netbanx http://www1.netbanx.com/

NoChex http://www.nochex.com/

PayPal http://www.paypal.co.uk/uk

PayPoint http://www.paypoint.co.uk/

PO MoneyGram http://www.postoffice.co.uk/

Splash plastic card http://www.splashplastic.com/

Streamline http://www.streamline.com/

SecureTrading Merchant Account http://www.securetrading.com/

SecPay-owned by PayPoint http://www.paypoint.net/secpay-payment-gateway/

RBS WorldPay http://www.rbsworldpay.com/

Apple-mobile http://www.apple.com

Ovi Store-mobile https://store.ovi.com/

Icon-mobile http://www.iconmobile.com/start/

Source http://www.electronic-payments.co.uk/solutions/

This is not an exclusive list-please search the web for more providers

List of gateways or other types of service providers

Feb 2013

http://www.postoffice.co.uk/

http://www.securetrading.com/

http://www.apple.com/

http://www.iconmobile.com/


Free official help and advice

http://www.manchesterdda.com Digital help

http://www.go-on-manchester.com/ Digital help and advice

http://www.a2fnw.co.uk/ Access to grants and funding

https://www.gov.uk/business-finance-explained/investment-finance Business Finance explained

https://www.gov.uk/employment-contracts-and-conditions/overview Contracts

https://www.gov.uk/online-and-distance-selling-for-businesses Online selling rules

http://www.oft.gov.uk/business-advice/treating-customers-fairly/dshome/ More on online selling

http://www.manchesterdda.com/

http://www.go-on-manchester.com/





http://www.a2fnw.co.uk/

https://www.gov.uk/business-finance-explained/investment-finance







https://www.gov.uk/employment-contracts-and-conditions/overview







https://www.gov.uk/online-and-distance-selling-for-businesses











http://www.oft.gov.uk/business-advice/treating-customers-fairly/dshome/







Date post:	19-Oct-2014
Category:	Business
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