
Taking payments online in Europe in 2013 - jmaskell
http://jamesmaskell.co.uk/2013/online-payments-in-2013/
======
patio11
_Vinetrade has the kind of business model that scares banks and card payment
providers. We trade high value goods (prices in the region of £1.5-20k) that
are rarely delivered to the buyer (they're stored in remote warehouses)._

I love virtually all startups and wish for their success. That said: I'm
thinking that when every bank in Creation was saying "We won't take CC
payments for that. No, no, you simply can't convince us that is a good idea."
they were actually being appropriately conservative about legitimate operation
risks uniquely incurred by this business model.

If you don't have a Fraud Guy, I respectfully suggest either hiring or
training a Fraud Guy _very, very soon_ , preferably before enabling any form
of credit card payment. Your Fraud Guy is going to have some recommendations,
including recommendations which meaningfully interfere with the product team's
ability to meet user demands. If you do not listen to your Fraud Guy's
recommendations (or, regrettably, even if you do), you may eventually get an
expensive lesson in why both BigCo and startups in related fields eventually
have to hire a/several/an entire department of Fraud Guys.

One of your Fraud Guy's first questions is going to be "Is there any pathway
by which I can take a credit card and turn it into cash using this service? If
so, what is the timeline on that?" I am not a Fraud Guy, but I count two ways
to cash out credit cards, just reading the website FAQs. If you are discovered
by the adversaries to be the weakest link in the UK financial system with
regards to cash outs, you can expect heavy, dedicated adversarial interest.

~~~
jmaskell
There were two big problems with the banks:

1\. A number of wine investment companies took card payments but never bought
the wine. So the bank was liable for the money lost in those situations - and
as a result that put a blanket ban on all fine wine companies. We were able to
talk Barclays around on this.

2\. Storage of wine would be handled by a third party warehouse. If they
screwed anything up (e.g. broke the case, had a fire, and insurance refused to
pay out), there was a chance that buyers could get the money back through
their bank if they paid by credit card.

and for us when we did accept this:

3\. Getting the fees to work with our model - we wanted to offer a fixed fee
for trading cases, but all banks / payment services wanted to take a
percentage, including for debit card payments (hence my point about doing more
work to get the model to work payment charges).

Obviously fraud is a major concern, and is something that we do a lot of work
on as we scale up (e.g. at the moment we're manually processing all orders,
taking ID for anyone buying more than £10k total etc). It's not something that
we're naive too and we're definitely not going to launch a completed automated
system without adequate processes in place.

~~~
steve8918
2) If you're talking about chargebacks, it would be YOU that the buyers would
be charging back the money from, not the warehouse, since you were the
merchant that accepted the payment.

And am I right in that you are basically saying that the buyers take on all
risk of storage at the warehouse facility? If so, you should probably outline
that as well, including what the insurance policy of the warehouse, covers,
etc.

~~~
jmaskell
I should have been more accurate - the bank would be liable if the customer
charged back and couldn't reclaim the money from Vinetrade (e.g. we'd ceased
trading).

There isn't huge risk for the buyers - all wine in the warehouses is insured
at full replacement value. It's more of a hypothetical "what if" or worst case
scenario.

------
mootothemax
Not to forget the other half of the story: issuing invoices.

In Europe this can quickly become a pain, not only due to the extra
information you need to collect (names, addresses and so on) but especially if
you also need to collect Value Added Tax (VAT). This means asking for VAT IDs
for companies - if they have them - and then calculating the tax based on
whether the customer is in the same country as you or not. The complexity can
rapidly descend into madness.

I have the added fun of having to issue bilingual invoices written in both
Polish and English. Well, they could be only in Polish, but then the majority
of people wouldn't understand them.

In the end, I bought a ready-made solution (<http://nbill.co.uk/>) which,
whilst not being one of the most intuitive pieces of software I've ever used,
gets the job done.

~~~
Silhouette
Oh, VAT, how I hate you so! You'd think if the tax authorities were going to
saddle us all with worrying about other countries' VAT rules, they could at
least provide a list of the ISO country codes and applicable tax rates we need
to charge in a format that could easily be imported into a database. Some sort
of simple automatic notification system for when the rules change would be
useful too. At least that way, every small business in the known universe
wouldn't have to write the same bunch of SQL after looking up the same details
when they eventually found the same web pages, and then worry forever
afterwards that something had changed and they didn't know and would wind up
inadvertently committing tax fraud or something.

~~~
mrkmcknz
So I sell a simple SaaS service and asked my accountant one question.

Do I charge VAT. Here is his reply:

" Vat rules You need to identify B2B and B2C UK, EC and outside EC customers.
A vat registration number is usually accepted as evidence of B2B.

1 All sales outside the EC have no vat implications and are ‘outside the scope
of vat’.

2 All sales to UK customers (B2B and B2C) have UK vat to apply to them and are
standard rated.

3 All B2B sales to EC customers have no vat and are ‘outside the scope of UK
vat’.

4 All B2C sales to EC customers have UK vat to apply to them and are standard
rated.

There is a further twist. If you can identify where your service is
effectively used/enjoyed, then If the place of supply would be the UK (2&4)
but the service is enjoyed outside the EC, then no vat (outside the scope) or
If the place of supply would be outside EC (1) but the service is enjoyed in
the UK, then UK vat applies."

