taking payments online, security?

[chunkolini]

An interesting one.
I have been selling products via my two websites for quite a few years, and have always been impressed that people are happy sending me; effectively a stranger to them, money via bank transfer.

I have just had a potential customer raise this point, ie he has asked

''Also, can I ask how payments can be made? I should need some form of security for any up front payment. How does this work?''

Anybody got any ideas? I work for myself as a sole trader.

One idea is to take payment via paypal who seem to have an arbitration and claims service built into their system.

Cheers all, Chunko'.

 

[rtbcomp]

You should be OK with PayPal or bank transfer.

It may be an idea to have a seperate "Clients Account" to keep deposits &c in. This gives the customer an extra layer of security and if you go bust their money is safe. You only transfer money from the Clients Account once the goods have been dispatched.

 

[shenion]

I used Paypal for a long time. Works well and it is easy to set up a "buy now" button on a web site with their tools.

I also have ProPay for credit cards. They can enter the info on a secure page on my web site and I can enter them in propay. Or I can send them a one-time payment link to Propay's secure site.

 

[mike os]

paypal here too... just be aware of the fees... no more than handling credit cards though

 

[rkde]

When I used to run an on line shop I used paypal its secure easy but there is a cost I think its 3% charge

 

[malcolm]

Paypal is the easy answer. Otherwise you are into merchant accounts that cost maybe £20 every month.

If you read the PayPal rules and regs it turns out that the buyer can walk all over you (take the goods and claim their money back) unless you have "seller protection". For seller protection you only ship recorded delivery to a verified address, but it seems that only US sellers are not allowed to know if an address is verified. You can probably suss out if your customers are honest so it might not be an issue for you. Annoyed the hell out of me after a couple of weeks integrating Paypal into a shop and not using it because of that.

 

[mart]

Hi Chunco
“I should need some form of security for any up front payment”
I am wondering why your potential customer feels that he/she needs the above on this occasion (as opposed to any other “buy before you receive it” transaction).

If we buy from eBay, or an online store, or over the phone it is pretty much the same. There is always some degree of risk when buying “blindly”. There is also a degree of protection from credit fraud provided by the card companies.

Paypal offers some protection in respect of a dispute facility. However, a customer can receive the item and then make a “charge back” sometimes. As has been said, paypal take a fee-its 5% as far as my experience goes.

Sometimes customers can be more trouble than it is worth. That is for you to decide of course.

 

[tigler]

Something to be aware of on paypal, if the buyer uses a credit card or bank account for the funds to make a purchase and the card or bank account turns out to be dodgy then paypal can/will charge back to your account, so you lose the funds.
The way to prevent this if you are concerned about any potential customer is to ensure they pay from funds already in their paypal account.
Paypal is great, I use it very frequently and have never had this problem, but this is one definite risk which paypal themselves warn you about on any credit card or bank account withdrawal payment.

 

[TechnicAl]

Paypal is expensive though isnt it. I am with First Direct and I can send money to other accounts providing I have the sort code and the account number. You have to go through a complex password system to get to where you need to be so I dont think giving up your sort code / account number is a security issue (no doubt someone will prove that I must be mad). Ive done it a few times and its been fine.

They also have a verification system is I use my Visa online, a little box pops up and asks for ny password.

I opened another account recently and it pays monthly interest so after a month I decided I wanted to see what it had made. Could I remember my password? Not a chance. I had to phone them and they were very concerned and sent me from dept to dept. Anyhow I got a new password through the post. So I had another go and got past the password bit but then came "memorable date"..........They must think Im a complete dick head.

 

[the snooper]

I have just had a potential customer raise this point, ie he has asked

''Also, can I ask how payments can be made? I should need some form of security for any up front payment. How does this work?'' .

as i see it from that sentence he is asking for security on the deposit ie you wont take his money and run.

he asks how to pay but
it doesnt say security for money transfer.

 

[scott0031]

The point your customer has raised is a very valid one chunko and often little is known about the legal standing.


As you operate as sole trader (like myself) your customers are pretty protected in the eyes of the law. If you went bust or ceased trading for what ever reason and owed monies such as deposits, then you can be held personally liable. What this means in real terms is, they can take legal action against you and they will win pretty much by default. Its rare a case like this will be won by the defendant and really only if there are other circumstances which are not cut and dry.

