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How do you collect money online?

what's the norm?

     
12:21 am on Feb 25, 2003 (gmt 0)

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i have no e-commerce experience. i'm researching what i need to do to set up an online store. from my research it looks like i need:

1. a merchant bank account (is this the only alternative?)
2. a shopping cart (which would probably be part of the software i buy anyhow)
3. a payment gateway

not sure of the merchant bank account/payment gateway bit. assume a merchant bank account is something that can be set up by an established business with good credit history with no problem. But who does the payment gateway bit? is it a financial institution? or can my bank do it?

I'm in australia, but assume all countries work the same in e-commerc.

this forum is UNREAL. i have learned so much in the past week and thank you all.

4:38 am on Feb 25, 2003 (gmt 0)

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junglejane, there is a good thread here [webmasterworld.com] that explains how to get the various pieces to work together. One part you left out is an SSL certificate which is essential if you are accepting credit card payments.

The trick is to find a cart/gateway combination that works and learn it inside out. There are heaps of off-the-shelf carts to buy and I am sure people here can recommend them.

If you are willing to dabble in PHP osCommerce is a very customisable shoppping cart script and I have seen people integrate it well with Gallery, another PHP script for viewing images.

As for gateways, I'm setting up some sites with carts at the moment and eWAY seem to provide a good service that integrates well with the various banks (St George Bank particularly). There are other gateways but eWAY is Australian-based which I think is important but others may not ;).

Might see you in the osCommerce forums :).

11:22 am on Feb 25, 2003 (gmt 0)

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>>1. a merchant bank account (is this the only alternative?)
>>3. a payment gateway

you can have:
a) bank merchant account or
b) internet merchant account (worldpay / 2checkout etc etc)
or you can have both together.

the following is a very brief and very general guide to what's what.

if you take payments over the counter (face to face), you will have a bank merchant account, and if you only take payments over the internet, you only need an internet merchant account (includes online payment gateway).

bank merchant accounts normally require good trading / credit history, good turnover etc. there will normally be annual or monthly fees. transaction fees and your terms will depend on your turnover / trading history etc. if you have a bank merchant account and you want to take payments over the internet, you will need an internet trading ID from your bank as well - it's not really any more than "permission" from your bank to accept payments over the internet as well as over the counter.

if you have a bank merchant account and want to accept payments online and process them manually through your bank merchant account, you need an SSL certificate to accept card numbers securely, then you need to store the numbers securely (encrypted) and download them securely etc. beware of shopping carts / services etc that store or transmit numbers in plain text.

if you use a bank merchant account to manually process cards, your costs are generally:
merchant account fees + transaction fees + SSL certificate + time to manually process transactions

some internet merchant accounts will let you begin trading without a credit / trading history. some require you to have a bank merchant as well, others don't. annual / monthly fees are comparable to bank merchant accounts. transaction fees etc will normally be slightly higher than through bank merchant accounts, but you have other benefits including automated processing - these benefits can make internet merchant accounts less expensive overall than a bank merchant account. your customers will normally use an SSL payment page provided by the merchant account provider, so no need for your own SSL certificate.

if you use an internet merchant account only, costs will generally be:
merchant account fees + transaction fees + less time than bank merchant account

before signing up to anything, look at your options, calculate approximate costs based on expected sales etc. always get what you need, not what looks cheapest - the cheapest option could cost you sales and paying for the right system will save you having to redevelop everything longer term.

i hope that makes sense - no time to carry on with this but i'm sure others will add to it.

12:20 pm on Feb 25, 2003 (gmt 0)

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thanks both of you. previous thread also very very helpful.

do these guidelines apply internationally? ie is this the same everywhere or are these components country specific? (thinking in particular the merchant bank/internet merchant bank component) i am wondering if it might be possible for me to get an internet merchant account in the UK and USA even though the site is based in australia?

my client has bank accounts and residency in the uk, australia and usa - is it possible to have payments made to the UK account as well as US and Australian accounts? or does it depend on which country he is resident in for tax purposes? his work is sold internationally but he declares all his income for tax purposes in australia. he would prefer to keep each client payment in the country of origin seeing as he spends about 4 months a year in each country and doesn't really have a fixed country of residence. he has huge fees every time he has to change currency and he does travel a heck of a lot. he's a photographer, by the way - nothing dodgy:-)

it would be interesting to look into alternatives but i may have to call his foreign banks directly to find out the score. i so realise this may be outside of this forum and my initial query.

i had previously decided to build his site with all money coming into one australian account and he can just bloody well deal with the bad exchange rate, but it would be really good if i could align his online business with his offline business.

crazy_fool your reply was very thought provoking as it made me think that (through an internet merchant gateway) i could possibly accommodate him as long as his credit rating was good in each country he resides in (usa, uk, australia).

ta very much and apologies if this query is offbeat - i am very new to the e-commerce component of the web and may be asking a very silly question here...

ta heaps,
jane

1:20 pm on Feb 25, 2003 (gmt 0)

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Jane, your client looks to have complex financial arrangements that will probably drive you crazy if you try to cover all options ;).

IMHO I would pick a country and a currency. If he declares income in Australia then that should be the country.

For the currency your choices are more varied. The shop prices can be in US dollars (and others) but sales are processed as Australian dollars. Or sales could be processed in Australia as US dollars but some Australian gateways can't process foreign currency at the moment.

Build the foreign exchange fees into the pricing.

Most scripts/shopping carts can handle multiple currencies when displaying prices but I would process in a standard currency for simplicity.

Don't forget the GST for Australian sales either ;).