TECH SUPPORT is a column written by Ken Richman from Nub News partner Teddington Web to help you get your business online and to make a success of it once you are up and running.

The Internet is a wonderful thing and quickly found favour with academics for navigating research documents via embedded hyperlinks.

But people soon realized it could also be used for watching cat videos.

Popular though such videos are, what's really driving the Internet through the 2020s is e-commerce. In other words, online shopping, or, as we now call it, shopping.

Online shopping has been driving the internet throughout the 2020s (Credit: Roberto Cortese via Unsplash)

Anyone can set up a store and start trading online.

You can quickly and easily market your yoga classes, sell your hand-made scented candles or pass off your LED signs as neon ones.

You can even drop-ship your goods, so you don't even have to manufacture or store any products or test them out for quality first.

But one thing every online retailer has to get to grips with is online payments.

You'll want to get paid before you ship, and you won't wish to pay over the odds in fees.

For this you'll need to partner with a payment processor, such as Stripe, Sage, GoCardless or PayPal, to name a few. Here it's only fair I declare an interest. 

PayPal is a popular company for making and accepting online payments (Credit: Muhammad Asyfaul via Unsplash)

I developed and market WPdirectdebit for GoCardless. WPdirectdebit enables you to take online payments using GoCardless via your WordPress-based website.

But I'm not going to bang on about WPdirectdebit here (well maybe just a bit.) I really want to highlight some of the considerations and pitfalls you may come across if you plan to take online payments.

Processing fees

Some people seem to make their decision on which payment processor to use based purely on the processing fees.

These fees typically have two parts – a fixed amount for every transaction and a percentage based on the amount. Sometimes, the fee is also capped. Typically, you'll pay 2 – 3% of the transaction amount.

So, it's worth doing your homework - fire up a spreadsheet and see how one payment provider stacks up against another, bearing in mind the volume of transactions you expect to make, and the typical sums involved.

GoCardless comes out very well for processing fees, but of course, there are many other factors to consider, such as:

Chargebacks

If a customer raises a complaint about a transaction, this may give rise to a chargeback.

Basically, the payment provider refunds the customer, taking it from any balance due to you. They may also deduct a hefty chargeback fee on top for their trouble.

They may not look into the circumstances surrounding the complaint.

So, you should research how willingly your payment provider hands back your (their) money, and what kind of dispute resolution they offer.

Not forgetting the length of time the customer is allowed to dispute a transaction.

Chargebacks can take you by surprise, are hard to fight and can be expensive.

Try and estimate how chargebacks could affect your business and add this to your spreadsheet.

Failed payments fees

What if the customer doesn't have the resources to meet a payment? This can be the case if you've signed them up for a regular subscription.

Not only do you not get the money, but your payment processor may also bill you for their fee just as if you had received the money.

Subscription fees

You may need to pay a subscription fee (Credit: Colin Watts via Unsplash)

Payment processors may charge you a monthly or annual fee for the type of account you have.

There may be tiers with different service levels and associated costs.

Add these to your burgeoning spreadsheet.

Above all, don't subscribe to a tier higher than you really need.

Time to get paid

You won't get your money straight away.

There will be a delay before it hits your account while the wheels of finance revolve.

This typically takes up to two to five days, so you'll need working capital to tide you over.

Having said that, WPdirectdebit supports Instant Bank Pay which can deposit the money into your account within seconds, but I don't want this to turn into one big advert.

Currencies

Selling abroad can be tricky (Credit: Micheile Henderson via Unsplash)

Do you hope to sell abroad? It's a whole big bag of worms.

Not just from the legal point of view of what you are allowed to ship and what taxes you'll need to charge, but whether your payment provider can offer the range of currencies you'll need to support, and then there are the currency conversion rates to bear in mind.

And you might well find that those transaction fees are hiked up for overseas payments.

All this information is out there to help you plug the figures in, but your spreadsheet is now getting pretty cumbersome.

Things you can sell

Payment providers have strict rules about what you can and cannot sell, and how you do business – for example, offering free trials and subscriptions.

And, with incredible timing, as I write this very paragraph, I received an email yesterday from Stripe notifying me that I transgressed some rule, and they are closing my account in 14 days.

 I appealed, as I didn't think I'd done anything remotely out of the ordinary.

Today, I've just received another email cancelling the closure, so my appeal worked, but I could have done without the stress.

Customer vetting

Payment providers may help you out by carrying out checks on the customer before approving the transaction. Or they may not. Talk to them, if this is of concern to you. It's important if you are shipping high-value items.

Trial periods

If you'd like to offer a trial period before payment is taken, or perhaps a discount off the first payment, then you should check with your payment provider whether this is possible.

I know that Stripe does allow this, and trial periods can also be set up via Direct Debit using GoCardless, by delaying the first payment.

Churn

It takes time and effort, not to mention money, to get a customer signed up. So don't lose them over a silly thing like a mislaid credit card.

Let's say you are a charity and accept regular card donations.

If a donor loses their card and then gets a replacement card with a different number, their donations will probably stop. This is an example of churn.

To recover this customer, you need to firstly notice that their payments have ceased, then you must get in touch and ask them nicely to consider setting up the payment again.

Obviously, this takes time out of your day and is not always successful. I'm going to say, hardly ever successful.

You can avoid credit card churn by not accepting card payments, for example via Direct Debit.

 Non-profit discounts

If you are a charity or non-profit, you can sometimes benefit from lower transaction fees, but you'll need to take a good look at the small print. This is another question worth asking before you sign up.

Customer management (the dashboard)

You'll want a nice easy way to keep track of all your transactions. This can be done by logging in to your account dashboard on the payment processor's website.

Ask for a demo so you can get a feeling for how easy this is and whether it offers the features you may need.

GoCardess offers a sandbox account which is just the same as a real live one but no money changes hands. I believe Stripe and PayPal have something similar.

Integration costs

If you've built your own website, well done, but when it comes to setting up a payments system, you might want to get some help from an expert (ahem!)

Factor in some costs to cover the cost of their services plus the cost of any software you'll need to purchase.

These costs will depend on the payment processor you choose and any little extras you might need to add.

For a ballpark figure, allow from £50 to £500 a year for software licences.

Notifications

When a transaction is processed, at least two people need to know, generally the customer and the store owner.

The usual way is to fire off emails via the website.

You'll need to consider how this is arranged, and it would be good to be able to have control over the contents and design of these emails especially as there's a need for them to be legally compliant.

This is something that quite often gets overlooked.

Support

As you can imagine (by now if not before), setting up an online store brings quite a bit to get your head around.

When things go awry as they inevitably do from time to time, or if you have questions (who doesn't?) then you'll need answers.

Make sure that support is available, quickly, and at the right level for you.

If your store is offline and it takes a week to get a response, and when the response comes but you don't understand it, then it's going to be costly for you.

Well, that's a lot to think about. I hope it hasn't put you off setting up shop online. It shouldn't.

All these things are surmountable and if you have a good product and plenty of motivation, you have every chance of success.

I wish you luck and, of course, if you'd like any assistance, you can always speak to me at Teddington Web.