Costs in new ecommerce business

I'm setting up an ecommerce business and trying to identify all the costs involved. At the moment I'm looking at the banking end and would appreciate any help.

I know the banks will charge a setup fee and then so much per transaction, with a minimum monthly charge;
I also need to use a payment gateway provider who I gather will charge an amount per transaction; an annual fee for compliance and a fee to administer a PCI compliant certificate.

Where do I obtain a PCI compliant certificate, and how much is that likely to be?
Are there other costs in the banking/transaction area that I need to be aware of?
All suggestions gratefully received!

TreeTiger said:

I know the banks will charge a setup fee and then so much per transaction, with a minimum monthly charge;
I also need to use a payment gateway provider who I gather will charge an amount per transaction; an annual fee for compliance and a fee to administer a PCI compliant certificate.

Where do I obtain a PCI compliant certificate, and how much is that likely to be?
Are there other costs in the banking/transaction area that I need to be aware of?
All suggestions gratefully received!

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Normally merchant shopping carts redirect the buyer to a secure payment gateway which accepts the card details and confirms to the merchant that the payment has been authorised. If you as a merchant never see the card data you don't need a PCI certificate or PCI compliance. You might be thinking of an SSL certificate for your website? Speaking as someone who does have to worry about PCI compliance for their employer, you don't want to if you can avoid it!

If you want to use a traditional payment gateway you will need to setup a Merchant Account with an Acquiring Bank who will then allocate you a Merchant Id. This may require a lengthy approval process and will have an associated recurring fee. Your chosen payment gateway provider (e.g. Realex) is probably best placed to advise on which banks to approach.

You might consider starting with a PayPal business account until your website and business model are proven; for low volumes PayPal is quite cost effective. And it reduces the amount of valuable time you have to invest getting things like a Merchant Account setup. However you will see lower conversion ratios if PayPal is your only payment method.

Thanks for that, I'll have a look at what is involved with PayPal. I don't get what you're saying about lower conversion ratios if PayPal is the only payment method - I will need customers to be able to pay by debit or credit card, can both not be paid through PayPal?

Glad to hear I don't need to worry about PCI compliance, I'll go off now and look up info on SSL certification. My customers will definitely need assurance that they are paying securely.

I don't get what you're saying about lower conversion ratios if PayPal is the only payment method - I will need customers to be able to pay by debit or credit card, can both not be paid through PayPal?

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Sometimes buyers find the PayPal payment process slightly confusing - especially if their card is already registered with PayPal and they don't have their login details handy. I wouldn't say this effect is significant, but I did some instances of it when I was supporting a site using PayPal.

Also, I'm not sure if PayPal accept Irish Laser Debit cards - they didn't in the past, but that may have changed. However Laser may eventually go away in favour of Visa Debit, which is supported.

You will want to plan to use a real merchant account plus payment gateway at some stage, but I would suggest this needn't be part of the initial roll-out.

I'll go off now and look up info on SSL certification.

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Strictly you don't need an SSL cert either - when you redirect the buyer to Paypal (or a traditional gateway like Realex) the gateway's SSL certificate will be used to secure the exchange of card details. However if you are allowing users to create accounts with passwords, cancel orders etc. it would be good practice to use SSL, at least for the user login process. Again this may not need to be part of the initial site.

MugsGame said:

Also, I'm not sure if PayPal accept Irish Laser Debit cards - they didn't in the past, but that may have changed. However Laser may eventually go away in favour of Visa Debit, which is supported.

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They still don't, so has a limiting effect on the customers willing/able to use the system if you're restricted to just PayPal.

MugsGame said:

You will want to plan to use a real merchant account plus payment gateway at some stage, but I would suggest this needn't be part of the initial roll-out.

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I've never dealt with this personally, but I'm under the impression that some banks insist on a trading history to open a merchant account, so it might not even be an option for the initial roll-out.

MugsGame said:

However if you are allowing users to create accounts with passwords, cancel orders etc. it would be good practice to use SSL, at least for the user login process. Again this may not need to be part of the initial site.

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Having the SSL set up isn't a major problem (although it is an additional cost), but does carry benefits in terms of building trust in customers for a new site. Something I'd personally look at pursing if it's financially viable, even for the early stages.

Mugsgame & Satanta, thank you both very much for your comments, they're very helpful.

I will need to keep the transaction costs as low as possible and I believe many of my customers would not have a credit card.
Seems like some banks could have a chicken and egg scenario - it's a new ecommerce business but how does one develop a trading history for something like that!
Customers will be able to create an account with a password, so I think I would want to use SSL - any advice on the costs associated would be welcome.

When I decided to set this up I had no real idea what was involved in the payments end, am having to learn a lot very quickly!

Hi Tree,

Suggest you have a read of [broken link removed]

Thanks Mugsgame that looks like it could be very helpful.

Realex are launching a service that's a bit like Paypal, but you won't need a credit card to use it. This might be of interest if it goes live in time for your needs.

ardmacha said:

Realex are launching a service that's a bit like Paypal, but you won't need a credit card to use it. This might be of interest if it goes live in time for your needs.

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Sounds very interesting. I'll give them a call and see if they can tell me anything. I have a good bit of time as it will probably be March before I need to be able to put payments through.

I've also come across Lucey Technologies who claim to be the cheapest place to process a debit or credit card, but, for example they're not on AIB's list of gateway providers. Has anyone here had any experience of them?

Thanks so much for the advice so far, it's been very helpful.