Taking payments online in Europe in 2013

http://jamesmaskell.co.uk/2013/online-payments-in-2013/

by jmaskell • 14 years ago

264 181 14 years ago

jamesmaskell.co.uk

PanMan• 14 years ago

Anybody used Paymill yet? Their docs all look fairly straightforward, and I'm strongly considering them for a project, but I'm interested in the experience of others.

dewey4• 14 years ago

Yep, we are using it and never had a problem so far. I encountered one bug in the Magento Extension but they fixed it in a few days.

nulluk2• 14 years ago

We applied and simply got a rejection email with little to no explanation of why we got rejected which is disappointing. I'm going to try and open up communications with them again to see if we can reapply now that we are fully trading (unfortunately through paypal)

  The evaluation of new applications in order to accept credit card payments is subject
  to strict compliance rules and risk regulations in Germany. Our current acquiring 
  bank has declined your contract for some reasons with regard to their risk and compliance 
  management guidelines. We do not receive any detailed reasons from the bank.
  This is why we cannot give you a better explanation. Unfortunately, 
  Paymill does not have an influence on that decision.

Kliment2• 14 years ago

I've been using it since September with zero problems so far. They answer their phones, which is more than I can say about anyone else in this space. I wrote a python wrapper for their API as well. Everything's been smooth. If you have any issues with them, call them, and in my experience things get fixed instantly.

timnash4• 14 years ago

We began to look at them, unfortunately while the API was straight forward the documentation was simply wrong in many places and contradictory which was a tad frustrating. The biggest issue for us was they simply couldn't answer even the most basic question like their current PCI-DSS status, information about their network or datacentre setup (or even where it was hosted) in effect we couldn't complete any PCI-DSS assessment docs. Needless to say, we simply did not feel confident handing over our companies account and other details they were asking to go live with. Let alone let them handle our payments. This was a few months ago, and they were having teething issues which may have now been resolved I suspect given how common such questions should be they now have the answers in place we may well relook at them in a couple of years time if they are still in the marketplace.

flippingbits• 14 years ago

I'm using it and I wrote the Ruby wrapper (https://github.com/dkd/paymill-ruby).

I like their service and they're nice guys.

slash-dot• 14 years ago

We will be using Paymill for our upcoming project. We haven't yet gone live, but the api was very easy to use and it seems to work very well. One downside for us is that they only accept Visas and Mastercards.

dewey4• 14 years ago

Interesting article. We are using Paymill and it's very easy to use (official extensions for Magento and other eCommerce systems). Our old payment provider was a pain to work with (uploading excel tables to process the payments...).

nulluk2• 14 years ago

Does the official extension do everything you require? We have actually just released a magento extension for Stripe and were looking at porting it over to Paymill but after some research figured out they had an official open source once so we are trying to determine if it's still going to be worth the time investment.

dewey4• 14 years ago

Yes, we are just running a small store though so I don't really have a lot of special requirements.

drcongo2• 14 years ago

Thanks for this. As much as I'm loathe to use Paymill, it feels like a decent option from the few available until Stripe comes over here.

davedx2• 14 years ago

Why are you loathe to use them?

nhangen2• 14 years ago

Because it's a company founded by the Samwer brothers. A simple Google search of that name will tell you all you need to know.

petercooper6• 14 years ago

I'm in talks with one of the others on that list because I need Amex support.. but in the UK PayPal also do a tier called "Website Payments Pro". It's not the same as a vanilla PayPal account and includes a merchant account and API for doing card transactions. You have to go through screening to be accepted and I've found them to be very professional and helpful (as in, a far better service than the vanilla PayPal service). Only downside so far for me? No Amex.

nodata• 14 years ago

Who is using Amex? Corporates?

freyfogle• 14 years ago

rich people

talkingquickly• 14 years ago

I think that's a big part of it, particularly if you're trying for the procurement "loophole" which allows low to mid level employees to authorise spend of up to a certain level without going full a full blown procurement cycle.

A lot of the big firms (in the UK at least) will use Corporate AMEX charge cards (rather than credit cards) for this purpose. If they can't pay on their Corporate AMEX they'll often have to go through a more drawn out process to get the payment made by some other method unless they want to make it on a personal card and then claim it back.

timnash4• 14 years ago

Where possible I will use AMEX for all my personal transactions mainly as I have a longer interest free period on spends making budgeting easier, also while its a pure perception thing the few times I have had the need for a chargeback or had a problem with my card its been resolved in minutes.

Of course as a merchant it's higher fees, has weird conditions attached to it and virtually all AMEX users have another credit card (indeed Amex provide me with a visa card for when I can't use my amex) so there is little benefit to supporting amex.

smiler• 14 years ago

Corporate clients and people with plenty of disposable income - i.e. good people to have as paying customers!

josephlord• 14 years ago

I strongly prefer Amex because the consumer bonus is better for me at least and even more importantly it doesn't take me through the Verified by VISA liability shift/security nightmare.*

* Verified by VISA with my VISA card redirects to a third party domain (not the retailer or my bank) which then asks for DOB and very basic details to set a password (and little more is needed to reset the password). Even if fundamentally secure the user education message of this process is awful. I believe that some card providers make better use and of Verified by VISA mechanisms but not all.

petercooper6• 14 years ago

In my experience, a lot of people who work in large companies who have authorization to spend decent money do. They can often get hold of a Visa or Mastercard instead but it seems to be more hassle to get authorized by a higher-up.

Personally, I have an Amex too and I'm not rich or special but maybe it's different in the UK. I use it because I get a ton of airmiles and Amex never seems to get rejected or stopped for fraud checking purposes.

jamesjgill2• 14 years ago

I can't wait for Stripe to get over here - fingers crossed this will happen soon. And from what I'm hearing, it may not be too far off. We've integrated with Recurly (with Sagepay as our gateway) for our recurring subscriptions at GoSquared, but the experience has been one I would hate to endure again. Thanks for sharing your experience James!

webignition2• 14 years ago

What are you hearing that suggests Stripe may not be too far off?

