Payment with credit cards on the Internet

1. Some definitions
2. How the payment via Internet works
3. How much all this will cost
• Payment service providers
• Some figure
4. Further considerations

• Payment service provider:
  An authorized, specialised company entrusted with the handling and processing of online payments by operators of Internet Shops.
  Example: Datatrans, Saferpay, Postfinance, etc.
• Card Acquiring Bank
  This is the Bank issuing a contract to the Merchant in order to accept payment by creditcards.
  Example : Telekurs Multipay, Aduno, SwissCards AECS, Diner's Club, etc.
• Card holder:
  This is a "client" (or buyer), a person who want to buy something (may be an object or a service) using a Web facility on the Internet.
  Example: somebody who whish to enroll for EMC 2007
• Card-issuing bank:
  This the bank which issued the card used by the client.
  Example: Corner Bank, UBS, CS, etc.
• Merchant's bank:
  This is the bank in which the seller (merchant) has an account where the money should be delivered at the end of the transaction.
  Example: EMC2007 account at UBS.
• SSL connection:
  The URL string starts with https and the whole connection will be encrypted. Thus the card's data remains confidentials and cannot be stolen during the transmission.
• Verified by VISA and MasterCard secure Code:
  Two software utilities garantee a secure identification of the card holder who must enter a password: thus he cannot deny the transaction later.
• Site certificate:
  Our web page (www.emc-zurich.ch) is certified by RapidSSL: this is a garantie to our Web users that we are what we are saying and not a fake website.
• An extended glossary can be found by Datatrans.

2- How the payment via Internet works

1. Selection of a product or service

   Using a browser a person can select products and/or a services.
   He/she will notified of the total amount to be paid (the bill).

2. Selection of a method of payment

   The client chooses between the methods offered (it can be by cheques or others method). We should consider here only a method with credit cards.
   The buyer choose one card type.

3. Enter card's data

   Having choosen his card the buyer will be presented with a special Authorisation Windows from the payment service provider (through SSL connection) in which he will have to enter the data from his credit card.

4. Validating data

   The payment service provider let the card's data be checked by the card acquiring bank which will contact the card-issuing bank and return an authorisation for the transaction (or refuse it) which will be then displayed on the buyer browser.

5. Money transfer and report

   The payment service provider let the card acquiring bank know if the transaction has been accepted by the card owner, and therefore the card acquiring bank will get the amount from the card-issuing bank and finally transfers the amount paid to the merchant's bank.
   At the same time the buyer get his credit card account charged correspondently.



Concept of payment process PDF file to download. Courtesy of DataTrans. (May 2006)

1. A web page which offer the possibility to choose different items (as for instance: enrollment for two days of the EMC 2007 conference plus conference dinner plus one workshop) and showing the total amount due.
2. A payment service provider company which check the card's data, fetch the authorisation from the card-issuing bank and execute the tranfer of the amount to the merchant's bank.
3. A software which keep record of all the transactions in a database.

1. PayGate - Bayerische Hypo- und Vereinsbank AG
2. Datatrans AG, Zürich in Zusammenarbeit mit ADUNO
3. WorldPay (Royal bank of Scotland)
4. PayGate - CompuTop GmbH, Bamberg
5. Saferpay - Telekurs Card Solutions Ltd.
6. PostFinance

Some figure (prices without taxes)

• PayGate:

  • ca. 2% of businnes volume for VISA and Master cards.
  • ca. 1% of businnes volume for American express and Diners cards.
  • Connection: 399 EUR (VISA and MasterCard) + 69 EUR fee per month.
  • Connection: 299 EUR (American Express and Diners) + 19 EUR fee per month.
  • Credit cards charge: 3.5 % of businnes volume.

  
  Total for online transactions (without on-site, manual entries):
  399+299+69+19=786 EUR + 5.5% or 4.5% of the businnes volume.

  
  

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• WorldPay:

  • Connection: 125 EUR + fee for one year: 250 EUR = 375.- EUR.
    Probabily pro card typ ...
  • Credit cards charge: 4.5% of businnes volume.
  
  It is not clear if this 4.5% is splitted between credit cartds and WorldPay ...

  
  Total for online transactions (without on-site, manual entries):
  375 EUR + 4.5% of the businnes volume.
  Probabily per each card...

  
  

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• CompuTop PayGate:

  • Connection: 320 EUR (VISA and MasterCard) + 32 EUR fee per month.
  • Additional amount per transaction: 0.09 EUR
  • Connection: 199 EUR (American Express and Diners) + 20 EUR fee per month
  • Additional amount per transaction: 0.20 EUR

  
  Total for online transactions (without on-site, manual entries):
  320+199+32+20=571 EUR + 0.09 or 0.20 EUR per transaction
  Additional fee for the credit cards: not given, let suppose 3.5%

  
  

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• DataTrans

  • License for Internet+Phone/Mail transactions: 975 CHF
  • Connection per card and currency: 100 CHF
  • Fee for transactions: two modes are possible
    1. Fixed rate for a 2 year subscription: 2'000 transactions at 1000 CHF
       Also possible for 350 transactions(500 at 350 CHF)
       or 5000 transactions at 1750 CHF
    2. Subscription on a per month basis (not suited for us as it requires a minimum of 1000 transactions to be convenient)
  • Service and support: 50 CHF per month, min. 1 year (600 CHF)

  
  Total for online AND phone/mail transactions:
  975+100*4=1375 CHF to be paid once.
  1000 CHF as a fixed rate for two year for 2000 transactions
  FIXED total for two years: 2375 CHF + 1200 CHF for support.
  gives 3575 CHF. This amount is fix and not depending from the amount or number of transactions.

  
  

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Calculation with an expected businness volume of 500 transactions of 500 EUR each:
Total 250 KEUR thus 2'500 EUR are 1% of this total amount.

Estimate charges per provider (incl. cards %) (May 2006)

company	approx. amount
PayGate	13'300 EUR
WorldPay	11'600 EUR
CompuTop	9'900 EUR
DataTrans	11'000 EUR

Another question which should be cleared up is if the german providers could use our account in a swiss bank as "merchant's bank".

It is an advantage to have a provider which is here in Zurich because it would solve the question above and, last but not least, would make support much easier (I could quicly drop in by the company and clear things up).

Datatrans would charge us with a fixed amount, which would make things a lot easier for our budget planning.