~~~
mootothemax
_All B2B sales to EC customers have no vat and are ‘outside the scope of UK
vat’._

Interesting. I was under the impression that EC B2B sales were zero-rated only
for companies that are VAT-registered. This is why we grab and validate a VAT
number for each EC company that we issue an invoice for.

That said, God only knows how this might tie into the living hell which is
Polish bureaucracy.

~~~
theallan
You need to be able to prove that the purchase is B2B rather than B2C, and the
easiest way of doing that is to get the buyer's VAT number. You could still do
B2B without a VAT number, but you need to be able to prove that the buyer was
a business if the tax man asks about it.

~~~
mootothemax
Ah, ok, thanks, that makes sense :)

(well - "sense" is relative when it comes to all these VAT rules...)

------
jamesjgill
I can't wait for Stripe to get over here - fingers crossed this will happen
soon. And from what I'm hearing, it may not be too far off. We've integrated
with Recurly (with Sagepay as our gateway) for our recurring subscriptions at
GoSquared, but the experience has been one I would hate to endure again.
Thanks for sharing your experience James!

~~~
webignition
What are you hearing that suggests Stripe may not be too far off?

I'll soon be in the process of adding payment options to a new UK-based
startup and really really really want to believe that Stripe will be an option
for me in time.

~~~
jamesjgill
I wasn't expecting this response, as I had heard from other sources previously
that their best bet for UK / European expansion would be to buy out someone
else, but I can't really argue with this:
<https://twitter.com/cjc/status/292350613939953666>

~~~
buro9
I've been getting "soons" since November.

I asked only a few days ago how soon is soon, to which no-one will actually
answer. But the Stripe guy did say that he agreed that we shouldn't wait... go
implement something else, and then they will help people move to them post-
launch.

So don't not launch something in the UK because you're waiting for Stripe.
Launch with GoCardless, launch with PayMill, hell... launch with PayPal if you
have to.

Getting money through the door should be the only focus, not waiting for other
people.

~~~
mmahemoff
I'm thinking of using PayPal, but only for a one-off 1-year (or N-years)
subscription payment, so there's no legacy to deal with once Stripe arrives,
and a simpler integration. At the cost of losing some of those early
subscribers later on.

~~~
jusben1369
At the risk of being repetitive check out Spreedlycore as another way to work
with or switch between gateways as solutions you prefer become available.
<https://spreedlycore.com/>

------
stevoski
Every time I see an article along these lines, I can't figure out why software
startups don't just use a third-party payment processor like FastSpring or
Avangate. It makes all these complications go away.

Outsource anything you can, especially the things that others can do much
better than you because it is their core business. Payment processing is
definitely one of those things.

I started my software company in Germany and have always used a third-party
payment processor.

~~~
jusben1369
PayPal, PayMill, Braintree etc are all 3rd party payment processors. So I
don't quite understand your distinction. I believe FastSpring may mean you
avoid having to get a merchant account directly so perhaps that's the
difference you see? The biggest objection I've heard is the 9% flat rate they
take vs 3% and 30 cents per transaction that you'd roughly see from a payment
processor.

~~~
stevoski
The cost for a payment processor 3% and 30 cents per transaction PLUS the
costs (time-related, development-related, support-related) to manage to obtain
a merchant account, deal with VAT, fraud detection, a nice customer
experience, and many other things. For startups you end up way ahead by NOT
rolling your own solution to this and other problems.

~~~
mattmanser
9% of your _turnover_ vs ~ 3.1% of your _turnover_.

You're a mad man to pay that much. It's a right pita, but it's not worth 6% of
your company.

~~~
stevoski
Let's get the comparison right.

FastSpring charge me 5.9% + 50c A merchant account will cost me 3% + 30c.

My software sells for $69. So it is 6.62% vs 3.43%. Actually it isn't.

The comparison is (6.62%) vs (3.43% PLUS dealing with all those VAT issues,
fraud detection, fighting and/or wearing chargebacks, coding and maintaining
the payment system, allowing direct bank transfers in countries where
consumers prefer them, and many more things).

~~~
fastspring
When you look at the service and functionality you get in exchange for paying
more, you realize that in reality FastSpring actually means paying less,
earning more (profit). Take a look at the FastSpring or SaaSy features pages,
and as you go through the functionality and services listed, think through how
much time it would take you to develop the same functionality on your own
(years), how much more revenue you'd earn from day one by using this already
existing global online selling functionality, how many distracting obstacles
you get to avoid (try setting up on your own to accept foreign currencies and
have your order page language-localized, not to mention to be able to manage
global taxes and be in compliance on all global sales), the expenses you avoid
taking on (you dont pay chargeback fees, you don't need the support or dev
staff members you would otherwise need, you dont need to pay for file
hosting), the risks you avoid (we are the merchant of record, not you, we deal
with fraud and PCI compliance, you outsource to us potential company-killing
risks like how credit card numbers are stored (btw we store none), the list
goes on and on...