I'll soon be in the process of adding payment options to a new UK-based startup and really really really want to believe that Stripe will be an option for me in time.

jamesjgill2• 14 years ago

I wasn't expecting this response, as I had heard from other sources previously that their best bet for UK / European expansion would be to buy out someone else, but I can't really argue with this: https://twitter.com/cjc/status/292350613939953666

timnash4• 14 years ago

Their have been rumours and hints and lots of "soons", that said even if they do launch in the UK you may want to wait a few months for them to solve their teething issues.

Braintree which have an amazing reputation in the US, when they launched in Europe did so with their support still in the US, prices on demand and with paperwork requirement not even a bank would ask for to be emailed to them. Other then the support and pricing the other bits were sorted out quite quickly but for the initial customers the setup and initial period was a little choppy.

That said now I would wholeheartedly recommend Braintree in the UK based on a couple of clients more recent feedback. I suspect when Stripe launches a similar scenario will occur, so for them other then regulatory issues, I suspect the biggest issue is getting the support infrastructure in place, trained and modifying their processes to deal with different regs, as much as getting approvals and bank backing.

obeattie2• 14 years ago

We recently switched to Braintree from PayPal Payments Pro. While we're not "small," (>£10million/year) the process was largely painless and I can't recommend them enough. We also needed to take AMEX cards and found setting that account up extremely easy (though we already had an AMEX account).

The only thing that does seem slightly annoying is all their support and accounts people are in Chicago, meaning the inevitable back-and-forth can drag on for way longer than it should for merchants based in Europe. Hopefully this is something they will get ironed out once they have some significant traction in the EU.

davedx2• 14 years ago

That's one thing I like about Paymill, from an initial impression. They're in Germany, so I'm in the same timezone. I just had a small email exchange today and it was nice knowing they could response so quickly.

jusben13699• 14 years ago

Did PayPal give you back or help you transfer over your stored customer credit cards?

obeattie2• 14 years ago

Nope. We operate primarily on a recurring subscription basis, so we're just having to maintain backwards-compatibility for those customers currently on PayPal.

To be honest, PayPal could not have been less helpful at any step of the process, both before we were wanting to switch and during the process. They're a total nightmare of a company to deal with.

lflux• 14 years ago

Paypal is actually a regulated bank - it's registered in Luxembourg so it can do business in EU.

pfortuny• 14 years ago

Thanks for posting this, it is really useful and detailed. The hassle of trying to work this out in Europe with a bank is really absurd.

chmike2• 14 years ago

Paymill is germany only.

eps• 14 years ago

No, it's not.

dewey4• 14 years ago

No it's not. I know for a fact that it's working in Austria and afaik they rolled out support for some other european countries too.

chmike2• 14 years ago

why the downvote ? My comment was based on what is written in the grey box on top of this page https://www.paymill.com/fr-fr/documentation-3/introduction/b...

You should consider that direct debit as a payment method needs an activation process of about 7-14 days. Therefor you won’t be able to use direct debit without completed activation process. Please note too that this service is only available in Germany right now!

EDIT: checking the terms of service fine printed at the bottom of the page I finally found this

3.1 The merchant receives the right of use to the Paymill platform limited to the duration of the contract, territorially restricted to the following countries, which is non-exclusive, non-sublicensable, non-transferrable and non-assignable. Countries in scope: Andorra, Belgium, Denmark, Germany, Estonia, Faroe Islands, Finland, France, Greece, Ireland, Iceland, Italy, Israel, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Austria, Poland, Portugal, Sweden, Switzerland, Slovakia, Slovenia, Spain, Czech Rep., Turkey, UK, Hungary, Cyprus (Greek part), Vatikan City (State). The right of use is valid for access to the platform via the Internet and for use of the functionalities associated with the Paymill platform in accordance with the regulations of this contract and the documentation. The merchant shall be entitled to use the documentation solely for the connection of the utilized data processing system to the Paymill platform and to store the data transmitted to the merchant via the Paymill platform on its data processing system or a data processing system of a third party authorized by the merchant.

abcd_f• 14 years ago

direct debit

jusben13699• 14 years ago

The down-votes come because you assert a fact that is incorrect and can meaningfully impact the supplier and folks reading here. Perhaps "It looks like PayMill is Germany only?" is a better approach.

jusben13699• 14 years ago

SpreedlyCore is another path to go down. It's a cloud based credit card vault that connects to 40+ payment gateways with a good API and docs. We have PayPal Pro customers who use PayPal for processing but develop against our API. We support GoCardless as well. Due to the fact we vault your cards away from the gateway you can change or add a gateway at anytime. I work for Spreedly who is behind SpreedlyCore.

mootothemax3• 14 years ago

Not to forget the other half of the story: issuing invoices.

In Europe this can quickly become a pain, not only due to the extra information you need to collect (names, addresses and so on) but especially if you also need to collect Value Added Tax (VAT). This means asking for VAT IDs for companies - if they have them - and then calculating the tax based on whether the customer is in the same country as you or not. The complexity can rapidly descend into madness.

I have the added fun of having to issue bilingual invoices written in both Polish and English. Well, they could be only in Polish, but then the majority of people wouldn't understand them.

In the end, I bought a ready-made solution (http://nbill.co.uk/) which, whilst not being one of the most intuitive pieces of software I've ever used, gets the job done.

Silhouette6• 14 years ago

Oh, VAT, how I hate you so! You'd think if the tax authorities were going to saddle us all with worrying about other countries' VAT rules, they could at least provide a list of the ISO country codes and applicable tax rates we need to charge in a format that could easily be imported into a database. Some sort of simple automatic notification system for when the rules change would be useful too. At least that way, every small business in the known universe wouldn't have to write the same bunch of SQL after looking up the same details when they eventually found the same web pages, and then worry forever afterwards that something had changed and they didn't know and would wind up inadvertently committing tax fraud or something.

