How to get Paid Digitally
The way to get paid digitally locally is best described as fragmented, but it’s not unnavigable. This is part two for my previous article on why now is a good idea to get an e-commerce site. You can read that here first.
Note at the time of writing this article the Government created a “Post Covid 19 Reconstruction” committee. This committee’s mandate is to, amongst other things, help further along the country’s ability to do more “touchless” and “contactless” transactions for the near future. This means that the information here would change soon and I will update it as needs fit. Yet as it stands this is the payment gateway solutions available and recommended.
In this article I’m going to talk about Joe, Mary and Sue. Business owners all, who have made the leap to online selling. I’m using these fictitious people to help clear the murky waters of online payments. Most of my clients fall into one of these three categories. I’m not going to discuss pricing for each other payment systems. I will put a table down below that gives you an idea of cost, ease of set up and levels of security. Everything here is subject to change, and most solutions are nothing more than “workarounds” since our local legislation does not easily allow for electronic transactions especially across borders.
This is Joe, he sells t-shirts printed in his home and sells after work and on weekends.
This is Mary. She has a brick and mortar store for the last 20 years in a mall that is quite successful selling Kitchenware.
This is Sue. Sue is the new head of distribution at a large conglomerate that distributes goods of all kinds.
All three of these have a problem. Their customers prefer not to buy from them in a physical sense. Covid 19 in recent weeks, especially, has changed the landscape. There is a change from personal sales to calling and WhatsApping as the prefered way of doing business. People would prefer you deliver. They are willing to pay, but only online. They feel safer now with a “contactless” means of payment. In fact some only have cash and will pay for the delivery. So what do you do?
Joe’s T shirts: Small Business Big Plans
Joe has a website. Yet all it is a slight upgrade to his Facebook page (where most of his orders come from.) It’s an online showcase or catalogue of his designs. Set up with a free WIX template, it’s not designed, nor does it have the functionality, to be a true e-commerce storefront. Using their phones, people take a screenshot of the product on the website and send it via whatsapp. The whatsapp contact is missing from his website. It’s a long laborious manual process. Joe spends more time missing orders, and trying to get simple details correct. Then there is of course payment on delivery. This funnel is fraught with difficulties.
Upgrading Joe’s website requires a new front end and flow study. How do people interact with him now and how would we like them to change their behaviour. Also making sure new users understand how to buy. Nowadays most people have an understanding of how websites work (Home, contact, menus, sections, pages etc). The trick is to give them an ease of purchase. Once this is done, we install a payment system. Joe’s payment processing is PayPal with Paywise and Cash on Delivery.
Why did we choose this?
PayPal is free to set up. It’s also very easy to use. The learning curve is low and the returns will be high. How does PayPal work for Joe? The customer chooses a way to pay when they press “buy now”. They choose Paypal. PayPal then takes over. Directed to PayPal’s site the customer can then pay using an existing credit card. PayPal can use most credit cards, but you can only RECEIVE money with a VISA Credit Card. This is no problem for Joe. He had applied for a credit card while working at his job. He plugs that into his PayPal account and he’s ready to receive money. The drawback to this is you can’t actually get cash from PayPal. The money is now locked to your credit card. Withdrawing cash invokes hefty fees. But in Joe’s world, he can then pay for supplies and so on with his credit card using PayPal. The closed secure system simplifies his life.
Paywise is a good compromise for Joe and for people who cannot pay using PayPal and a credit card. Also it limits his exposure to risk by accepting cash on delivery. PayWise is a very simple process. The customer goes to a Paywise outlet (usually in a Pharmacy, or store) and pays the cashier. The cashier then gives the customer a code, this code they take a pic with their phone and whatsapp or email to Joe. Joe then brings or has the product delivered. Unfortunately, in these days of Covid 19 its not a good system. But its the ONLY way to secure cash and be safe with handling cash transactions.
The more choices you give your customer to pay, the better you are at making that sale. Remember: the easier you make it for someone to pay, the better it is to close the sale.
Mary’s Kitchenwares: Medium businesses have a solution
Mary has been selling kitchenware from her store in one of the local malls for over 20 years. She’s developed quite a loyal customer base. She’s been using email and social media effectively to bring people to the store for specials and event type sales. Mary invested in a new line of branded kitchen utensils. It’s huge, she is the sole distributor in this region. The franchise has given her access to their online e-commerce solution, but she needs to create a payment facility. She finds a developer and they decide that these are their options. PayPal, Wipay/Buzzpay or Social Pay and First Atlantic Commerce.
We’ve already discussed PayPal before. So let’s dive into WiPay. WiPay is somewhat like Paywise. You set up a merchant account with them and pay a fee for them to handle transactions. Customers can pay in a variety of ways. This includes credit cards, cash and even using the LINX system (soon they say). This is very handy for those who use bank cards that do not have credit facilities. They also use a “coupon code” system.
More about WiPay
Wipay is a good solution for the medium/small businesses. The service and support of WiPay for the initial set up has been known to be problematic. I have heard that the customer support is iffy at best. You will need a dedicated person to stay with WiPay and have your service set up. For startups this is a barrier to set up, but once it’s set up, it works well. If you choose to go the route of WiPay you will need a developer to help do the heavy lifting in the beginning.