------
obeattie
We recently switched to Braintree from PayPal Payments Pro. While we're not
"small," (>£10million/year) the process was largely painless and I can't
recommend them enough. We also needed to take AMEX cards and found setting
that account up extremely easy (though we already had an AMEX account).

The only thing that does seem slightly annoying is all their support and
accounts people are in Chicago, meaning the inevitable back-and-forth can drag
on for way longer than it should for merchants based in Europe. Hopefully this
is something they will get ironed out once they have some significant traction
in the EU.

~~~
jusben1369
Did PayPal give you back or help you transfer over your stored customer credit
cards?

~~~
obeattie
Nope. We operate primarily on a recurring subscription basis, so we're just
having to maintain backwards-compatibility for those customers currently on
PayPal.

To be honest, PayPal could not have been less helpful at any step of the
process, both before we were wanting to switch and during the process. They're
a total nightmare of a company to deal with.

~~~
jusben1369
Yes I ask because we see a lot of companies stuck in that bind and ultimately
running two processes for quite some time. Well at least the worst is by far
behind you.

------
return0

      Unfortunately PayPal is pretty much an unregulated bank and
      there are a number of horror stories about them closing accounts, 
      freezing funds and making life very difficult for entrepreneurs.
    

Actually, in Europe, paypal IS a registered, regulated bank in Luxembourg.
That, to me, makes it more credible.

~~~
gambiting
No normal bank can hold your founds for 180 days for "review". If any bank in
any EU country tried to do that, they could get sued to hell. Yet paypal can
get away with it, but how? I don't know.

~~~
dangrossman
The 180 day hold is standard practice. Virtually all US merchant account
agreements have clauses specifying when a reserve account, holding part or all
of the merchant's transactions, will be established (when? at the processor's
discretion, really). If the merchant is terminated, funds in that account are
held for up to 180 days to cover future chargebacks. PayPal inherited that
from the two banks underwriting all their accounts -- Wells Fargo NA and JP
Morgan Chase. The policy predates PayPal's founding, and isn't anything
unusual.

------
zimbatm
One big missing pain: EU VAT taxes.

According to the law you're supposed to tax EU customers if your business is
in the EU. Obviously the tax is different for each country and changes from
year to year: <https://en.wikipedia.org/wiki/Tax_rates_of_Europe> . Businesses
with a VAT ID can be exempted from the tax but only if they provide a valid
VAT ID. At the end of the year your business then provides the list of
transactions and VAT IDs to your state with the tax form and the state takes
care of forwarding the taxes to the other countries.

According to the law you're supposed to check the validity of that VAT ID and
because the data changes over time they provide an "API":
<http://ec.europa.eu/taxation_customs/vies/faqvies.do> That API forwards the
query to country-specific databases and these databases go down. From their
FAQ: "Some parts of the system may be unavailable at certain times due to the
necessity to back-up the Member States' databases." Year right.. From my 1
month experience I've already seen two outages, one of them lasting a full
day. And I'm not actively monitoring the service.

I've also had customers from Spain and Germany ask for their VAT ID to appear
on their billing recipes, because of regulations again. It shouldn't be a
biggie but Chargify doesn't support that field so I have to ask customers to
use their Billing Address 2 field instead as a hack.

These are still things that I haven't figured out yet:

What happens if you provide invalid VAT IDs in your tax form ? I don't want to
loose conversion because a state-owned service on which I have no control
doesn't work properly.

I've read in multiple places that if the customer is in your business' country
the rules are again different but I have no idea how.

~~~
petercooper
As far as I understand it, you _can_ check and are expected to observe and
note anything odd about transactions with supplied VAT numbers but AFAIK - and
I'm not a lawyer! - there's no law that you _must_ check every one. (Note:
This may be a UK specific interpretation.)

However, if they turn out to be false and the tax man comes back to you, you
could be liable for the VAT. Depending on your sales profile, you might
consider this an acceptable risk - I certainly do (I get perhaps 10
transactions like that each year).

~~~
zimbatm
Thanks. We'll see at the end of next year :) (UK-based too)

------
PanMan
Anybody used Paymill yet? Their docs all look fairly straightforward, and I'm
strongly considering them for a project, but I'm interested in the experience
of others.

~~~
nulluk
We applied and simply got a rejection email with little to no explanation of
why we got rejected which is disappointing. I'm going to try and open up
communications with them again to see if we can reapply now that we are fully
trading (unfortunately through paypal)

    
    
      The evaluation of new applications in order to accept credit card payments is subject
      to strict compliance rules and risk regulations in Germany. Our current acquiring 
      bank has declined your contract for some reasons with regard to their risk and compliance 
      management guidelines. We do not receive any detailed reasons from the bank.
      This is why we cannot give you a better explanation. Unfortunately, 
      Paymill does not have an influence on that decision.

------
omd
Going by the title of this post I was hoping it would give a solution to the
segmented payment market here in Europe, but it doesn't. A more fitting title
would've been "Taking payments in the UK" or Taking credit card payments in
Europe".