Xylakant4• 14 years ago

The problem is that the VAT you need to charge does not only depend on where you're located and where your business partner is located, but also on the goods/services provided and on wether the partner is a business or a person and maybe even the moon phase and the current water level of the north sea. You can't just create a lookup table, you have to implement the actual rules.

mrkmcknz• 14 years ago

So I sell a simple SaaS service and asked my accountant one question.

Do I charge VAT. Here is his reply:

" Vat rules You need to identify B2B and B2C UK, EC and outside EC customers. A vat registration number is usually accepted as evidence of B2B.

1 All sales outside the EC have no vat implications and are ‘outside the scope of vat’.

2 All sales to UK customers (B2B and B2C) have UK vat to apply to them and are standard rated.

3 All B2B sales to EC customers have no vat and are ‘outside the scope of UK vat’.

4 All B2C sales to EC customers have UK vat to apply to them and are standard rated.

There is a further twist. If you can identify where your service is effectively used/enjoyed, then If the place of supply would be the UK (2&4) but the service is enjoyed outside the EC, then no vat (outside the scope) or If the place of supply would be outside EC (1) but the service is enjoyed in the UK, then UK vat applies."

contingencies4• 14 years ago

The UK isn't as bad as the US, which brings the (often unknown) customer's location (present, domicile or claimed?), the (set of all) vendor locations, and the classification of the good under some all-encompassing system in to play as additional variables.

akshxy2• 14 years ago

wow, this post has made my day. Can anybody recommend payment gateways in Finland?

jusben13699• 14 years ago

I'm pretty sure Braintree is in Finland now. Then there is WorldPay (referenced in the article) and Wirecard.

jarospisak• 14 years ago

Have you checked https://www.maksuturva.fi?

akshxy2• 14 years ago

yes I have checked, planning to use it also. But its always nice to ask the real users of the product. :)

michaelfeathers• 14 years ago

I'm surprised there's no mention of Google Checkout or Google Wallet.

jusben13699• 14 years ago

I am pretty sure Google Checkout is US only and maybe Canada in terms of where you need to be located.

s6672• 14 years ago

UK to but thats it, no one else in europe

phatbyte• 14 years ago

Never heard of Paymill, it seems a very good alternative on Stripe :D

Personally I've been using FastSpring and 0 problems so far. However they only work with apps, not webapps and such.

So it's good to know we are not left out in Europe.

zifot2• 14 years ago

  Personally I've been using FastSpring and 0 problems so far. 
  However they only work with apps, not webapps and such.

By all means they work with web apps: http://saasy.com (it's a FastSpring brand).

biaxident• 14 years ago

Does anyone have any experience with the user experience side of GoCardless? Do customers have any issues entering their account number and sort code, rather than the usual card information?

I really like GoCardless but feel that customers might be hesitant to enter that information, especially when they're not used to doing it.

estel• 14 years ago

That was definitely one of the concerns that we had when we decided not to implement GoCardless last year for a product. Paying by direct debit is such an unusual process online outside of Paypal and magazine subscriptions, that it's easy to imagine conversions will suffer.

mattmanser2• 14 years ago

Did you test any of this, or is that just your gut speaking?

Some people have funny ideas about how DD works, not realizing it's extremely consumer friendly and much smaller fees than credit cards.

I was thinking of offering both as my brief play with GoCardless was very easy to implement.

hirokitakeuchi• 14 years ago

Hey - one of the founders of GoCardless here.

We have found that conversion can be just as good, if not better than cards in the right cases. The biggest factor that affects this is transaction type.

We see really great conversion for repeat billing where Direct Debit is already a well known method of payment. Conversion is not as good for one-off payments where DD is less expected though.

tomwalker• 14 years ago

I appreciate the honesty and lack of 'spin'.

I was considering GoCardless but a survey of my customers stopped me.

jusben13699• 14 years ago

One of the larger ones not referenced at all would appear to be Wirecard. We've heard good things about them. Anyone here have a comment one way or the other?

mkuhn• 14 years ago

The were the payment provider at my last startup and thinks worked very well. We used them in connection with Recurly.

s6672• 14 years ago

I spent months applying via braintree, 6 year old business, have accounts and good record and large site, had to give passport scans, bank statements, company accounts and other documentation spend weeks going back and forth

only to be refused because "hosting" is considered high risk

if you are in europe dont waste time with braintree!

filvdg2• 14 years ago

I don't think i saw someone mentioning http://www.ogone.com

Their solution is a bit oldfashioned ... needing to skin one of their pages and send over the customer for processing but they offer plenty of payment options like debet & webbanking payment options

stdbrouw• 14 years ago

Expensive though, unless you're processing quite a large number of transactions.

filvdg2• 14 years ago

your right , if i remember well it was about 50-80 euro a month just to keep the account alive

alternize• 14 years ago

we're using them as well after having tried many of the other options. they are quite far ahead from other european cc payment providers like f.e. saferpay. and from experience, their support is way better when it comes to technical/api questions.

omd• 14 years ago

Going by the title of this post I was hoping it would give a solution to the segmented payment market here in Europe, but it doesn't. A more fitting title would've been "Taking payments in the UK" or Taking credit card payments in Europe".

The main problem we have here is that debit cards are a preferred payment method and each country has it's own system. From my experience and other reports I've seen up to 30% of the customers will use a debit card if that option is given. I don't know how many of them would cancel the sale if debit payment isn't possible.

