Payment System
How to choose the best payment gateway?
Surely, when launching an online project, everyone has faced this question. Indeed, each business has a number of requirements for the withdrawal time of incoming funds, the maximum commission size, the necessary ease of integration and convenience for buyers. In addition, online businesses have different levels of risk and are often run by legal entities from offshore zones, which of course requires non-standard solutions.
Next, we will look at the main existing electronic payment systems of the Internet, or rather their types with the advantages and disadvantages of each.
Electronic Payment Systems on the Internet
There are four main types of payment systems for a website:
- Card payment systems VISA and MasterCard provided by banks and processing companies
- E-wallet systems such as QIWI, WebMoney, Yandex-money, etc.
- Payment intermediaries accumulating funds such as PayPal or Moneybookers
- Universal systems and “aggregators” providing HIGHRISK payment solutions
- References from industry financial organisations or banks
- Copies of recent tax returns (depending on the projected sales volume through your merchant account)
- Credit history of your company and/or personal credit history
1. Card Payment Systems for Websites
Typically, it is not VISA or MasterCard themselves but rather a partnership between two legal entities: a bank and a payment processor. Both organisations are always present and are essential elements in the card clearing process. The bank, which opens a so-called “merchant account”, acts as a depository for received funds and is responsible for their “cleanliness”. The processing centre acts as the coordinator of the entire complex process of verifying card data and guaranteeing transaction security. At the same time, when a payment system is connected to a website, both banks and processors can work with a multitude of other banks and processors. The only conditions are the existence of agreements and technical integration between the participants in the process.
When connecting to a bank card payment system, the question arises whether to contact a bank or a processing company. The choice is undoubtedly in favour of the processing company. There are several reasons for this. Firstly, of the “bank + processing” pair, only banks are accountable to card and interbank regulators, making it incomparably more difficult to negotiate with a bank. In addition, banks usually specialise only in certain types of businesses and do not work well with Internet companies that do not fit their established pattern, and it is impossible to determine in advance whether a bank is suitable or not. Processors, on the other hand, are not bound by strict requirements and fear of losing their licence and are therefore “absolutely flexible”. Moreover, unlike banks, they employ IT specialists who are familiar with all your questions and are always ready to advise on what and how best to do it.
Considering the above and the fact that both banks and processors work with a multitude of counterparties, it is easy to understand that it is easier to contact a processing company that is almost certain to be able to work with you and then “fan out” your application to the banks it is integrated with, rather than going through the banks one by one, hoping that one of them will agree and then hoping that it works with a decent processor.
2. E-Wallet Systems
With electronic currencies, things are much simpler than with bank cards. Since these organisations combine the functions of a technical provider for connection, a “central bank” for themselves, a supervisory body, and a legislator for their own money, it is not difficult to guess that in these conditions the bureaucratic component of connection is minimal. Of course, in Russia, the Federal Law “On the National Payment System” has somewhat increased the requirements for organisations, but in general, connecting to a payment system like QIWI and WebMoney are the easiest solutions for integrating cashless payments. Perhaps the only drawback of these systems is their low popularity, with the possible exception of such a group of buyers as tech-savvy youth, which, of course, negatively affects the possibility of using any e-wallet as the main payment system for the site.
3. Payment Facilitators
A special group of organizations that are on the one hand e-wallets, and on the other, work with real-world currencies – these are payment facilitators. If you require a plastic card payment system, but are unable to pass the “compliance” procedure in any bank, or you just want to save time, you can try contacting systems like PayPal or Moneybookers, which, acting on your behalf, will accept money from customers to their account, and then transfer it to you. Most interestingly, the fees in such organizations can even be equivalent to normal processing. Unfortunately, these systems always have a requirement for each end customer to go through the registration procedure, which significantly complicates the purchase process, which in the context of Internet commerce can be a fatal flaw.
4. Universal Payment Systems or “Aggregators”
Some processing centres working with VISA and MasterCard strive to become universal payment systems. To do this, they integrate with a multitude of representatives from all the previous groups. Being official distributors of all their counterparties, these “aggregators” provide their clients with “one-stop-shop” services for connecting a multitude of payment solutions such as “e-wallets” and “payment facilitators”.
As a rule, when contacting such an aggregator, a client only needs to fill out a questionnaire once, and the aggregator will take care of the entire process of working with other systems. At the same time, the commissions and other conditions for each individual solution are always exactly the same as when working directly with the service providers. Identical terms with the end provider is a mandatory condition of activity. One example of such an aggregator is our universal payment system Ecommerce Payments.
Dear Sirs, as you can see, we have done everything to become the most convenient and profitable way for you to accept payments. We own our own processing centre, cooperate with many banks, and have organised a “one-stop-shop” system for connecting third-party providers. In addition, as our motto is “Everything for Internet business”, we also provide legal and tax optimisation services, as well as various consultations. This may make us the most universal online payment system in existence. We are always glad to hear from you, please contact us.