The main problem we have here is that debit cards are a preferred payment
method and each country has it's own system. From my experience and other
reports I've seen up to 30% of the customers will use a debit card if that
option is given. I don't know how many of them would cancel the sale if debit
payment isn't possible.

Unless I'm mistaken only WorldPay offers some of the local debit cards, such
as Carte Bleue in France, Bancontact in Belgium and iDeal in The Netherlands.
Paymill seems to be the only one to offer ELV in Germany.

~~~
bad_user
Could you explain a little bit more about what's the problem with debit cards
in Europe?

I have a MasterCard debit card with which I never, ever had problems making
payments and I have made such payments, either direct or through PayPal,
Google Wallet or iTunes. Before this I had a Visa debit card issued by the
same bank (Groupe Société Générale). Before this I had another debit card
issued by another bank.

All of them worked, all of them debit cards, as indeed credit cards are not
really popular here. Should mention that I'm from Romania and this debit card
is linked to my bank account (are you talking about anonymous debit cards or
something?).

~~~
Xylakant
A mastercard debit card works much like a credit card. In germany for example,
your standard "debit card" is your banks card and in online transactions, you
just enter bank account and the banks identifier. It's a legacy way of paying
that dates back to the eurocheques. It's comparable to the Card Bleue in
France which is a system that exists pretty much in France only. This
fragments the market.

~~~
bad_user
OK, so you are talking about a different kind of debit card of which I have no
knowledge. Romania was late in this world of online transactions and credit
cards so we must have skipped this legacy somehow.

I also don't understand why VAT isn't the same everywhere in EU. So yeah,
Europe is a mess.

~~~
Xylakant
Even worse: VAT is not the same depending on what you sell:

Foodstuff in general has lower VAT (7%) in germany, but that lower tax rate
includes also hotel bills, but not the breakfast which is taxed at the regular
19%, taxi bills are reduced, etc. It's a mess. When you sell services in the
EU and the service is rendered in another EU country and for a company with a
valid Tax ID you don't have to pay VAT, which includes Switzerland (although
they're not EU) and so on.

------
burgreblast
I don't understand why you would consider using Braintree in Europe (or
anywhere) vs. going to Adyen directly.

The Adyen guys are smart, their technical platform is simple and robust, and
unlike the Stripe/Square/Braintree guys, Adyen actually _does_ the processing
so they can offer better rates and are suitable for huge volume.

About the only downside is that "At-jien"'s b2b marketing is pretty terrible.
They have some faux Apple videos on their site which I think undermines their
technical sophistication.

~~~
floris
It's surprising to see how little people mention Adyen in this thread. One of
the big benefits of Adyen is that they also supports many more payment options
besides credit cards. For example: Paypal, iDeal, Card Blue & SOFORT
Überweisung. If you're serious about receiving payments from consumers in
Europe, supporting these is pretty much a necessity.

------
petercooper
I'm in talks with one of the others on that list because I need Amex support..
but in the UK PayPal also do a tier called "Website Payments Pro". It's not
the same as a vanilla PayPal account and includes a merchant account and API
for doing card transactions. You have to go through screening to be accepted
and I've found them to be very professional and helpful (as in, a far better
service than the vanilla PayPal service). Only downside so far for me? No
Amex.

~~~
nodata
Who is using Amex? Corporates?

~~~
petercooper
In my experience, a lot of people who work in large companies who have
authorization to spend decent money do. They can often get hold of a Visa or
Mastercard instead but it seems to be more hassle to get authorized by a
higher-up.

Personally, I have an Amex too and I'm not rich or special but maybe it's
different in the UK. I use it because I get a ton of airmiles and Amex never
seems to get rejected or stopped for fraud checking purposes.

~~~
justincormack
It is different in the UK. Amex is not widely accepted. The charges to the
merchant are very high.

------
calpaterson
> [Paymill] also require some business information and identification from
> you, but this does not appear to be particularly stringent

Actually, speaking from personal experience, it is particularly stringent. I
had to give up in the end because the bureaucracy was taking too long.

From memory, you need a tax identification number, your VAT identification
number a scan of your passport, to display your name and home address on your
website and you need to post it all to Munich. I suppose this doesn't sound
like too much but in the UK you have no reason to have a tax identification
number unless you're self-employed and already trading. In the UK you don't
have a VAT id unless you're making £77k. Outside Germany showing your home
address on the web is considered a bit crazy. Consider now that if you're
trying to get Paymill to authorise you are probably are not trading yet. It's
not that appealing and I would recommend against it unless you have time to
spend exchanging emails with customer service representatives who have a poor
command of English.

Paypal's (admittedly lame and APIless) method of payment acceptance is to copy
and paste a button.

