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Nov 10
2009
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Online Payment Collection with FeepayPosted by: Dave on Nov 10, 2009 Tagged in: realex payments , PayPal , payment processing , online payments , news , multiple payment options , ireland , Internet Merchant Accounts , feepay , e-commerce
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Feepay are an Irish company that provide an online payment collection service. This service has been growing in popularity over the past few months particularly with schools, clubs and SMEs. The Feepay service addresses two of the main barriers to entry facing those who want to accept online payments in Ireland:
- Monthly Fees and Minimum Monthly Charges
- Internet Merchant Accounts
Start-up companies and SMEs tend to be reluctant to commit to a 12 month contract. This is one of the reasons for the popularity of PayPal in Ireland, Merchants are only charged when they process a payment so there are no monthly commitments and less exposure should the venture not go as well as planned. This 'pay-as-you-go' approach also appeals to schools and clubs who tend to process payments annually.
Feepay addresses these issues through a partnership agreement with an acquiring bank and acting as a middle man between the Merchant and a Payments Service Provider, in this case - Realex Payments. Feepay hold an account with Realex so the Merchant need not become a Realex client. In fact the Merchant will not have any interaction with Realex and as such, only pay Feepay when a transaction is processed.
What are the Costs?
Feepay's acquiring bank partnership means Feepay clients get preferential rates with their Merchant account. The rates are as follows:
- 1.5% for credit card transactions
- 17 cent per debit card transaction
Feepay charge €1.25 per transaction so when combined with the merchant account fees they are quite competitive compared to PayPal.
A laser card payment of €100 with Feepay will cost you €1.42 and a credit card payment of €100 will cost you €2.75. Processing the same as a credit card payment with PayPal will cost you €3.80, a saving of €1.05 - and that is more than one percent of the transaction value.
Feepay charge a setup fee of €250 (which includes the first 100 transactions) but we have negotiated a 10% discount (€25) for readers of this blog. To avail of this 10% discount just mention webpayments.ie when signing up with Feepay.
How does it work?
Feepay provide four methods for accepting online payments.
1. Use Feepay as a shopping cart
The merchants products and the payment page are hosted by Feepay. Customers will visit the Feepay website, select the item they want, register on Feepay and complete the payment process.
2. Use Feepay to process the payment
The shopping cart functionality is handled by the Merchant but at the point of payment the customer is redirected to the Feepay for payment process.
3. Use Feepay to generate and send invoices via email
Invoices can be generated and emailed using the Feepay system. The recipient will receive a link to their invoice in the email which will allow them to make payment on the Feepay site using a Laser or credit card.
4. Accept payments via Moodle
Moodle is an GPL Licensed web application that educators use to create online learning sites. Feepay allows course providers to accept Laser and credit card payments via a Moodle plugin.
What do we think?
On the 'Why Feepay?' page, Feepay present a good argument for why you should choose them. Here are the 3 reasons they give:
- It's Easy
- It's Cost Effective
- It's More Efficient
From the perspective of their target market i.e. SME's, schools, clubs, education providers and church payments Feepay do indeed live up to these claims. Feepay is easy to setup, the simplest form of integration only requires the Merchant to add a link to their website. The simplified integration process does indeed make things very easy for the Merchant but the result of this is the checkout process for the customer is more complicated. There is a trade-off made between ease of integration and usability for the customer.
Feepay are cost effective if you process a low volume of transactions which, again is going to be the case with Feepay's target market. Once the Merchant begins to process a significant volume of transactions then they will then be in a position to evolve their payments platform and form their own direct relationship with a Payment Service Provider.
Finally the Feepay Merchant account agreement means that the settlement period is considerably shorter compared to Payment Bureaus (the only other people providing a pay-as-you-go payments service.)
Dave
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written by John Clarke , November 11, 2009
My experience is that this type of payment solution is most appropriate for merchants who have a "captive" audience i.e. customers who *must* complete the transaction to use your service. This would include sectors like schools & clubs. But they are not appropriate for on-line merchants who wish to attract "casual" shoppers - which would be the majority of the SME sector, being predominately Retail. The reason for this is the issue of "cart abandonment" at the payment stage when the consumer is moved to a 3rd party for payment.
This is a major issue with PayPal (abandonment rates are 30%+ higher than with a Payment Gateway/Merchant Account solution), as has been discussed previously on this site.
Feepay is certainly cheaper than PayPal (what isn't!), but running some quick numbers, it's cost effectiveness (Vs a Payment Gateway/Merchant Account solution) disappears once a merchant is doing more than 1 transaction per day on average.
So an appropriate solution for very low volume or occasional payments, but probably not for an online SME or Retailer, with an ambition to do more than 1 transaction per day.
[Note: opinions above based on my experience, but feel free to consider me biased - I work for a Payment Gateway!]
written by Mary Kelly , December 16, 2009
The cost effectiveness of Feepay to SME's should be based not only on the transaction cost to Feepay but also on the bank charges that the merchant must pay to the bank.
A smaller merchant won't have the bargaining power that a larger organisation like Feepay has.
A new merchant would typically be quoted between 2% and 2.5% for credit card payments.
With Feepay all merchants can avail of the 1.5% credit card rate.
This means that Feepay is cost effective for a merchant with a transaction volume of approx 2000 transactions per year.
Feepay provides more than just a payment mechanism….
•Hosted shopping cart.
•Integration tools for various open source shopping carts.
•Invoicing tool to generate, deliver and receive payments for invoices.
•Hosted customer database.
•Build in communication module via SMS or email.
•Account for cash/cheque receipts.
All of these features are available at no extra cost.
The Feepay payment model is pay-as-you-go. Together with the preferential rate Feepay customers receive on credit card payments and all the facilities available within Feepay, this makes Feepay very attractive to SME’s.
written by web development ireland , January 13, 2010
hi dave,
i remember you telling me about this, i must check it out as an alternative for some clients who do not wish to setup merchant accounts and the associated hassle.
diarmuid
written by Brian , February 04, 2010
Hi Dave,
Looks interesting,but the LASER card payment charges are excessive. We use Realex and their charges are high. What is the cheapest solution out there? What is the best bank (we use NIB) to reduce credit card payment charges . . . its killing us! We work hard to get a 25% margin, and the banks take 10% of this!
Brian
http://homebrewwest.ie