Unless I'm mistaken only WorldPay offers some of the local debit cards, such as Carte Bleue in France, Bancontact in Belgium and iDeal in The Netherlands. Paymill seems to be the only one to offer ELV in Germany.

bad_user2• 14 years ago

Could you explain a little bit more about what's the problem with debit cards in Europe?

I have a MasterCard debit card with which I never, ever had problems making payments and I have made such payments, either direct or through PayPal, Google Wallet or iTunes. Before this I had a Visa debit card issued by the same bank (Groupe Société Générale). Before this I had another debit card issued by another bank.

All of them worked, all of them debit cards, as indeed credit cards are not really popular here. Should mention that I'm from Romania and this debit card is linked to my bank account (are you talking about anonymous debit cards or something?).

Xylakant4• 14 years ago

A mastercard debit card works much like a credit card. In germany for example, your standard "debit card" is your banks card and in online transactions, you just enter bank account and the banks identifier. It's a legacy way of paying that dates back to the eurocheques. It's comparable to the Card Bleue in France which is a system that exists pretty much in France only. This fragments the market.

skrebbel• 14 years ago

I had never heard to Braintree, even though it seems like a just-as-mature and very comparable competitor to Stripe. Also, plenty fast-growing companies seem to have heard of them anyway, cause they're using them. What's the secret? Is it all just marketing, where Stripe markets though HN and the likes (so that people like me hear about them) and Braintree uses, say, sales people? Or have I simply been sleeping?

simonw• 14 years ago

Braintree have been around for quite a while (they launched in 2008, so they're older than Stripe) and have published some fascinating things about how their technical architecture works: https://www.braintreepayments.com/braintrust/scaling-postgre...

petercooper6• 14 years ago

They were quite prominent in the Rails community early on (37signals use(d) them, as did several other well known Rails-based sites). They also used to reach out to Rails-based sites in particular but are now more general.

return03• 14 years ago

  Unfortunately PayPal is pretty much an unregulated bank and
  there are a number of horror stories about them closing accounts, 
  freezing funds and making life very difficult for entrepreneurs.

Actually, in Europe, paypal IS a registered, regulated bank in Luxembourg. That, to me, makes it more credible.

ZoFreX• 14 years ago

In addition many of the "freezing funds" stories are actually about holding a rolling balance in case of chargebacks.

rytis• 14 years ago

So what does that mean in practice?

return03• 14 years ago

They require lots of documentation when you register as a business. They also have to comply with EU regulations, which, hopefully, also protects us as business owners. IANAL, so i don't know what are the practical implications.

http://en.wikipedia.org/wiki/PayPal#Regulation

jahewson• 14 years ago

They pay very little tax

gambiting• 14 years ago

No normal bank can hold your founds for 180 days for "review". If any bank in any EU country tried to do that, they could get sued to hell. Yet paypal can get away with it, but how? I don't know.

dangrossman• 14 years ago

The 180 day hold is standard practice. Virtually all US merchant account agreements have clauses specifying when a reserve account, holding part or all of the merchant's transactions, will be established (when? at the processor's discretion, really). If the merchant is terminated, funds in that account are held for up to 180 days to cover future chargebacks. PayPal inherited that from the two banks underwriting all their accounts -- Wells Fargo NA and JP Morgan Chase. The policy predates PayPal's founding, and isn't anything unusual.

return03• 14 years ago

If they did that to you, you should sue them. They are a bank like all others

ViktorasJucikas• 14 years ago

Here at YPlan in London we're using DataCash as a PSP and BarclayCard as a merchant account. We talk to DataCash directly using their API, it's not that difficult to integrate and they're very helpful with any payment related questions.

Silhouette6• 14 years ago

Agreed, the effort required to collect payments is absurd for a UK start-up today. I haven't added up how much time we've spent just trying to find a good way to let customers pay us, but I'm quite sure we would have launched long ago if we'd had a simple no-brainer option and spent the rest of the time building our service instead! As it is, we've been looking into options for months and nothing is perfect.

For us, GoCardless win in every respect except for scope: the bank accounts they can charge have been limited to UK only and are just starting to expand out to other countries in Europe, but global sales aren't possible for now so you need at least one other option if your customers are worldwide. No complaints so far in terms of integration, support, fees, or legal terms though.

Braintree is our other current plan: there's a multi-week time lag and the hassle of providing significantly more information up-front when you apply, but like GoCardless they seem to have good support and the information they ask for doesn't seem to be unreasonable, just time-consuming. Also, unlike a lot of payment services, their legal terms were quite short and so far red-flag-free. The fees aren't bad, but they need to sort out their presentation so they don't refer to obscure bank interchange rates rather than giving a straight answer on percentages, and the minimum monthly fee just to sign up is expensive if you're only expecting a modest number of customers in the early days. They do have some serious limitations in their fraud protection that make us wary of chargebacks, such as not supporting 3D Secure and the liability shifting that should go with it.

We've considered numerous other options, including most of the ones mentioned in the article, but ruled everyone else out so far.

PayPal is a non-starter due the fact that on their new web site it seems you can't even look up basic details without signing up for an account and all that goes with doing so. Combine that with a well-documented history of poor customer service and some dubious terms last time we checked, and for us they're not a serious contender. The one thing you can see before signing up is the fees, which are high even before all the nasty extra percentages they can add on if you look carefully enough.

Paymill should be a much better option, but I simply couldn't understand their legal terms, so they've rule themselves out immediately. If they want companies like us to look at them, they need to hire a lawyer who speaks English, and then they need to write terms that are clear enough that we could confidently accept them without paying a small fortune for a lawyer to review them in detail. The Rocket relationship doesn't inspire confidence about them as a long-term partner for such a critical business function either, though that could be overcome.

We did consider a couple of traditional payment gateway + merchant account set-ups, and actually there seem to be some quite decent payment gateways these days in terms of service, fees and integration options. However, the heavyweight merchant account guys seem to be so risk averse and offer such absurd charges and waiting periods that we're not going to waste our time applying and sitting around for a month or more for an answer in case they deign to work with us.