Why First Atlantic Commerce?
First Atlantic Commerce (or FAC) is the safest, most reliable way to do payment processing. Most if not all the big companies use it. It’s not out of the reach of a medium business like Mary, but it is a costly system, both in time and money. First Atlantic was the first to try to bring real e-commerce payment systems to the Caribbean. Lacking a proper government framework for online interbank processing, First Atlantic has partnered with some of the major credit card companies such as MasterCard and VISA to provide a “stop gap” measure for payments online. When you set up a First Atlantic merchant account you need to pay a fee for them to manage the transactions. Then you need a developer to write the code to process the credit card payments through their system. This requires weeks of testing as the Credit Card companies have to ensure that your site is secure and capable of processing bonafide transactions. It’s a long laborious process. Yet when finished and working you will have something no one else will have: a secure badge.
What is a “Secure Badge”
A Secure badge doesn’t mean you have a nice MasterCard logo on your site. The secure ‘brand” makes it easier for crawlers like Google to push you up in the rankings. As a trustworthy e-commerce site you have the ability to say you’re secure. It gives you an added edge of attracting customers to the site and buying from you. This is good SEO business and will help you in the long run. To be able to use FAC you need to have an SSL certificate. Suffice to say Google ranks sites with SSL certificates higher. Read more here: https://trendyminds.com/blog/find-out-how-secure-websites-are-affecting-search-traffic
Sue’s distribution dilemma.
In the case of Sue, we have a large inventory and a system that has to tie into an existing backend. It’s designed for large orders and for sales people reselling. In this case the simplest thing would be for Sue to contact their bank and open a merchant account. With the banks system they can process orders and be charged accordingly. First Atlantic Commerce can help with this as there isn’t going to be a “credit card” system. But a PO and invoicing system, paid per month by the reseller. In this case Sue will need a tech who knows how to integrate both systems
This is not an easy situation. Most point of sale systems at this level are like frankenstein monsters of cobbled together code from as far back as the turn of the millennium. The challenge will be building a new system on the back end to do what Sue’s hoping to do: automate the large bulk sales. This goes beyond the scope of most e-commerce developers. But there are existing plug and play systems that you can use online. The challenge is integrating the secure connections with the bank. So far banks have been slow in pushing for more online business to business transactions. The legislation isn’t there yet to standardise this. Each bank does it and each has to answer to the Government’s FIU. This is to halt the spread of money laundering and other nefarious transactions. It’s not an easy answer but with Covid 19 we’re getting there as changes need to happen, and soon.
Explanation of costs for various payment platforms:
|PayPal||Up to 10% charge per transaction.|
|WiPay||There is a standard processing fee of TTD $2.00 + 3% of the purchase value for payments made by credit card*. The processing fee is deducted at the time of payment.|
|First Atlantic Commerce||Minimum charge of $180 per month* plus up 10% transaction fee at bank|
|Direct Money Bank Transfer||Up to 10% charge per transaction.*|
|Cash on Delivery||No cost|
How much is this all going to cost?
With all this talk on which payment gateways are right for your business, we haven’t gone into cost. At the most basic level the cost is negligible, but as you scale up the costs become greater. For example Joe’s business overheads to install a payment system would cost much less than doing one for Sue. The most expensive route, but one that would ensure the best solution, is of course First Atlantic and you’re looking at between US$500 and up to install that. However to install Paypal would set you back up to US$50 and up plus maintenance. The payment portal is part of a bigger project of your website. It’s not just the backend, its the front end, so understand the reason for the costs.
So are you a Sue, a Joe or a Mary?
With all we’ve discussed it’s clear that things need to change. This doesn’t mean you should throw up your hands in the air and despair. There are ways and means of making money online but it’s not a quick and easy way. E-commerce requires work and attention. Don’t get me wrong, there is a lot of automation that happens that will make life easier. But in truth and in fact, if you can’t get paid, then the whole endeavour is pointless. So if you have the ways and means to use the First Atlantic System, I would recommend that. It will work out better for you in the long run.
If you are now starting out then PayPal and a VISA Credit Card will suffice in the short term. Unfortunately, there are problems with WiPay and others, which create barriers to adoption. It comes down to what you’re willing to spend and the level of frustration you are willing to invest in. There are many options, but very few choices. Finding what’s good for you may be simpler than you think. You need a champion to handle all this for you. That’s the simplest solution.
Ian Reid is the manager and CEO of ReidDesigns.pro. He’s been building websites and doing digital marketing from the time the internet was born. If you need to talk to him about this article or doing business in this time of uncertainty, then leave a comment below.
What are some of the issues you’ve found with WiPay?
Hi Jetson. The issues are really customer service related. WIPay basically uses a FAC plugin, the approvals still remain. Sometimes, in the past, they have been very slow to answer emails, calls etc. Its been getting better, but like I said, once you get everything working, it works well. Hope that answers your question. Thanks for the comment.
This was very useful especially for newbies like me. I recently had to ask someone on LinkedIn about this.. I still can’t understand how in an economy where exports and the related foreign exchange earnings are so critical, the financial and legal system still hasn’t committed to making international e-commerce attractive.