OT: Virtual terminals

[The Medway Handyman]

I love the thread drift around here! 'Aldi Compressor' drifting into 'Cheques' prompted me to do a bit of research into taking card payments.

Reasons I'm interested;

None of my competitors take card payments - it would put me another step ahead. Credit cards would encourage decking/awning sales. Landlords could pay immediately instead of 'cheques in the post' or 'bank transfer - sorry I forgot'. I could take deposits. Payments should clear faster. Less time taken to pay in cheques.

I don't need an e commerce web site, just over the phnoe wold do.

Looked at various options like Nochex, but Pay Pal Virtual Terminal is currently top of the list. Not the cheapest, but the name is very well known & trusted with the public.

I wondered if anyone had practical experience of virtual terminals?

[Nightjar]

Have you asked your bank what they would charge you for a real terminal? IME Pay Pal is a very expensive way to do things unless your card payment turnover is quite low. The bank charges on a Merchant account will vary according to your expected annual use, but usually work out at

2% or less, subject to a fairly reasonable minimum monthly charge.

HSBC also do free business banking if you get under 20 cheques in or 20 cheques out each month. I would be surprised if other banks do not do something similar.

Colin Bignell

[dom]

Tales of paypal *uckups abound. I've had trouble, and several people tell me they've lost money.

I think part of the trouble is they are not (AFAIK) a real bank, so not governed by any banking regulations.

If paypal have your money, and say "tough" - there's not a lot you can do about it.

[The Medway Handyman]

I have. Think I spoke to Dick Turpin. Outrageous set up fees & rental.

As an FSB member I can get free banking with the Co Op, trouble is the local branch is miles away with bad parking. Local PO is a bit easier. If I could get rid of most cheques that would be viable.

[Steve Firth]

The Medway Handyman wrote: [snip]

We used Adelante MobilePOS to take card payments at exhibitions. It's relatively cheap, you need a Merchant Account that the FSB can help you to set up. There are apps for various smartphones and virtual terminal for payments made when you are in the office. It worked well *but* it was a PITA in remote locations. Customers don't like you climbing a hill with their credit card while you try to get a signal.

In an urban environment or in the office it worked well.

[Andy Burns]

I think the European bit of paypal *is* a bank based out of Luxembourg, I don't know whether that means that banking regulations apply to all transactions though, I get the impression they behave as though they don't.

[Gazz]

Hmmmm, i dunno, people who are computer savvy are wary of paypal, so many stories of them being the judge, jury and executioner with your money,

and people who are not computer savvy, they read in the papers quite often about paypal rip off's, scams and so on, yes most of them are simple things a 10 year old with some computer knowlage wouldent get caught by, but the people reading about these scams dont have a clue as they dont do computers, most likely because they read so much about scams, an want to avoid them, so will never have a computer.

but ask a non computer user to name a dodgy program/application on a computer they have heard about, and paypal would be high on the list, just because it'll be the name flashed about in the papers so much when things go wrong, they'd probably be happier doing a western union transfer to your nigerian account than use paypal.

[Dave Liquorice]

But this is about trying to be one step ahead of the demise of cheques...

HSBC is the business banking I use, because it is free for the use I put it to. Just don't pay cash in over a counter you will get stung a

2% fee, BTDTGTTS.

Barclays (the only other bank local to us) didn't when I was looking.

The same can be said of banks as well, though you can normally get your money back from a bank if you jump up and long and hard enough. It mostly works and works well and is a cheap way for a small trader to accept card payments.

This is true they are a "money transfer agent" or something similar. Don't keep wads of money in your Paypal account as it isn't protected like it is in a bank account.

[Andy Cap]

Despite whatever reputation it has, it seems to be gaining commercial acceptability. Many charities and in the last two days, my wife has paid both ASOS and House of Fraser using Paypal. I think people like it

*because* you don't have to give any card details.

[Nightjar]

Change banks. With HSBC I paid £25 set up fee and don't have any monthly terminal fees.