As an extra data point, we also considered outsourcing the entire payment collection process to FastSpring. They were expensive and their system didn't seem to have a lot of flexibility, though in return they did seem to offer to do a lot of the set-up work we would otherwise need to do ourselves. The deal-breaker here was that we got the feeling they didn't really understand the tax and data protection rules in Europe and that gave us little confidence that their system would cope with our statutory obligations. This was quite a while ago, though, so perhaps they've improved more recently, and in any case they might be a better fit for people with a different business model.

Bottom line: For us, GoCardless is a clear first choice, and then once we're up and running we'll look at applying for Braintree to broaden our reach, as they want to see a bunch of stuff when you apply that we'll have done anyway by then.

fastspring6• 14 years ago

Re: tax and data protection rules in Europe, over 1/2 of our clients are located outside the US, the majority of those in the EU, and so we have been handling the key EU issues (VAT, euro payment methods & currencies, EU language support, etc.) for some time now.

In terms of cost, there's a major distinction in that FastSpring's pricing of 5.9%+$.95/txn or a flat 8.9% is inclusive of the cost to process credit card and other transaction types globally (typically costs 3-4%+ of every transaction including chargeback fees when you get your own merchant account, assuming getting one is an option for you) because FastSpring is the reseller, the merchant of record. The other reason is the vast functionality FastSpring provides as part of its full-service, all-in-one solution, enabling developers to skip the months or even years of dev work and instead focus on product dev and marketing. You can view the difference here: http://bit.ly/uuklQu

Silhouette6• 14 years ago

Thanks for replying. As I did acknowledge, we looked into your services some time ago and things may have moved on, so perhaps for everyone's benefit you could clarify a few things that bugged us back then?

As far as VAT goes, at the time you appeared to collect it and then remit it directly to national tax authorities, not to your clients. If that is still the case, could you explain why you are required to collect VAT at all if you're acting as a reseller and based outside the EU? If you're acting as the merchant for tax/legal purposes, how do clients offset VAT they have paid themselves against VAT on the purchase if you handle all of the collection and remittance directly? If you're acting on behalf of the merchant, how do clients integrate with your systems so that any invoices generated on your side meet the requirements for sequential numbering if they also sell via other channels?

In terms of data protection, are you now covered by Safe Harbor or equivalent provisions, so there is no risk of clients running into trouble because you might be considered to be collecting personal data on their behalf and then exporting it outside the EEA?

Regarding the pricing, I'm afraid you just have to eat that one. Obviously you're offering a tailored service in exchange for the higher rates, so it's an apples to oranges comparison, but just about everyone from newcomers like Stripe and GoCardless to old school payment gateways now offers hosted options or transparent integrations that can be set up in hours, not "months or even years of dev work". Meanwhile, none of the options we've been considering recently are anywhere close to the rates you charge even with extreme adverse factors. In more normal cases, you're about 3x as expensive as various card payment services, and GoCardless charge a flat 1% and that's it.

contingencies4• 14 years ago

I recently (~2010) had good experiences with HSBC's card gateway in the UK. XML based integration. Fast. Global. Full access to fraud information.

mietek2• 14 years ago

Do you mean HSBC Merchant Services?

http://www.globalpaymentsinc.com/UK/index.html

thisone• 14 years ago

(disclaimer, the last time I had to deal with these things was 11 years ago, in the states. And I don't know what your exact needs are)

I see you didn't directly mention Sage, I've seen a number of sites using Sage Pay for their online billing, and they don't seem to require a merchant account. (though fees are probably higher than others)

stevoski3• 14 years ago

Every time I see an article along these lines, I can't figure out why software startups don't just use a third-party payment processor like FastSpring or Avangate. It makes all these complications go away.

Outsource anything you can, especially the things that others can do much better than you because it is their core business. Payment processing is definitely one of those things.

I started my software company in Germany and have always used a third-party payment processor.

sgdesign• 14 years ago

I might be wrong, but I don't think that can work if you want to accept credit cards directly in order to keep customers on your site for the whole checkout process.

These type of solution also rarely let you set up recurring payments.

tonyedgecombe2• 14 years ago

I think most of them have supported recurring payments for some time now, certainly Avangate and FastSpring both do.

jusben13699• 14 years ago

PayPal, PayMill, Braintree etc are all 3rd party payment processors. So I don't quite understand your distinction. I believe FastSpring may mean you avoid having to get a merchant account directly so perhaps that's the difference you see? The biggest objection I've heard is the 9% flat rate they take vs 3% and 30 cents per transaction that you'd roughly see from a payment processor.

stevoski3• 14 years ago

The cost for a payment processor 3% and 30 cents per transaction PLUS the costs (time-related, development-related, support-related) to manage to obtain a merchant account, deal with VAT, fraud detection, a nice customer experience, and many other things. For startups you end up way ahead by NOT rolling your own solution to this and other problems.

zifot2• 14 years ago

  PayPal, PayMill, Braintree etc are all 3rd party payment
  processors. So I don't quite understand your distinction.
  I believe FastSpring may mean you avoid having to get a
  merchant account directly so perhaps that's the
  difference you see?

The main difference is that FastSpring acts as a reseller. One of the consequences being that Europe based startup doesn't need to handle VAT - technically it's selling to the US.

  The biggest objection I've heard is the 9% flat rate they 
  take vs 3% and 30 cents per transaction that you'd roughly 
  see from a payment processor.

Well, it's not cheap but we have EU regulators to thanks for it - not having to deal with VAT can be worth the price in some cases. And when a company grows, it can optimize in the payments area.

fastspring6• 14 years ago

Indeed, FastSpring is the reseller, the merchant of record, so everything gets outsourced.

tonyedgecombe2• 14 years ago

These e-commerce companies will negotiate as long as you have a reasonable revenue.

