Online payment systems 2013 City Library Manchester

E-Commerce Made Easy
Zulf Choudhary
Director
Supported By

Copyright Sparta Technologies 2013 t/a SpartaPay

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


About us

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


What is e-commerce?
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 store
2. Dell-computer systems
3. EBay-exchange market place
4. PayPal-online payments
5. Banks

Mobile Examples:
1. Catapult madness
2. Angry Birds
3. Paddy Power

Why is it critical?

Internet changed buying behaviour: How, when, why

• 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.**

•http://www.ons.gov.uk/ons/dcp171778_289328.pdf
•** http://www.internetretailer.com/2013/01/22/uk-e-commerce-will-increase-12-2013


One example
25 billion songs downloaded by via iTunes by end of 2012

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


How online payment gateways work


Setting up a basic ecommerce system
What you need

1. Online merchant account Banks

2. Ability to accept cards payments Payment Service
provider or PSP

3. Provide Security-HTTPS Security providers

4. Provide order forms or a
shopping cart


Factors to consider


Costs, excluding website expensive
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

Example of costs
Set-up Recurring costs Transactional charges
2% - 3.35% per credit card transaction
Merchant account £200 £10
£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


What is exposure to risk?

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.


Charges based on 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


M-commerce

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


Solutions suited for you

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?

The secret: know your customers!!!

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

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.


C. Bespoke- things to consider
Vouchers

Market Social
Place media

Customised
Ideal for bigger merchants expect design
to pay between £3,000 to
£30,000 for basic.

Search &
reviews Newsletter

Issues: your budget, expertise dependency


Summary
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!


Thank you
Telephone: 0161 306 5848

Email: info@spartapayco.uk

Address: Spartapay
University of Manchester
Arch 29, PO Box 88
Sackville Street
Manchester M1 3NL

www.spartapay.co.uk


List of gateways or other types of service providers
This is not an exclusive list-please search the web for more providers
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/

Feb 2013

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


Online payment systems 2013 City Library Manchester

Recomendados

Recomendados

Más contenido relacionado

Destacado

Destacado (6)

Más de JohnKeys

Más de JohnKeys (10)

Último

Último (20)

Online payment systems 2013 City Library Manchester