Payment Systems
How to choose the best payment system? Surely, when launching an online project, everyone has faced this question. Indeed, every business has a number of requirements for the withdrawal time of incoming funds, the maximum commission size, the required 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 on the Internet today, 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:
1. VISA and MasterCard card payment systems represented by banks and processing companies
2. E-wallet systems such as QIWI, WebMoney, Yandex-money, etc.
3. Payment intermediaries accumulating funds like PayPal or Moneybookers
4. Universal systems and “aggregators” providing HIGHRISK payment solutions
• Recommendations of industry financial institutions or banks
• Copies of the latest tax returns (depends on the expected sales volume through your merchant account)
• Credit history of your company and/or personal credit history
1. Card Payment Systems for Websites
Typical representatives are not VISA and MasterCard themselves, but always a bunch of two legal entities, namely a bank and a processing company. Both of these organisations are always present and are essential elements of the card payment clearing procedure. The bank that opens the so-called “merchant account” is a repository for the received funds and is responsible for their “cleanliness”. And the coordinator of the entire complex process of checking card data and guarantor of transaction security is the processing centre. At the same time, when a payment system is connected for the site, both of them can work with many other banks and processing companies. 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 definitely made in favour of the processing company. There are several reasons at once. Firstly, from the “bank + processing” link, only banks are responsible to card and interbank regulators, so it is incomparably more difficult to negotiate with a bank. Plus, as a rule, banks specialise only in certain types of businesses and do not work well with Internet companies that do not fit their established template, and it is impossible to determine in advance whether a bank is suitable or not. Processing companies, on the other hand, are not bound by strict requirements and the fear of losing their licence, and therefore are “absolutely flexible”, in addition, unlike banks, they employ IT specialists who are familiar with all your questions and who are always ready to tell you what and how best to do.
Considering the above and the fact that both banks and processing companies work with a multitude of counterparties, it is easy to understand that it is easier to contact a processing company that, almost certainly, will be able to work with you and then “fan out” your application to the banks with which it is integrated, than to sort through the banks one by one, expecting that one of them will agree and then hope that it cooperates with a normal processing company.
2. E-wallet Systems
With electronic currencies, everything is much simpler than with bank cards. Since these organisations combine the functions of a technical provider during connection, and a “central bank” for themselves, and a supervisory authority, and a legislator for their own money, it is easy 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” somewhat increased the requirements for organisations, but in general, connecting to a payment system such as QIWI and WebMoney is the easiest solution to integrate for non-cash payments. Perhaps the only drawback of these systems is their low popularity, except perhaps for such a group of buyers as technically advanced young people, which, of course, negatively affects the possibility of using any electronic wallet as the main payment system for the site.
3. Payment intermediaries
A special group of organisations that are on the one hand electronic wallets, and on the other hand, work with real-world currencies, are payment intermediaries. If you need a plastic card payment system, but you are unable to pass the compliance procedure at any bank, or you just want to save time, you can try contacting systems such as PayPal or Moneybookers, which, acting on your behalf, will credit your account with customer funds and then transfer them to you. What’s most interesting is that the fees in such organisations can even be equivalent to normal processing. Unfortunately, these systems always require each end customer to go through a registration procedure, which significantly complicates the purchase process, which in the context of online trading can be a fatal flaw.
4. Universal Payment Systems or “Aggregators”
Some VISA and MasterCard processing centres are striving to become universal payment systems. To do this, they integrate with a variety of representatives from all previous groups. Due to the fact that they are official distributors of all their counterparties, these “aggregators” provide their clients with a “one-stop shop” service for connecting a multitude of payment solutions for “electronic wallets” and “payment intermediaries” at once.
As a rule, a client, when contacting such an aggregator, only needs to fill out a questionnaire once, and then the aggregator takes care of the entire process of working with other systems. At the same time, commissions and other conditions for each individual solution are always exactly the same as when working directly with service providers. The identity of the conditions with the final provider is a prerequisite for 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, since our motto is “Everything for Internet business”, we also provide legal and tax optimisation services, as well as various consultations. Thanks to this, we may be the most versatile online payment system in existence. We are always glad to see you, please contact us.