Loic• 14 years ago

Please note that a lot of the difficulties with respect to taking payment for the OP are coming from two things:

- market place for alcohol;

- high value of the items exchanged, in thousands of £.

Everywhere in the world, this would flag a business as dangerous.

If you have a simple webservice offer and if you are banking with Barclays, you can get a merchant account with BarclayCard nearly "over the phone". They take a bit of money, have a 45 day retention period per default, but at the end, they are efficient with a reasonably easy to implement interaction API (if you take the hosted payment page).

mmaunder• 14 years ago

I don't get it. Just call MerchantWarehouse (sp?) and get them to hook you up with a merchant account and an authorize.net gateway. We take payments from all over the world using them and get dinged around 3% total with very few chargebacks. It's really not that big a deal.

fredoliveira• 14 years ago

It is a big deal, actually.

Have you ever set up payment processing in the US? Did you get it going in a matter of minutes and not days? Because I have, and I can clearly say that any of the solutions presented in the post as well as the one you point out (and with a tone, as if everyone just had to know about this MerchantWarehouse you speak of) require a lot more work. I'm okay with work, just not okay with jumping through hoops that are unnecessary elsewhere.

pakitan• 14 years ago

I don't get your post either. On first glance, MerchantWarehouse seems to be servicing US businesses only. "Just calling" them from Europe would likely result in a very short conversation :)

zimbatm2• 14 years ago

One big missing pain: EU VAT taxes.

According to the law you're supposed to tax EU customers if your business is in the EU. Obviously the tax is different for each country and changes from year to year: https://en.wikipedia.org/wiki/Tax_rates_of_Europe . Businesses with a VAT ID can be exempted from the tax but only if they provide a valid VAT ID. At the end of the year your business then provides the list of transactions and VAT IDs to your state with the tax form and the state takes care of forwarding the taxes to the other countries.

According to the law you're supposed to check the validity of that VAT ID and because the data changes over time they provide an "API": http://ec.europa.eu/taxation_customs/vies/faqvies.do That API forwards the query to country-specific databases and these databases go down. From their FAQ: "Some parts of the system may be unavailable at certain times due to the necessity to back-up the Member States' databases." Year right.. From my 1 month experience I've already seen two outages, one of them lasting a full day. And I'm not actively monitoring the service.

I've also had customers from Spain and Germany ask for their VAT ID to appear on their billing recipes, because of regulations again. It shouldn't be a biggie but Chargify doesn't support that field so I have to ask customers to use their Billing Address 2 field instead as a hack.

These are still things that I haven't figured out yet:

What happens if you provide invalid VAT IDs in your tax form ? I don't want to loose conversion because a state-owned service on which I have no control doesn't work properly.

I've read in multiple places that if the customer is in your business' country the rules are again different but I have no idea how.

petercooper6• 14 years ago

As far as I understand it, you can check and are expected to observe and note anything odd about transactions with supplied VAT numbers but AFAIK - and I'm not a lawyer! - there's no law that you must check every one. (Note: This may be a UK specific interpretation.)

However, if they turn out to be false and the tax man comes back to you, you could be liable for the VAT. Depending on your sales profile, you might consider this an acceptable risk - I certainly do (I get perhaps 10 transactions like that each year).

zimbatm2• 14 years ago

Thanks. We'll see at the end of next year :) (UK-based too)

simon02• 14 years ago

We operate from Belgium. We only have to charge the Belgian tax rate (21%) for other Belgian companies or consumers living in the EU, in all other cases VAT rate is 0% (have to put a disclosure on the invoice referencing Belgian law though). Then again we don't sell any physical goods (luckily).

We don't automatically check validity of VAT number, so maybe I'll be able to answer that question in a couple of months.

fastspring6• 14 years ago

When you use a full-service e-commerce service that serves as a reseller and is the merchant of record, taxes become their responsibility, not yours. At FastSpring, we handle VAT and have dealt with all the different issues that come with it: real-time VAT ID validation, exemption for B2B customers, being able to display prices using VAT net pricing mode or VAT gross pricing mode, and so on...

Jhsto• 14 years ago

There's also a Finnish startup doing online payments in Europe: https://holvi.com/

glenjamin• 14 years ago

Both Amazon Payments and Google Checkout are now available in the UK, at the same pricing level as PayPal.

The two main complaints levelled at PayPal in TFA are poor customer service and poor technology - two aspects that Amazon have been very good at in my experience.

Does anyone have much experience with these platforms and their use by "normal" UK consumers?

petercooper6• 14 years ago

I tried using Google Checkout early in my business and it had a fatal flaw of not letting me sell things in US dollars and British pounds but only British pounds. Since 90% of my business is in the US, it was a non-starter. I have to wonder if they've improved it since, though.

Silhouette6• 14 years ago

Interesting to hear that Amazon Payments is available in the UK now, but they still seem to be physical products only, no digital downloads, services, etc. so that limits their usefulness.

FWIW, we looked into Google Checkout/Wallet but the unclear branding and some tight rules about how you had to present the option on your web site put us off before we got very far.

Bentis2k• 14 years ago

PayEx is large in the Nordic countries (Norway,Sweden,Denmark,Finland) but apparently has some global support as well. Unfortunatly there's no public word on pricing.

See http://payex.com/business/services/Payment/online.payments

patio11• 14 years ago

Vinetrade has the kind of business model that scares banks and card payment providers. We trade high value goods (prices in the region of £1.5-20k) that are rarely delivered to the buyer (they're stored in remote warehouses).

I love virtually all startups and wish for their success. That said: I'm thinking that when every bank in Creation was saying "We won't take CC payments for that. No, no, you simply can't convince us that is a good idea." they were actually being appropriately conservative about legitimate operation risks uniquely incurred by this business model.