This is where the vast majority of people get things wrong thinking they are safe dealing with a limited company. WRONG! You are in fact at a ni on 100% risk of losing any money owed if they go bang. The limited means limited liability. In such a case a limited company goes into administration, you are in short, screwed, and stand little to no chance what so ever of getting any money back. Because in the eyes of the law there liability is limited. Its in short legalised fraud. but yes its allowed to continue in this day and age and its a law i would love to see changed, so people are made to be responsible for their own actions as is the case with a sole trader.


You could probably set up a holding account where monies are held. Then on completion, verification from the customer would allow those funds to be released. I would think there are such schemes that are managed with like a arbitration service attached to cater for any disagreements. I'm sure it would cost a pretty penny though that would be the down side. I'm not sure if anything like this exists, i would expect someone out there does provide such a service.



Kind regards,


Scott (ward eng)

 

[mike os]

on the flip side... being a limited company is probably the only reason I still have a house....because of people not paying....

 

[Ian D]

Paypal is a complete farce for the seller, if you get a dodgy buyer.

 

[brightspark]

on the flip side... being a limited company is probably the only reason I still have a house....because of people not paying....

a lot of good buisneses with full order books are pulled down and go bust due to no fault of there own. as other companys have gone down owing them thousands. the worst part is they know there going so go out and buy as much gear on credit as posible then steal it away from the company then leave the creditors with sh ,.././te. i got a phone call from a wholesaler that went bust wanting to know if i wanted any back door gear half price cash before he rang to go into voluntry liquidation. i declined

 

[Robotstar5]

You could probably set up a holding account where monies are held. Then on completion, verification from the customer would allow those funds to be released. I would think there are such schemes that are managed with like a arbitration service attached to cater for any disagreements. I'm sure it would cost a pretty penny though that would be the down side. I'm not sure if anything like this exists, i would expect someone out there does provide such a service.

There is such a system, quite usful when buyer & seller don't trust each other!.

A company I worked for wanted to sell a £400k machine to a German company, my boss didn't trust them to pay so a solicitor held the funds until machine was recieved then released them.

 

[malcolm]

True enough - it's called Escrow when a third party holds the money. There are on-line versions available.

 

[the snooper]

a limited company is treat as a person in law, the company can take out a loan in its own name and doesnt need a directors or anyones name to obtain funds.
this is why in most cases the creditors dont get paid because the company (person) has no funds thats why it went bust all thats left is the assets which are sold and places like banks get paid first.
quite often the company is limited by guarantee why means that the directors have previously agreed a sum to pay should it go belly up it could even be a couple of quid.
but the directors cant always get off scott free if they have acted imporoperly and caused the companys trouble they can then be taken to court and sued.
if you want to deal with a limited company you can always check them out at companies house

 

[scott0031]

on the flip side... being a limited company is probably the only reason I still have a house....because of people not paying....

Mike, yes i know the flip sides, but with this there is a flip side to the flip side. What about all the companies that never get paid and then end up in a lot of trouble and having to fight for years to pay back the dept that was owed to them, all because of limited companies. That one limited co going down can take many others with it or put them in dire difficulties, why should that be the case?


I have not known one limited company that's on its way out, to do the right thing and not take monies from people who will then become victims. See mike this is where its wrong, they continue to take money or keep people working for them to reduce the dept when they do go bang. Now if you were made 100% totally liable as in a sole trader, directors of limited companies would not act that way. They do act that way because the law allows it!

Maybe it saved your back side being limited but i bet it ruined another score of business along the way. No disrespect and i do appreciate each case is individual. All i can say is in my colourful years in business all i have ever seen is legalised fraud. Never have i seen a limited co do the right thing, its easy to understand why, because we live in a self, self, and more self world, despite the misery it causes to countless other people.


Kind regards,


Scott (ward eng)

 

[the snooper]

small businesses can go exactly the same way though and the md made bankrupt still no one gets paid

 

[mike os]

I agree scott... there should be a cut off point, beyond which directors are liable... or at least a point at which the courts can make them liable for misrepresentation, fraud, obtaining goods by deception etc....As for businesses that rack up millions in debt the directors and management should be personally liable down to the clothes they are in court in.... hacks me off no end when companies buy all they can then go bankrupt over the weekend, then next week they are back... same tossers at the top in "different jobs" & everyone else in the crap.