WEB/DIGITAL automating a merchant gateway?

[yveskleinsky]

First off, thanks to everyone who has been so patient with me- and for answering all my website questions. I know it's often times like explaining algebra to an ant- but I'm learning!

The last challenge (on the immediate horizon) that we are facing is how to automate the banking part of our site. The flow goes like this:

Customers pay for an item from a seller.
We are the middle man and collect funds in full.
We take 5% and transfer the rest to the seller's acct.

Now that I'm typing this, I'm wondering if this is this even legal! If it it, can anyone think of how we could automate taking our fee? If it's illegal, any thoughts on how to make it legal?

 

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[6.0_bull]

I know that PayPal has a custom department that deals with developers for custom API's ...however you would have to email them to see if this is beyond there scope ,I have used a custom API through PayPal in the past and it worked well ,different of course then your need ,but none the less not what they have available under the standard stuff..yor gonna need a great developer on your side as well to be able to code this.

 

[GoldenEggs]

Yves, you must be the fly on the wall in my office! To answer your first question, I don't think what you want to do is illegal.

Our website sells a product but we are the middleman, collecting the fees from the customer and paying our vendors. Right now, I have to do this manually. But I know it is possible to automate this process, it is just a question of money and what direction we want to take. I know there are several programs out there right now that do this but they are tailored more for retail operations (brick and mortar store that wants to enter e-commerce). My husband was looking at other websites that can offer us this service but that would mean leaving our current web developer.

Now I'm wishing I had stuck with programming so that I could do it myself!

 

[yveskleinsky]

lol- Well, I guess I'm glad to know I'm not alone here! ...I have spent the day learning about different methods for different accounts, and I think it does boil down to a programming thing. I have an email into Tom (Aptohosting) so I suppose I just need to sit tight and see what he says. ...I tell you, what I have learned today is that there seems to be a big need for a bank that is more ebusiness friendly. All the commercial accounts that I looked at dealt with checks, or forms that you had to walk in and sign! WTF?! It seems like there's a need for a bank where everything is done online and where the fees could be really low as there would be no need for branch offices- something where their offerings would cater specifically to ebusinesses. Does this utopia exist and I'm just missing it?

 

[GoldenEggs]

I believe ING is completely online. I have a personal account with them but our business account is with Bank of America. I have no idea how ING is with ecommerce.

We're meeting with our web developer tomorrow. Our motto for 2008 is update, integrate and automate! I know that what I want on the site can be done... just trying to juggle it with the current time and money!

 

[yveskleinsky]

I also have Ing for my personal savings- I don't think they do business banking. ...I looked into BofA but their fees were really high for what we are wanting to do. If you figure any of this out- keep me posted! lol

If you are thinking of revamping your site, I highly recommend Tom with Aptohosting- they are reasonable and very flexible and easy to work with.

 

[aptohosting]

Yves,

We will keep working to try and find a solution!!! We are so close to having something to show you something (design & system) wise. Also thank you for the positive feedback, we REALLY appreciate it!

Thanks,
T

 

[GoldenEggs]

Yves,

Actually, I used Aptohosting for one site, that I have very little money for at this time. But I haved asked Tom about our current e-commerce site, which we do have money for, and he's definately an option. I'd really like to work it out with our current web guys...we have a really good personal relationship with them and they have such interesting side projects/interests. They produced a documentary about the Yawanawa tribe in the Amazon and used our sound studio to do the over dubbing.

But thank you for the vote of confidence on Apto! We'll see how things go tomorrow...

 

[yveskleinsky]

Man, I gotta say this is getting frustrating. I'm not sure I'm asking the right questions to other businesses to get my point across, and I'm sure what I want to do is being done.
...After spending some time with linkpoint.com, we came to the conclusion that our fee needs to be taken out after the funds from linkpoint are transferred into our account. Again, I could do this "manually" (examining deposits, subtracting our fee and then direct depositing funds into owner accts) during the initial stages- but as soon as we grow, the extraction of our fee needs to be automatic, as I couldn't keep pace with as busy as we plan to be. It seems like hotels.com, travelocity and ebay, probably take their fees in a similar way. All I know for sure is that we don't want to bill our customers, we want to get paid up front, and we want our service to have no mbrship fees- just a flat fee per transaction. Any ideas?

 

[CactusWren]

Could this be done like dropshipping? I'm not sure I understand what you want to do, but if you just charge your customer and then get the bill from your supplier you keep the difference...

 

[GoldenEggs]

Yves,

We met with our webguys and short answer is yes, they can integrate our shopping cart with quickbooks. And they just partnered with another company so they can also integrate authorize.net and quickbooks. The process is not 100% automated but it's a step in that direction.

So the process will be an order comes in, it is automatically entered into quickbooks and a purchase order is generated and sent to the vendor. I will still have to send the shipping confirmations to the customer myself. But once I capture the charges from the customer, an invoice for the customer and a payment to the vendor can be generated at the same time - instead of me having to do invoice and payment batching manually.

