Global Money

In an age where online transactions account for a large chunk of business, it's important for both the customer and the business to be protected. John Taylor Editor of Website Creator takes a look at a number of secure payment mechanisms and payment gateways that will help you take payments from your customers.
Whichever way you look at it, when a customer pays for a product online they are placing a lot of trust in the online business. As with any commercial transaction, there's a chance that the item may simply not appear; or that a fraudulent payment is made.
Crucial to your cash flow are payment gateways. These work in two ways: first by creating a virtual currency that can be used without the customer exposing their credit card or bank details to non-secure servers or traders, and second by adding an extra level of confidence to the buying and selling process. The ultimate purpose of a gateway is that the user can assume the money's as good as in the bank, whereas, in reality, that's only true until something goes wrong.
So how do some of the main gateways compare when it comes to security, compensation and dealing with complaints? Let's take a quick look at six possible alternatives, and what they have to offer.

PayPal
www.paypal.co.uk
PayPal now has a user base of over five million, although it remains free for buyers and free to set up for sellers. It does, however, have surprisingly few commercial partners outside eBay. PayPal's Buyer Protection Scheme seems to be better organised than most, and provided all the necessary emails are sent within 45 days, it offers users protection on deals that go bad for up to £500.

Nochex
www.nochex.co.uk
Nochex had the early advantage of being one of the few gateways that accepted UK debit cards, back in the days when credit cards were rarer and PayPal US-only. Since then, Nochex has become a niche supplier to 'adult' markets, something many gateways try to avoid. This means that fewer people are aware of its superior fraud cover, which includes no charge back fees and an admirable guarantee to underwrite all money deposited in your account, regardless of whether it is subsequently retracted. Its advantage to sellers lies within its fee structure. To accept payments through Nochex, considering the level of protection offered, is extremely cost effective. It's used in many cases as an alternative to PayPal.

Amazon Payments
www.amazon.co.uk
Arguably, the most secure gateway, as no person-to-person transaction (that's Amazon ZShops, Auctions, Marketplace or Advantage) can take place without it. Payment transactions are covered by a £2,000 guarantee – one of the largest around, and rubbed in by the fact that non-Amazon transactions are only covered up to a measly £150. The other beauty of Amazon is that the close integration of all parts of the site means that decisions on refunds and compensation can be near-instant.

ePDQ
www.epdq.co.uk
A relatively new player but with a very big owner (Barclays) and a slick, business-like site that does a good job of asking loads of information about your business (including your annual turnover and staff numbers), without revealing anything of its own compensation or fraud protection cover. A permanently-engaged sales hotline suggested that Barclays may have to rethink its 'sign up before we tell you anything' approach if it is going to make the same kind of impact with smaller traders as it has with blue chip ones. There also seemed a disappointing lack of commercial partners with whom you could use the scheme, although it is admittedly early days. We'll keep an eye on this one.

WorldPay
www.worldpay.com
WorldPay already has around 40,000 customers worldwide, and being owned by the Royal of Scotland lends it instant credibility. However, levelling a £10 chargeback every time you're a victim of bad debt sounds typical of big-bank attitudes to small-user problems. For a little extra, the Customer Guarantee will underwrite all bad debt losses and overall security seemed lock-tight, as you might expect with commercial partners like Vodaphone and Sony. "With WorldPay's standard service," explains the blurb, "the use of cardholder authentication schemes, security codes and address checking enables you to check the cardholder's identity online. This tries to make cardholder-not-present purchases as secure as face-to-face purchases.".

Western Union
www.westernunion.co.uk
Cited by many forums and auction sites as the biggest problem gateway, in fairness Western Union's model was designed for a very different purpose – to 'wire' money from one trusted party to another. By definition, this means that once the money has been collected it's gone, with no trace of the person who collected it, no record of any goods to be returned in exchange, and no compensation or fraud protection. Western Union itself warns of the danger in uncompromising terms, with no arbitration service, no compensation and the tersest of instructions as to what do in the event of a fraud.
"Western Union's business is to transfer funds from a sender to a receiver. We caution people who use our services against sending money to people they don't know. It is the sender's responsibility to know the party to which the funds are being sent."

netCash
www.netcash.is
The fact that netCash are providing a micro payments service is nothing new. However what they have developed and launched in terms of payment avenues and security are nothing short of revolutionary.
As with PayPal and Nochex, netCash can be used as a means of paying for your auction wins on eBay. The company homepage, at www.netcash.is, includes a detailed tutorial on how to go about it (and we'll be looking at this in the next issue of eBay Advisor).

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