What are the different collection solutions currently available to an e-merchant targeting the Belgian market?
Immediate Payments, Online
There are different online payment formulas: credit card, disposable credit card, immediate debit payment (debit cards and electronic transfers), and payment by e-mail or via third-party accounts, overcharged communications, and mobile payments. From the Credit Card Processing Reseller the discount merchant processing work now goes fine.
The Credit Card
Advantages for the e-merchant of accepting the credit card:
Simplicity: just need to collect a code number, a surname and first name, a validity date, and a verification code, information which is found under an identical structure on all maps of the world;
Universality: possibility of receiving payments regardless of the buyer’s country of origin, without worrying about any necessary exchange transactions (note, however, that Visa and MasterCard credit cards are generally not available for Chinese consumers, to whom the banks rather offer UnionPay, the only interbank network in China);
Deferred payment at consumer level: It’s an element that obviously favors impulse purchases.
Disadvantages for the E-Merchant
Public restricted to adults, generally having had to prove regular income to receive a credit card. There are nevertheless more than 3 million cards in circulation in this country;
Easy theft if the 3D secure system is not activated: the simplicity of the device means that anyone who has noted down the card numbers of a third party can carry out transactions on their account. With the generalization of 3D Secure, the card holder must validate the transaction by an exchange of unique electronic data which transits, either on receipt or on issue, through a channel other than the Internet (the process varies depending on the bank).
Transaction commission costs collected by the acquirer and by the PSP. They vary depending on the contract, in an order of magnitude of 0.8 to 2.5%, more often a fixed amount per month, plus a fixed cost per transaction;
Transactions are capped at a certain total amount spent per month. Usually, this is 1250 dollars by default. Thus, this method of payment is inappropriate for the sale of products of a higher amount and should not be the only one offered to customers if the expected average basket exceeds 500 dollars. Also, especially if the site is aimed at an international audience, the credit card remains one of the main means of payment to be offered on an e-commerce site.
The Disposable Credit Card
An alternative option is to use a “disposable” credit card. This system aims to reassure the customer: thus, instead of entering his own credit card number, the consumer encodes another number online which is:
- Either ephemeral (valid for a single transaction),
- Either permanent, but limited to a credit note that has been previously “loaded” into a virtual account (prepaid card)
- Either permanent, but linked to a classic credit card or to a bank account, but the coupling is known only to the bank and the customer, and with the possibility for the consumer to modify at any time the maximum usable amount and sometimes other limits (e.g. valid in a single country).
This payment method may be relevant for e-commerce sites targeting profiles of novice and somewhat suspicious e-commerce buyers, underage consumers, or where the potential buyer wishes to remain anonymous. Indeed, with this process, generally only the issuing bank has the name of the customer.