If you don't have a Fraud Guy, I respectfully suggest either hiring or training a Fraud Guy very, very soon, preferably before enabling any form of credit card payment. Your Fraud Guy is going to have some recommendations, including recommendations which meaningfully interfere with the product team's ability to meet user demands. If you do not listen to your Fraud Guy's recommendations (or, regrettably, even if you do), you may eventually get an expensive lesson in why both BigCo and startups in related fields eventually have to hire a/several/an entire department of Fraud Guys.

One of your Fraud Guy's first questions is going to be "Is there any pathway by which I can take a credit card and turn it into cash using this service? If so, what is the timeline on that?" I am not a Fraud Guy, but I count two ways to cash out credit cards, just reading the website FAQs. If you are discovered by the adversaries to be the weakest link in the UK financial system with regards to cash outs, you can expect heavy, dedicated adversarial interest.

jmaskell3• 14 years ago

There were two big problems with the banks:

1. A number of wine investment companies took card payments but never bought the wine. So the bank was liable for the money lost in those situations - and as a result that put a blanket ban on all fine wine companies. We were able to talk Barclays around on this.

2. Storage of wine would be handled by a third party warehouse. If they screwed anything up (e.g. broke the case, had a fire, and insurance refused to pay out), there was a chance that buyers could get the money back through their bank if they paid by credit card.

and for us when we did accept this:

3. Getting the fees to work with our model - we wanted to offer a fixed fee for trading cases, but all banks / payment services wanted to take a percentage, including for debit card payments (hence my point about doing more work to get the model to work payment charges).

Obviously fraud is a major concern, and is something that we do a lot of work on as we scale up (e.g. at the moment we're manually processing all orders, taking ID for anyone buying more than £10k total etc). It's not something that we're naive too and we're definitely not going to launch a completed automated system without adequate processes in place.

steve89182• 14 years ago

2) If you're talking about chargebacks, it would be YOU that the buyers would be charging back the money from, not the warehouse, since you were the merchant that accepted the payment.

And am I right in that you are basically saying that the buyers take on all risk of storage at the warehouse facility? If so, you should probably outline that as well, including what the insurance policy of the warehouse, covers, etc.

Cherian_Abraham• 14 years ago

Have you looked at 192Business from a fraud/authentication perspective?

conorgdaly• 14 years ago

From the Vinetrade site:"Secure and trustworthy. Your transactions are encrypted."

Step 1: Start posting username/pwd to your server over HTTPS and start delivering signup & login forms over HTTPS.

At the moment, both of these happen in plain text so I don't see how you can say you take security seriously if you can't even get the low hanging fruit.

steve89182• 14 years ago

This is an extremely important message. Fraud is very easily the thing that can sink many small companies that aren't used to the levels of fraud that you will see on the Internet. And because there are so many ways to defraud a merchant that isn't obvious, merchants need to be extremely careful and educated on the process. And handling chargebacks will become a full-time job for someone in your company, once your company becomes big enough. I work at a payments company, and fraud is something that ends up being a headache, although we are at lower-than average industry norms.

It seems relatively easy for someone to turn credit card payments directly into cash, by making a trade and then extracting cash through the bank account. And the gap between your withdrawal policies and the chargeback policies of credit cards are pretty wide. I would be very careful about this. Forcing users to enter bank accounts make it a bit harder for average people to defraud, but not a motivated fraudster. Also, allowing people to take delivery of wine through the purchase of a credit card, and then being subject to a chargeback will be extremely painful, although I'm not sure how easily chargebacks are fought in Europe. If you do suffer a lot of chargebacks though, even if you successfully fight them all, be prepared to be dropped by your credit card processor.

I think your business is actually very interesting, but I'm surprised that credit card companies would allow you to accept credit cards at all, since I would think they would lazily lump you in as a form of brokerage site. Not that I believe this, but it seems like an easy translation to stock brokerages, which don't accept credit card payments, but force you to transfer real cash into your accounts before you trade. Then once you have money in a brokerage, they can extend margin, but they maintain their own risk by monitoring the margin levels, etc.

Good luck though, I read through your site and I think it's a very neat idea!

jmaskell3• 14 years ago

Thanks! Our preference was actually to take debit cards only - but regularly got told that it's all (credit cards too) or nothing.

enraged_camel• 14 years ago

Yeah. Paypal was in that boat early on. They survived only because they were able to solve some very tough fraud problems. Otherwise it would have sunk them. I don't remember who was talking about it - maybe it was Thiel - but he said that at first it didn't seem like a big problem (in terms of how much it was costing the company), but someone at Paypal noticed that it was growing exponentially and if they didn't address it quickly they would not survive.

tedunangst• 14 years ago

Max Levchin in Founders at Work, iirc.

tope• 14 years ago

I use Braintree for appdesignvault in thr UK and have found their service to be top notch.

The only issue was Ayden settling the funds into our UK business account every 4 days and getting charged £6 for the privilege. A quick support email fixed that

pathy• 14 years ago

What about using Klarna (https://klarna.com/)? Admittedly not credit card payment but also decreases risk as they take on the risk, according to themselves.

Reputable company based in Sweden so no dealing with American companies - more suitable for European markets.

ersii• 14 years ago

Indeed, I thought the same.

It's in my opinion more costumized for the European market - they can handle credit cards - but they also have setups where they buy the invoice from the merchent and handle the payments and stuff like that.

It's extremely widely used in the Swedish online merchent business world. And they're available in most European countries it looks like.

jbrooksuk• 14 years ago

GoCardless isn't supported by Shopify which is a big pain. Braintree does so I'm awaiting an email from them now so I can start to open my online shop.

I recently blogged[1] about the need for Stripe to come to Europe whilst the market is there. Until GoCardless, Braintree Payments start making the API just as good as Stripes, then the need for them to come here is here.

