I have a problem, both as a buyer and seller on payments using credit cards. I am convinced this problem is not unique to me.
As a buyer – mailchimp as an example
My HSBC credit card was recently cancelled due to two fraudulent transactions in the US. While I am waiting for a replacement card, my subscription to mailchimp has been halted. This causes a number of difficulties:
1. I cannot use the service to communicate with edocr user and customer base through monthly newsletter.
2. I could use my personal credit card, but this becomes a menace from accounts points of view.
3. Gives me a chance to review the benefit of using mailchimp – I was thinking of switching to salesforce.com led solution before – but now this has become a serious option to consider.
So what is the outcome:
1. I cannot speak to my user and customer base, so I am unhappy
2. Mailchimp could loose me as a customer, even though the reason for this is not their own making. The credit card cancellation just happened to trigger this.
As a seller – edocr.com as an example
Currently, edocr.com is integrated with paypal. So the only option to subscribe to edocr Essential service is through paypal unless you contact us direct, at which point, we can invoice you.
Some of the problems we have experienced due to paypal:
1. Paypal refusing to accept customer login details
2. Customer’s paypal account need further verifications, etc to satisfy built-in paypal safety rules
3. Customer does not have a paypal account or not keen to use his/her credit card
All of the above reasons can results in:
1. Transaction delays – lost revenue opportunity for edocr
2. Transaction may never take place, as the moment is lost and the process become a problem for the customer instead of solving a problem s/he has.
In one occasion, we lost a customer as paypal has stopped his account and he is pretty much cheesed off with paypal for many reasons. Of course, we are discussing with him about alternative payment options.
When you look at both cases, the problem lies in the payment mechanism which could lead to lost revenue opportunities for businesses. So the alternative is to offer multiple payment choices, but is this the right option?
Most online solutions take credit card based payments, either paypal, google checkout etc. They are designed primarily for individuals and small businesses. However, everyone has a bank account. If you are a company, you are not likely to change your bank account, and these do not expire as credit cards do. Whilst the ultimate solution should cater for bank accounts and credit cards, there is a significant business case to introduce a bank account based service by an independent vendor.
The ideal solution – bank account base
Think about OAuth type handshake, but of course highly secure. You login to edocr.com or mailchimp or any other service, click the payment settings, and now the handshake starts to take place with your bank account. You login to the bank account to confirm, the payment is now set. Easy peasy!
Love to hear your thoughts on how you deal with collecting payment for your web based solutions, and what your ultimate solution may look like. Who knows, someone within Northern StartUp 2.0 community of tech entrepreneurs might come up with a product to solve this problem.