------
skrebbel
I had never heard to Braintree, even though it seems like a just-as-mature and
very comparable competitor to Stripe. Also, plenty fast-growing companies seem
to have heard of them anyway, cause they're using them. What's the secret? Is
it all just marketing, where Stripe markets though HN and the likes (so that
people like me hear about them) and Braintree uses, say, sales people? Or have
I simply been sleeping?

~~~
simonw
Braintree have been around for quite a while (they launched in 2008, so
they're older than Stripe) and have published some fascinating things about
how their technical architecture works:
[https://www.braintreepayments.com/braintrust/scaling-
postgre...](https://www.braintreepayments.com/braintrust/scaling-postgresql-
at-braintree-four-years-of-evolution)

------
jusben1369
SpreedlyCore is another path to go down. It's a cloud based credit card vault
that connects to 40+ payment gateways with a good API and docs. We have PayPal
Pro customers who use PayPal for processing but develop against our API. We
support GoCardless as well. Due to the fact we vault your cards away from the
gateway you can change or add a gateway at anytime. I work for Spreedly who is
behind SpreedlyCore.

------
pathy
What about using Klarna (<https://klarna.com/>)? Admittedly not credit card
payment but also decreases risk as they take on the risk, according to
themselves.

Reputable company based in Sweden so no dealing with American companies - more
suitable for European markets.

~~~
ersii
Indeed, I thought the same.

It's in my opinion more costumized for the European market - they _can_ handle
credit cards - but they also have setups where they buy the invoice from the
merchent and handle the payments and stuff like that.

It's extremely widely used in the Swedish online merchent business world. And
they're available in most European countries it looks like.

------
lflux
Paypal is actually a regulated bank - it's registered in Luxembourg so it can
do business in EU.

------
JoelJacobson
It's easy to forget, just offering VISA/Mastercard won't be enough in a lot of
European countries.

Online bank e-payment is the preferred method by customers in quite a few
European countries.

Most PSPs only offer bank payment services requiring the merchant to sign up
with each and every bank in each country, but there are a few PSP where you
only need ONE single merchant agreement to offer payment by bank in _all_ the
countries the PSP provides.

List of payment companies offering online bank payments via single merchant
agreement:

Trustly.com: Spain, Sweden, Finland, Estonia and Poland Payment-Network.com:
Germany, Austria EUTeller.com: Finland

If you know if any additional online bank e-payment companies covering
European countries, please reply. Thanks!

------
dewey
Interesting article. We are using Paymill and it's very easy to use (official
extensions for Magento and other eCommerce systems). Our old payment provider
was a pain to work with (uploading excel tables to process the payments...).

~~~
nulluk
Does the official extension do everything you require? We have actually just
released a magento extension for Stripe and were looking at porting it over to
Paymill but after some research figured out they had an official open source
once so we are trying to determine if it's still going to be worth the time
investment.

~~~
dewey
Yes, we are just running a small store though so I don't really have a lot of
special requirements.

------
kybernetyk
I'm seeing a problem with Paymill: They clearly were built by Rocket to get
acquired (possibly by Stripe) in the future. So I'd be careful with
integrating their services as those services might be acquired and shut down
anytime.

~~~
white_devil
Whoever acquires them is not likely to throw away all the money Paymill's
existing customers bring in. It's not like your typical Google acquisition
where the original product just dies.

------
Silhouette
Agreed, the effort required to collect payments is absurd for a UK start-up
today. I haven't added up how much time we've spent just trying to find a good
way to let customers pay us, but I'm quite sure we would have launched long
ago if we'd had a simple no-brainer option and spent the rest of the time
building our service instead! As it is, we've been looking into options for
months and nothing is perfect.

For us, GoCardless win in every respect except for scope: the bank accounts
they can charge have been limited to UK only and are just starting to expand
out to other countries in Europe, but global sales aren't possible for now so
you need at least one other option if your customers are worldwide. No
complaints so far in terms of integration, support, fees, or legal terms
though.

Braintree is our other current plan: there's a multi-week time lag and the
hassle of providing significantly more information up-front when you apply,
but like GoCardless they seem to have good support and the information they
ask for doesn't seem to be unreasonable, just time-consuming. Also, unlike a
lot of payment services, their legal terms were quite short and so far red-
flag-free. The fees aren't bad, but they need to sort out their presentation
so they don't refer to obscure bank interchange rates rather than giving a
straight answer on percentages, and the minimum monthly fee just to sign up is
expensive if you're only expecting a modest number of customers in the early
days. They do have some serious limitations in their fraud protection that
make us wary of chargebacks, such as not supporting 3D Secure and the
liability shifting that should go with it.

We've considered numerous other options, including most of the ones mentioned
in the article, but ruled everyone else out so far.

PayPal is a non-starter due the fact that on their new web site it seems you
can't even look up basic details without signing up for an account and all
that goes with doing so. Combine that with a well-documented history of poor
customer service and some dubious terms last time we checked, and for us
they're not a serious contender. The one thing you can see before signing up
is the fees, which are high even before all the nasty extra percentages they
can add on if you look carefully enough.

Paymill should be a much better option, but I simply couldn't understand their
legal terms, so they've rule themselves out immediately. If they want
companies like us to look at them, they need to hire a lawyer who speaks
English, and then they need to write terms that are clear enough that we could
confidently accept them without paying a small fortune for a lawyer to review
them in detail. The Rocket relationship doesn't inspire confidence about them
as a long-term partner for such a critical business function either, though
that could be overcome.

We did consider a couple of traditional payment gateway + merchant account
set-ups, and actually there seem to be some quite decent payment gateways
these days in terms of service, fees and integration options. However, the
heavyweight merchant account guys seem to be so risk averse and offer such
absurd charges and waiting periods that we're not going to waste our time
applying and sitting around for a month or more for an answer in case they
deign to work with us.

As an extra data point, we also considered outsourcing the entire payment
collection process to FastSpring. They were expensive and their system didn't
seem to have a lot of flexibility, though in return they did seem to offer to
do a lot of the set-up work we would otherwise need to do ourselves. The deal-
breaker here was that we got the feeling they didn't really understand the tax
and data protection rules in Europe and that gave us little confidence that
their system would cope with our statutory obligations. This was quite a while
ago, though, so perhaps they've improved more recently, and in any case they
might be a better fit for people with a different business model.

Bottom line: For us, GoCardless is a clear first choice, and then once we're
up and running we'll look at applying for Braintree to broaden our reach, as
they want to see a bunch of stuff when you apply that we'll have done anyway
by then.