[1]. http://james.brooks.so/blog/stripe-in-europe/

JoelJacobson2• 14 years ago

It's easy to forget, just offering VISA/Mastercard won't be enough in a lot of European countries.

Online bank e-payment is the preferred method by customers in quite a few European countries.

Most PSPs only offer bank payment services requiring the merchant to sign up with each and every bank in each country, but there are a few PSP where you only need ONE single merchant agreement to offer payment by bank in _all_ the countries the PSP provides.

List of payment companies offering online bank payments via single merchant agreement:

Trustly.com: Spain, Sweden, Finland, Estonia and Poland Payment-Network.com: Germany, Austria EUTeller.com: Finland

If you know if any additional online bank e-payment companies covering European countries, please reply. Thanks!

pbreit• 14 years ago

The OP is still being naive. For 1.5k-20k transactions, you have to pretty much do (or at least start) payments the old fashioned way: 1) vet buyers and 2) wire transfers, bank transfers or checks. Going with the payment startup du jour is not prudent.

krmmalik• 14 years ago

Fantastic write-up. Thanks for doing this. I was searching for an article exactly like this and it's good that i can learn from your experiences of the newer providers. I've used Worldpay, SagePay/ProtX and Paypal in the past and completely understand your frustrations.

Wish we had a dwolla equivalent too.

shtylman2• 14 years ago

You should look into bitcoin (at least know about it and how it can help you as a merchant). Any payment company that deals with credit cards is not just a payment company but a fraud detection service; at least that is what it should be selling themselves as. Fighting CC fraud (and bank transfer fraud) is a challenge as the system was not designed for the digital space.

descala• 14 years ago

Do you know of any European based company accepting bitcoins?

jamoes• 14 years ago

In Germany, there's a bar called Room 77 that only takes bitcoins:

http://www.npr.org/2012/06/01/154140277/berlin-restaurant-ex...

blibble• 14 years ago

it's far too difficult to acquire them at the moment for normal citizens, at least in the UK.

I spent at least 4 hours trying to legitimately acquire bitcoins to purchase some pretty physical coins from https://www.casascius.com before giving up.

shtylman2• 14 years ago

If you only spent 4 hours trying to acquire a completely new currency that is not backed by any major authority yet still usable all over the internet, you might want to spend some more time :) And yes, getting a hold of them is still a challenge. If you want to buy in bulk, you can wire money to many of the exchanges for standard wire rates.

smagch• 14 years ago

There is a stripe-like startup in Japan. https://webpay.jp

Interestingly, they used to provide a fork of stripe gem for Ruby API. But they gave up on developing on their own. They have stripe compatible ruby API now. https://github.com/keikubo/webpay-ruby

I have no idea why they don't implement on their own.

burgreblast• 14 years ago

I don't understand why you would consider using Braintree in Europe (or anywhere) vs. going to Adyen directly.

The Adyen guys are smart, their technical platform is simple and robust, and unlike the Stripe/Square/Braintree guys, Adyen actually does the processing so they can offer better rates and are suitable for huge volume.

About the only downside is that "At-jien"'s b2b marketing is pretty terrible. They have some faux Apple videos on their site which I think undermines their technical sophistication.

floris• 14 years ago

It's surprising to see how little people mention Adyen in this thread. One of the big benefits of Adyen is that they also supports many more payment options besides credit cards. For example: Paypal, iDeal, Card Blue & SOFORT Überweisung. If you're serious about receiving payments from consumers in Europe, supporting these is pretty much a necessity.

kybernetyk• 14 years ago

I'm seeing a problem with Paymill: They clearly were built by Rocket to get acquired (possibly by Stripe) in the future. So I'd be careful with integrating their services as those services might be acquired and shut down anytime.

white_devil• 14 years ago

Whoever acquires them is not likely to throw away all the money Paymill's existing customers bring in. It's not like your typical Google acquisition where the original product just dies.

calpaterson• 14 years ago

> [Paymill] also require some business information and identification from you, but this does not appear to be particularly stringent

Actually, speaking from personal experience, it is particularly stringent. I had to give up in the end because the bureaucracy was taking too long.

From memory, you need a tax identification number, your VAT identification number a scan of your passport, to display your name and home address on your website and you need to post it all to Munich. I suppose this doesn't sound like too much but in the UK you have no reason to have a tax identification number unless you're self-employed and already trading. In the UK you don't have a VAT id unless you're making £77k. Outside Germany showing your home address on the web is considered a bit crazy. Consider now that if you're trying to get Paymill to authorise you are probably are not trading yet. It's not that appealing and I would recommend against it unless you have time to spend exchanging emails with customer service representatives who have a poor command of English.

Paypal's (admittedly lame and APIless) method of payment acceptance is to copy and paste a button.

BigBalli• 14 years ago

Not limited to EU-only but you can also find more info here: http://giacomoballi.com/2012/10/mobile-payments-what-are-the...

jvandenbroeck• 14 years ago

If you're talking about whole europe & not just the UK it's getting more complicated, credit cards are not that omnipresent here. You could try http://www.ogone.be/en/Extra%20Services/Payment%20Methods%20...

melicerte• 14 years ago

We are a startup operating from Belgium and we are using Avangate (http://www.avangate.com/online-payment-solutions/) for our product RBLWatch (https://www.rblwatch.eu/) and a few other things.

It supports recurring fees, and manage the VAT and currency issues for you. It takes those awful banks solutions away. Integration with our PHP code base went very easily. And, in the end, we only issue one invoice.

I definitively recommend.

On the other side, Ogone is just... too 90ties. And it is really hard to deal with subscription and recurring fees.

tripzilch• 14 years ago

this may be a stupid question, I don't know anything about online payment processing, but is the new IBAN thing not supposed to make these things easier?

Taking payments online in Europe in 2013

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