Colin Bignell

[Tim Watts]

Just had a chat with someone I know in the industry.

You could consider Sagepay (Protex), Paypoint or Google Checkout.

Apparently all will at the minumum allow customer's cards to be put through a web interface on the fly (ie if your mobile phone is useable for the web or you have a 'pad).

The magic phrase to look for is "virtual terminal" or "MOTO payment".

It's possible that Sagepay might have an option for a portable terminal but said person's opinion is that it is unlikely to be cost effective compared to using a web interface.

So it might be worth having a browse of both those suppliers and see what their current offerings are like.

Web interfaces might work best with a tablet rather than a tiny phone, but as a cheap tablet can be had for a couple of hundred it still might be net cost effective.

Sorry - I can't expound on much above as it's all foreign to me - just relaying info...

Cheers

Tim

[Geo]

I have just advised my club to NOT use Paypal since a customer using them to pay for an event does not have any Credit Card protection even though they used their card to pay Paypal. This could cause major aggravation with customers if the club folded before the event took place.

[Nightjar]

You need a specific MOTO Merchant account to use that and SagePay charges are on top of the Merchant account charges.

Not when I used them.

Payments made using the internet have a higher security standard than those using a physical terminal and that includes paying fees to an external auditor to check your computer system for insecurities at regular intervals.

Colin Bignell

[The Medway Handyman]

Thanks for the tip - I'll look into that.

[Lobster]

Don't know anything about Virtual Terminal, but the place to go for All There Is To Know about PayPal - good and bad - is uk.people.consumers.ebay. Inhabited mainly by pro ebay sellers who use PayPal to make their living.

David

[Owain]

One caveat - transactions using Virtual Terminals, because there is no physical verification of the card, usually count as Cardholder Not Present transactions, and these are more easily cancelled by cardholders and carry a greater risk for the trader.

Probably less of an issue for you because you'll usually know where your customers live. It's a slightly greater risk to you than a bounced or stopped cheque because they're usually returned fairly promptly, whereas a card transaction can be queried months later.

Owain

[Justin C]

Contrary to what another has said, I believe that PayPal is still not a bank. Due to it's acting like a bank and sounding like a bank, it was mentioned last year (Radio 4 news, don't recall exactly) that it may be forced to become a bank to protect those on both sides of the transaction.

WRT *real* terminals, someone who posted is very lucky to be paying no monthly rental, the company I manage puts through a six digit sum each month, but we still pay the 15 quid each month for terminal rental. Though our percentage is considerably better than two.

If you find virtual payments cheap enough (higher percentages than being a 'proper' merchant services customer) you'll have to work out where the point at which having a terminal is cheaper so that you know when to change - if your business is likely to grow.

Another poster mentioned the costs of enhanced security, and security audits needed for taking payment through a web-site. Google for PCI DSS if you want the full gory details - it'll put you off, it does me. Here's a link .

Justin.

[Andy Burns]

I don't claim to know the implications of them being or not being a bank, but they certainly do have a banking licence (from the horse's mouth this time rather than a casual web search)

[jgharston]

As a landlord I deliberately /don't/ have a card on my property account, as otherwise I'd end up spending it as "my" money. I prefer to pay my tradesmen or suppliers by cheque or a wodge of tenners.

I also don't have a credit card or cheque guarantee card as they let me spend money that I don't have. I've known my suppliers long enough that they take cheques from me unguaranteed. Admittedly, that doesn't work for previously-unknown customers paying by cheque.

JGH

[Nightjar]

This does seem to be the major problem with the way PayPal works. The card transaction is between the card holder and PayPal and there is a separate transaction whereby PayPal provide funds to the merchant. Therefore, the card guarantee only covers whether PayPal pays the merchant. If the merchant goes belly up, the card holder has no comeback through the card guarantee because PayPal has done what it contracted to do - pay the merchant.

With companies like SagePay, they are simply facilitating the transaction between the card holder and the merchant and the card guarantee covers the transaction between the card holder and the merchant.

Colin Bignell