For the last few years I’ve been helping start ups to setup their payment strategy…. wait what? setting up a payment strategy? isn’t plugging just a Paypal account enough? i use to own a shop, and setting up the registry machine was seamless, why all these hassle?
Well here is the thing… when it comes to remote and electronic forms of payments such as cards (card not present environment) and other means such ACH (automated clearing house), Digital Wallets (loaded by other digital means) and many other forms of payments, we at the payments industry, need to evaluate the risk involve in your idea, similar to a Venture Capital company, that evaluates your chances of success, we need to analyze, various parameters to determine if the better path to follow.
Where do we start?
we start by sending a short merchant application, to understand the essentials of your business, this includes but is not limited to corporate information, commercial information, access to your product and team members.
However is that really the beginning?
From my experience no, bringing your startup too early to the payments realm is usually a mistake. the main reason is focused on some of the signals that are being used to corroborate your online presence… so where really to start?
Most of the successful merchants that i had the pleasure working with have the following things in common
- Are able to start their promotion at a local level
- Have been able to create a certain brand name, before going full core on eCommerce side.
- Have been able to test the “sales” flow and improve the weak links.
Why is this important?
Because it shows you have control of your business process and even though you may not have experience in the deeply regulated, penalty driven world of payments; you are less likely to enter the trouble zone.
What is the second step?
Prepare a business plan, and don’t take this task lightly. The business plan should answer most of the potential questions arising from the initial scrub. For example we see you have a lot of cross-border (international) traffic. would you be planning selling in these places? how would you be shipping?. A well prepared business plan would show that you already have these diligence covered and a better one would show a successful shipping order to a local office.
Along with these lines make sure all the required documents are in place, if you need a license or special permit to operate make sure you can provide a copy; proof of your business existence (utility bills) and other required information.
A well presented package (not necessarily, hundreds of junk pages), is imperative for a good impression, the time frame to present all the requirements should not be over one week.
On to step number 3?
this is usually where most start ups get disinterested, is related to the commercial offer and the payments imposed flows
The commercial quote: if your business model posses an eventual risk or the target market can be considered as risky, it is likely you will not be receiving the lower side of pricing, simply because more tools need to be implemented to safeguard your business (and these tools come for a price), however there is no need to be discourage, as time passes and your business performs these quotes are likely to go down or you will have better history to apply elsewhere.
The payments imposed flows: this is a tricky one, because usually is the part your PSP (payment service provider) understands and you don’t. and it concerns with certain stages that a transaction can be driven thru such a VBV/3ds verification or an auth/capture protocol. Here is what separates a successful company from the pack. Payments realities change and to your surprise they change a lot, if its not regulative, its technical else is security and sometimes is commercial. to provide a stable environment you need to be able to accommodate these changes, evolve with the times.
why do I need to evaluate the integration document (AKA API)?
The API is the segment that connects your system (CRM, Cpanel, ERP and others) to the payments secure platform, you should make sure you have control or control of action, from your system in to allowed operations such as refunds and chargeback updates, real time interconnected statuses so your business and your billing are in sync.
Of course there are many particularities in what it refers the DNA of your business and the DNA of a payment institutions, one size rarely fits all. But don’t worry that part leave it to us…