~~~
fastspring
Re: tax and data protection rules in Europe, over 1/2 of our clients are
located outside the US, the majority of those in the EU, and so we have been
handling the key EU issues (VAT, euro payment methods & currencies, EU
language support, etc.) for some time now.

In terms of cost, there's a major distinction in that FastSpring's pricing of
5.9%+$.95/txn or a flat 8.9% is inclusive of the cost to process credit card
and other transaction types globally (typically costs 3-4%+ of every
transaction including chargeback fees when you get your own merchant account,
assuming getting one is an option for you) because FastSpring is the reseller,
the merchant of record. The other reason is the vast functionality FastSpring
provides as part of its full-service, all-in-one solution, enabling developers
to skip the months or even years of dev work and instead focus on product dev
and marketing. You can view the difference here: <http://bit.ly/uuklQu>

~~~
Silhouette
Thanks for replying. As I did acknowledge, we looked into your services some
time ago and things may have moved on, so perhaps for everyone's benefit you
could clarify a few things that bugged us back then?

As far as VAT goes, at the time you appeared to collect it and then remit it
directly to national tax authorities, not to your clients. If that is still
the case, could you explain why you are required to collect VAT at all if
you're acting as a reseller and based outside the EU? If you're acting as the
merchant for tax/legal purposes, how do clients offset VAT they have paid
themselves against VAT on the purchase if you handle all of the collection and
remittance directly? If you're acting on behalf of the merchant, how do
clients integrate with your systems so that any invoices generated on your
side meet the requirements for sequential numbering if they also sell via
other channels?

In terms of data protection, are you now covered by Safe Harbor or equivalent
provisions, so there is no risk of clients running into trouble because you
might be considered to be collecting personal data on their behalf and then
exporting it outside the EEA?

Regarding the pricing, I'm afraid you just have to eat that one. Obviously
you're offering a tailored service in exchange for the higher rates, so it's
an apples to oranges comparison, but just about everyone from newcomers like
Stripe and GoCardless to old school payment gateways now offers hosted options
or transparent integrations that can be set up in hours, not "months or even
years of dev work". Meanwhile, none of the options we've been considering
recently are anywhere close to the rates you charge even with extreme adverse
factors. In more normal cases, you're about 3x as expensive as various card
payment services, and GoCardless charge a flat 1% and that's it.

------
phatbyte
Never heard of Paymill, it seems a very good alternative on Stripe :D

Personally I've been using FastSpring and 0 problems so far. However they only
work with apps, not webapps and such.

So it's good to know we are not left out in Europe.

~~~
zifot

      Personally I've been using FastSpring and 0 problems so far. 
      However they only work with apps, not webapps and such.
    

By all means they work with web apps: <http://saasy.com> (it's a FastSpring
brand).

------
Loic
Please note that a lot of the difficulties with respect to taking payment for
the OP are coming from two things:

\- market place for alcohol;

\- high value of the items exchanged, in thousands of £.

Everywhere in the world, this would flag a business as dangerous.

If you have a simple webservice offer and if you are banking with Barclays,
you can get a merchant account with BarclayCard nearly "over the phone". They
take a bit of money, have a 45 day retention period per default, but at the
end, they are efficient with a reasonably easy to implement interaction API
(if you take the hosted payment page).

------
biaxident
Does anyone have any experience with the user experience side of GoCardless?
Do customers have any issues entering their account number and sort code,
rather than the usual card information?

I really like GoCardless but feel that customers might be hesitant to enter
that information, especially when they're not used to doing it.

~~~
hirokitakeuchi
Hey - one of the founders of GoCardless here.

We have found that conversion can be just as good, if not better than cards in
the right cases. The biggest factor that affects this is transaction type.

We see really great conversion for repeat billing where Direct Debit is
already a well known method of payment. Conversion is not as good for one-off
payments where DD is less expected though.

