Merchant Bank Accounts and Payment Gateways?

audioblackout

Hi guys!

I'm in the process of setting up an MP3 download store. I'm planning for a worst case senario turnover of around 50K (all credit/debit card payments) for the first year but hopefully this will be alot more than this!

I wonder if anyone can offer me some advice in finding the right combination of Payment Gateway and Merchant Account.

I have been recommended Sagepay, but obviously I then need a Merchant Account to go with it.

If at all possible I don't want to be paying a huge set up fee for a Merchant Account, but obviously I want the best rates on transactions, so if I have to, so be it.

Are there any banks anyone knows with good deals on? And is Sagepay the right Gateway to be going with or are there better options?

I'd massively appreciate any recommendations.

Thanks in advance!

Mark

Mark_In_Hampshire

You could look at

SagePay
WorldPay
Barclays ePDQ
Cybersource

(List not exhaustive)

The first one usually has some quite good package deals for start-ups.

Most of the above are supported by most e-commerce software.

In your case I'd have said you want to consider the following:

1. If your amounts are small per transaction you'll want one with which the fee is % based, not transaction based. Also consider debit card fees which are normally transaction based and at a flat fee and probably likely to be used for small amounts - they will matter
2. Probably not so much with MP3, but if you planned to also have movies - security and fraud prevention features - Cybersource is strong in this area
3. Chargeback protection schemes - what's available with each, cost, what it gives you

In the above list, World Pay can supply you with an IMA (Internet Merchant Account) and this can be good for start-ups who struggle to get a conventional IMA. However this is normally with a very slow remittance cycle which can bite cash flow. This package deal is therefore normally a worst case scenario.

Sometimes the best IMA rates will be with the bank who provides your business account, but not necessarily so - shop around

Some goods are high risk categories and the % fees can be scandallous. Different IMAs may have different risk assessments. Bear in mind that one of your risks is the immediate fulfilment of orders (assuming that's the case - pay, then download) - you have no in-between time to validate and then "ship" the order.

Depending on your strategy for the site and the costs involved, look closely at the ongoing transactional fees and don't baulk at set up charges when dearer if the fees are much lower.

You'll normally get better rates with a higher turnover (these things can be very much "we'll give you a quote" as opposed to a-la-carte pricing and if you get into that situation remember there's almost always a deal to be done.)

In terms of deals - some of the start up deals may be to your advantage where they include a certain amount of transactions per month for a flat fee, because your business might be high volume low amount - McDonalds looks throbbing on a Saturday, but then a cheeseburger is only 99p or whatever. It's a lot of effort to serve (many transactions) to get turnover.

That's an initial brain dump but post back if you need any more guidance.

coolesticeking

I know this does not really answer the question fully but have you tried WorldPay?

You pay £15 a Month and this includes the ability to a accept Credit/Debit Cards and has the "Merchant Account" built in.

This can then be remitted to a Business Bank Account or Personal but depends on how you are wishing to set the Business up.

audioblackout

well this is incredible advice! i appreciate it so much. i have shopped around and yes, the best deals are the higher set up fees. it seems also that if you go through the fsb, you are be able to get preferential rates at the rbs. i'm learning as i go along but when i finish i will post my results!

thank you!!!

jonesMUFCforever

Just make sure you have a business account open somewhere to accept payments.
If it goes into a personal account I would expect the bank to get very suspicious and eventually close your account.