January 22, 2013

Accepting Online Payment Options in Europe

Accepting online payments options in Europe.

If you are setting up an online business, how will you accept payments online is a big question that everyone has to deal with. The traditional option of getting a merchant account from a bank is a long, painful process that small companies may not be prepared to deal with.

Stripe is a popular no merchant account service in the US (not available in Europe yet).

James Maskell shares his experiences of finding an online payment option in Europe

Dealing with Banks
This means that banks will put a lot of effort in to minimising their risk. Often this means rejecting new applicants outright (a number of banks led us up the garden path, taking us through month-long processes and getting us to submit detailed documentation only to tell us that we wouldn't have been accepted anyway because we're such a new company). Other methods include charging high fees (sometimes 5% or more of each transaction processed), or holding a rolling balance (such as 20% of the value of all transactions processed for 6 weeks to cover the cost of any chargebacks).

Merchant Account
Applying directly to a bank can be a painful process - you'll need to be prepared to submit a lot of documentation (business plans, cash-flow forecasts, director identity verification, shareholder identities etc) and spend a lot of time waiting and chasing for an answer. On the plus side you will get a lot more control of how you take payments (e.g. ability to keep buyers on your site without having to redirect them to an external service), relatively low charges (around 1.5-2% of transaction value for credit cards or fixed fees of around £0.40 for debit card payments) and defined payment dates in to your main account (so you can spend the money).

WorldPay and Paypal are available for online payments in Europe but with their set of restrictions.

New alternatives to accept online payments

Tags: accept online payments in Europe, online payment services in Europe, how to accept online payments, online payment service fees