~~~
tomwalker
I appreciate the honesty and lack of 'spin'.

I was considering GoCardless but a survey of my customers stopped me.

~~~
georgespencer
We switched from PayPal to GoCardless for one off payments and we haven't
found any problems amongst our customer base. We occasionally have to explain
the mechanics behind it but generally people get it and prefer it to not
having the faff of a PayPal login.

------
pbreit
The OP is still being naive. For 1.5k-20k transactions, you have to pretty
much do (or at least start) payments the old fashioned way: 1) vet buyers and
2) wire transfers, bank transfers or checks. Going with the payment startup du
jour is not prudent.

------
ViktorasJucikas
Here at YPlan in London we're using DataCash as a PSP and BarclayCard as a
merchant account. We talk to DataCash directly using their API, it's not that
difficult to integrate and they're very helpful with any payment related
questions.

------
melicerte
We are a startup operating from Belgium and we are using Avangate
(<http://www.avangate.com/online-payment-solutions/>) for our product RBLWatch
(<https://www.rblwatch.eu/>) and a few other things.

It supports recurring fees, and manage the VAT and currency issues for you. It
takes those awful banks solutions away. Integration with our PHP code base
went very easily. And, in the end, we only issue one invoice.

I definitively recommend.

On the other side, Ogone is just... too 90ties. And it is really hard to deal
with subscription and recurring fees.

------
jbrooksuk
GoCardless isn't supported by Shopify which is a big pain. Braintree does so
I'm awaiting an email from them now so I can start to open my online shop.

I recently blogged[1] about the need for Stripe to come to Europe whilst the
market is there. Until GoCardless, Braintree Payments start making the API
just as good as Stripes, then the need for them to come here is here.

[1]. <http://james.brooks.so/blog/stripe-in-europe/>

------
smagch
There is a stripe-like startup in Japan. <https://webpay.jp>

Interestingly, they used to provide a fork of stripe gem for Ruby API. But
they gave up on developing on their own. They have stripe compatible ruby API
now. <https://github.com/keikubo/webpay-ruby>

I have no idea why they don't implement on their own.

------
shtylman
You should look into bitcoin (at least know about it and how it can help you
as a merchant). Any payment company that deals with credit cards is not just a
payment company but a fraud detection service; at least that is what it should
be selling themselves as. Fighting CC fraud (and bank transfer fraud) is a
challenge as the system was not designed for the digital space.

~~~
blibble
it's far too difficult to acquire them at the moment for normal citizens, at
least in the UK.

I spent at least 4 hours trying to legitimately acquire bitcoins to purchase
some pretty physical coins from <https://www.casascius.com> before giving up.

~~~
shtylman
If you only spent 4 hours trying to acquire a completely new currency that is
not backed by any major authority yet still usable all over the internet, you
might want to spend some more time :) And yes, getting a hold of them is still
a challenge. If you want to buy in bulk, you can wire money to many of the
exchanges for standard wire rates.

------
drcongo
Thanks for this. As much as I'm loathe to use Paymill, it feels like a decent
option from the few available until Stripe comes over here.

~~~
davedx
Why are you loathe to use them?

~~~
nhangen
Because it's a company founded by the Samwer brothers. A simple Google search
of that name will tell you all you need to know.

~~~
kristofferR
They're absolute masters of market research, delivery and execution. They
don't rip off sites (i.e downloading the HTML and changing the logo) or
anything unethical like that, they create real competitive businesses from
scratch extremely fast without compromising the quality.

Ideas aren't worth that much (the majority of their businesses are actually
"old" ideas like ecommerce), execution and speed is what matters. They're
brilliant at it and deserve a ton of respect for it.

<http://posts.richoakley.com/post/rocket-internet-respect>

~~~
drcongo
Despite being the person who said I was loathe to use it, I agree with this to
a degree. I feel icky about doing it, but right now they're the only people
offering a sane solution in Europe, I respect them for bringing it to market
here.

------
pfortuny
Thanks for posting this, it is really useful and detailed. The hassle of
trying to work this out in Europe with a bank is really absurd.

------
Jhsto
There's also a Finnish startup doing online payments in Europe:
<https://holvi.com/>

------
glenjamin
Both Amazon Payments and Google Checkout are now available in the UK, at the
same pricing level as PayPal.

The two main complaints levelled at PayPal in TFA are poor customer service
and poor technology - two aspects that Amazon have been very good at in my
experience.

Does anyone have much experience with these platforms and their use by
"normal" UK consumers?

~~~
Silhouette
Interesting to hear that Amazon Payments is available in the UK now, but they
still seem to be physical products only, no digital downloads, services, etc.
so that limits their usefulness.

FWIW, we looked into Google Checkout/Wallet but the unclear branding and some
tight rules about how you had to present the option on your web site put us
off before we got very far.