However, we have a snag on our end. Since we do not stock the products ourselves, we are reliant on the vendor having the items in stock. Getting a stock list, even monthly, is difficult, since we are small volume. We're thinking of solutions to get around that.

I don't know if this helps you but I am also anxious to hear what you find out!

 

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[CactusWren]

BTW, I am currently looking for a merchant account and have just gotten info from Quickbooks/Intuit. I would not have even thought about them for merchant services, but my QB 2008 has an icon advertising it.

They appear pretty competitive, and of course, you can choose to link to QB or web store or both. Anyone have any experience with them?

 

[yveskleinsky]

Yves,

So the process will be an order comes in, it is automatically entered into quickbooks and a purchase order is generated and sent to the vendor. I will still have to send the shipping confirmations to the customer myself. But once I capture the charges from the customer, an invoice for the customer and a payment to the vendor can be generated at the same time - instead of me having to do invoice and payment batching manually.

However, we have a snag on our end. Since we do not stock the products ourselves, we are reliant on the vendor having the items in stock. Getting a stock list, even monthly, is difficult, since we are small volume. We're thinking of solutions to get around that.

Are you saying that their stock list rotates- or do they offer the same products, but you are unsure of when they get them in?
...I will look into quickbooks as a merchant provider- that might be the key to making this work. ...Are you saying that you are capturing charges after the payment is posted into quickbooks? Wouldn't that number be off, as you have credit card fees that are taken out after the charges are captured?

 

[GoldenEggs]

Our snag is not knowing if a vendor has an item in stock. For example, we get a monthly catalog of all the items they sell, and let's say it's a ukulele. We put that ukulele up for sale on our website, get an order for it and when the purchase order is forwarded to the vendor, the vendor is sold out and the next shipment is in 3-4 weeks so we end up losing the sale if the customer is not willing to wait.

There are certain items that we have a small inventory of but we don't have the resources to do that with all of our products.

I may be doing the process wrong but.... once the item ships, I capture the charge and then go to quickbooks and post the payment and pay the vendor. We use authorize.net and I am not sure when the credit card fees are taken. When I capture a charge, it is for the full amount. For example, if the customer paid $24.95 then I capture $24.95. No fees are deducted. My experience with paypal on the other hand, is different but we do not do much business through them.

 

[biophase]

I may be doing the process wrong but.... once the item ships, I capture the charge and then go to quickbooks and post the payment and pay the vendor. We use authorize.net and I am not sure when the credit card fees are taken. When I capture a charge, it is for the full amount. For example, if the customer paid $24.95 then I capture $24.95. No fees are deducted. My experience with paypal on the other hand, is different but we do not do much business through them.

The fees are taken from your checking account at the end of the month. They tally up the total charges and take 2.4% (or whatever) from your account.

 

[biophase]

It seems like hotels.com, travelocity and ebay, probably take their fees in a similar way. All I know for sure is that we don't want to bill our customers, we want to get paid up front, and we want our service to have no mbrship fees- just a flat fee per transaction. Any ideas?

Travelocity takes $5 fee off the plane ticket. My credit is charged twice, once for the airline and once from travelocity.

If you want to follow this premise you'd calculate your fee, charge that through your payment gateway and then pass the data to the next merchant and have them process the account as a separate order.

 

[yveskleinsky]

Travelocity takes $5 fee off the plane ticket. My credit is charged twice, once for the airline and once from travelocity.

If you want to follow this premise you'd calculate your fee, charge that through your payment gateway and then pass the data to the next merchant and have them process the account as a separate order.

...What do you mean, "pass the data to the next merchant and have them process the account as a separate order"?

 

[biophase]

I'm not sure how they do it, but I know that if I get a Delta ticket from Travelocity, my CC bill says:

$5 - Travelocity
$255 - Delta Airlines

So my guess is that Travelocity just charges $5 and then forwards the info to Delta's merchant system.

 

[wildambitions]

How would they "forward" it?

Let me try to get this... Say you are Travelosity
You get the booking and run a flat rate fee.
You then send the customer information to Delta, who processes the information again through their merchant account.

So basically, travelosity is getting $5.00 per lead (be it confirmed) from Delta?

 

[yveskleinsky]

That's what it sounds like to me. ...Maybe that is more of a custom API gateway thing.

 

[wildambitions]

THAT can work!

 

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[yveskleinsky]

As long as you understand how "THAT" can work, I suppose we're good. Fill me in tonight.

 

[biophase]

So basically, travelosity is getting $5.00 per lead (be it confirmed) from Delta?

Yes, that's exactly how it works. Because if you go directly to the Delta website, you can buy that same ticket for $5 cheaper.

I don't know how the computers work this all out on the backend but I know its possible.

 

[yveskleinsky]

Well, just overcoming the hurdle of, "this exists in my mind, is it possible?" is huge! We've spoken to I can't tell you how many people and are just going in circles- at least now we have a site that we can point them to.

++rep

 

[slim_jim]

How about asking MJ? If he doesn't know, he could point you in the right direction.

I have another source I will try to contact and ask. It might be a few days, before I hear back.