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Advanced
How To Guides
Developing your first website
Appendix
1
Setting Up an Online Payments System
If
you are considering adding a payment facility onto your
website, then here's some practical advice that might
help smooth the process. These tips have been learnt
through the practical experience of implementing an
online payments system, so it's not a comprehensive
list - just some pointers to help you through the process;
- In
theory the process can take three weeks, in practice
it's likely to take a lot longer.
-
For a small site, you need to budget about €5,000
plus VAT in total for the three costs involved -
site build, software and banking charges - for Year
1
-
All costs are negotiable and expect to pay between
3% - 4.5% on each transaction to the bank.
-
Make sure the proposed software is acceptable to
your bank.
-
When you apply to the bank for a Merchant Account,
be sure your bank knows that you're an existing
customer.
-
If you do not have a good standing/credit record
with the bank, you could be asked to lodge a security
deposit to the tune of one month's transaction value.
The
Budget
These
costs are entirely indicative and will depend on the
choices you make. Also prices in the marketplace are
constantly changing so you'll need to do your own research
when you approach this issue.
The
breakdown on the total estimated budget of approx. €6,000
in Year 1 is as follows;
Software
Set-Up
€300 plus min. €50 per month € 900
Bank
3.5% per transaction (35 cents for laser cards)
plus €100 set-up fee
(we assumed that the 3.5% cost would be passed onto
the customer in price increases)
Web Development
Initial
Set-up €3,000
Updates for specific payment offers etc.€1,500
Contingency € 500
The
Process
The process is very simple - pick a software supplier
(we chose Realex), make sure the Bank accept the supplier,
apply to your bank for a merchant account and once this
is set up, get your web developer to update your site.
Timing
Realistically,
you need to leave about two months to implement this
process. This will cover about one month to set up a
merchant account and one month to liaise with the software
supplier and the web developer - and to test your site
before it goes live. Having said that, the process can
be done a lot more quickly if you're prepared to allow
a third party to collect your payments for you and if
you have a speedy developer to hand.
Banking
Commission
There
are a couple of things to watch out for when you go
to set up a merchant account. When you're negotiating
the Bank's commission rate, it is possible to reduce
this considerably through discussion. Typically commissions
would range from 3% - 4.5%. It's worth bringing this
issue up at the outset of the process and checking proposed
rates from each bank - as this information can be used
as a negotiation tool.
Merchant
Account Security Deposits
When negotiating commission levels, it is likely that
you may be asked what your estimated monthly value of
transactions is. If so, consider your answer carefully
- obviously the higher the value, the stronger your
negotiating position with the bank on commission rates.
However if the bank is not familiar with your company,
you could be asked to lodge the value of one month's
turnover as a security deposit. This is to cover potential
failed payments etc. However many would consider it
an excessive requirement. Throughout the process, ensure
that the Bank is aware of the fact that you are an existing
customer, where applicable. This can help to smooth
the process and you may avoid the Security deposit requirement.
Remember
that all of the costs involved - from the software supplier
through to the web developer will be negotiable - so
make the most of your skills of persuasion!
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