------
jvandenbroeck
If you're talking about whole europe & not just the UK it's getting more
complicated, credit cards are not that omnipresent here. You could try
[http://www.ogone.be/en/Extra%20Services/Payment%20Methods%20...](http://www.ogone.be/en/Extra%20Services/Payment%20Methods%20and%20Acquirers.aspx)

------
s667
I spent months applying via braintree, 6 year old business, have accounts and
good record and large site, had to give passport scans, bank statements,
company accounts and other documentation spend weeks going back and forth

only to be refused because "hosting" is considered high risk

if you are in europe dont waste time with braintree!

------
Bentis2k
PayEx is large in the Nordic countries (Norway,Sweden,Denmark,Finland) but
apparently has some global support as well. Unfortunatly there's no public
word on pricing.

See <http://payex.com/business/services/Payment/online.payments>

------
filvdg
I don't think i saw someone mentioning <http://www.ogone.com>

Their solution is a bit oldfashioned ... needing to skin one of their pages
and send over the customer for processing but they offer plenty of payment
options like debet & webbanking payment options

~~~
stdbrouw
Expensive though, unless you're processing quite a large number of
transactions.

~~~
filvdg
your right , if i remember well it was about 50-80 euro a month just to keep
the account alive

------
krmmalik
Fantastic write-up. Thanks for doing this. I was searching for an article
exactly like this and it's good that i can learn from your experiences of the
newer providers. I've used Worldpay, SagePay/ProtX and Paypal in the past and
completely understand your frustrations.

Wish we had a dwolla equivalent too.

------
tope
I use Braintree for appdesignvault in thr UK and have found their service to
be top notch.

The only issue was Ayden settling the funds into our UK business account every
4 days and getting charged £6 for the privilege. A quick support email fixed
that

------
BigBalli
Not limited to EU-only but you can also find more info here:
[http://giacomoballi.com/2012/10/mobile-payments-what-are-
the...](http://giacomoballi.com/2012/10/mobile-payments-what-are-the-options/)

------
michaelfeathers
I'm surprised there's no mention of Google Checkout or Google Wallet.

~~~
jusben1369
I am pretty sure Google Checkout is US only and maybe Canada in terms of where
you need to be located.

~~~
s667
UK to but thats it, no one else in europe

------
jusben1369
One of the larger ones not referenced at all would appear to be Wirecard.
We've heard good things about them. Anyone here have a comment one way or the
other?

~~~
mkuhn
The were the payment provider at my last startup and thinks worked very well.
We used them in connection with Recurly.

------
akshxy
wow, this post has made my day. Can anybody recommend payment gateways in
Finland?

~~~
jarospisak
Have you checked <https://www.maksuturva.fi>?

~~~
akshxy
yes I have checked, planning to use it also. But its always nice to ask the
real users of the product. :)

------
mmaunder
I don't get it. Just call MerchantWarehouse (sp?) and get them to hook you up
with a merchant account and an authorize.net gateway. We take payments from
all over the world using them and get dinged around 3% total with very few
chargebacks. It's really not that big a deal.

~~~
fredoliveira
It is a big deal, actually.

Have you ever set up payment processing in the US? Did you get it going in a
matter of minutes and not days? Because I have, and I can clearly say that any
of the solutions presented in the post as well as the one you point out (and
with a tone, as if everyone just _had_ to know about this MerchantWarehouse
you speak of) require a lot more work. I'm okay with work, just not okay with
jumping through hoops that are unnecessary elsewhere.

------
tripzilch
this may be a stupid question, I don't know anything about online payment
processing, but is the new IBAN thing not supposed to make these things
easier?

------
chmike
Paymill is germany only.

~~~
chmike
why the downvote ? My comment was based on what is written in the grey box on
top of this page [https://www.paymill.com/fr-
fr/documentation-3/introduction/b...](https://www.paymill.com/fr-
fr/documentation-3/introduction/brief-instructions/index.html)

 _You should consider that direct debit as a payment method needs an
activation process of about 7-14 days. Therefor you won’t be able to use
direct debit without completed activation process. Please note too that this
service is only available in Germany right now!_

EDIT: checking the terms of service fine printed at the bottom of the page I
finally found this

 _3.1 The merchant receives the right of use to the Paymill platform limited
to the duration of the contract, territorially restricted to the following
countries, which is non-exclusive, non-sublicensable, non-transferrable and
non-assignable. Countries in scope: Andorra, Belgium, Denmark, Germany,
Estonia, Faroe Islands, Finland, France, Greece, Ireland, Iceland, Italy,
Israel, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands,
Norway, Austria, Poland, Portugal, Sweden, Switzerland, Slovakia, Slovenia,
Spain, Czech Rep., Turkey, UK, Hungary, Cyprus (Greek part), Vatikan City
(State). The right of use is valid for access to the platform via the Internet
and for use of the functionalities associated with the Paymill platform in
accordance with the regulations of this contract and the documentation. The
merchant shall be entitled to use the documentation solely for the connection
of the utilized data processing system to the Paymill platform and to store
the data transmitted to the merchant via the Paymill platform on its data
processing system or a data processing system of a third party authorized by
the merchant._

~~~
jusben1369
The down-votes come because you assert a fact that is incorrect and can
meaningfully impact the supplier and folks reading here. Perhaps "It looks
like PayMill is Germany only?" is a better approach.

