In this post I hope to share the nuts and bolts of setting up an e-commerce website from scratch. The topic of e-commerce is too broad to broach upon in 1 post. So let’s focus on the payment gateway. What is a payment gateway? Why do I need it?  And the more important question: Where to find a payment gateway in Singapore?

What is a payment gateway? Why do I need it?

The payment gateway is that magic link between your website and the banks. It is how people pay you from the Internet. Without it, you can’t make any monetary transactions. No transactions means you can’t sell. Simply put, you must have a payment gateway if you were to sell things online.

E-Commerce Features

Amongst payment gateways, they offer many different pricing plans and different features. Here’re some of the major features that you should take into consideration.

1. Virtual terminal

Virtual terminal is a virtual credit card swipe machine. It means you can make purchases manually by keying in the credit card details through the virtual terminal. It is helpful in cases when you sell your goods in person. The customer can still pay you by credit card though you don’t have a swipe machine. But from a customer’s perspective, I don’t feel comfortable letting a stranger know my credit card number. Besides, isn’t your website supposed to be up 24/7? Well, I feel that this feature is helpful but largely non essential.

2. Support

Support is that helping hand when things don’t work. For example, you have problems integrating. Or the payment gateway is down, and you don’t know why. Different plans have different support arrangements. It can range from email support to phone to 24/7 phone support. Though the terms may say 24/7 phone support, it may be an empty promise. If support is important to you, do seek out current customers and find out how’s their customer service experience.

3. Hosted/Non hosted

Hosted solutions is when your customers is transferred to the payment gateway’s website to make payment. While non-hosted solutions means the entire payment process is completed on your website. The main difference is the question of user interface. When your customers are redirected to another website, they’re facing a completely different user interface. It may make them uncomfortable. Some people feel that it looks unprofessional. Is this a turn off significant enough? Well, it is subjective. If a simple redirect is enough to turn off your customers, doesn’t that reveal how much they want to buy your product? Rather than working on your interface, why not spend your energy on things that matter?

4. Credit card

Visa, Mastercard, Discover, etc There’re a multitude of credit cards available. Not all cards are supported by the gateways. Do check with them. In essence think which credit cards do your customers use. As long as you support the cards they have, you’re fine.

5. Need a merchant account?

Usually, non-hosted solutions would require you to have a merchant account. A merchant account is a bank account that is electronically linked to the payment gateway. It means when someone makes payment, the money goes into this merchant account. You will need to pay fees for it. Banks usually impose a setup fee, plus transaction fees plus monthly fees. Don’t forget you still need to pay the payment gateways.

6. E-Commerce Technology

Payment gateways offer different ways to integrate with their servers. Some may let you integrate via web services. While some may force you to use JSP(they told they’ve never heard of Rails before). So ask your programmer to check out the technologies available before you commit to a payment gateway

What are the payments gateways available in Singapore?

It is at times like this that you realise that the Internet is very US centric. Many of the well known payment gateways like Authorize.net, Braintree, Google Checkout operate exclusively in the United States. The choices are pretty limited if you’re not in US.

Available Options in Singapore

• Paypal Website Payment Standard
• Paypal Payflow Gateway
• E-Nets
• E-Clearing
• World Pay
• Payment Express
• Cybersource(See updates below)
• 2c2p(Mar 2010)
• Payvision

For Paypal Payflow Gateway, the condition is you need to have a volume of S$5 million a year. If you qualify, congratulations! Visit a Citibank branch to open a merchant account and link it to the Payflow Gateway. It took me 2 months, a wasted trip to Paypal office in Singapore(where I got chased away), over 10 emails, almost 20 calls to Paypal(including overseas calls to UK and US) just to find this out.

Banks do have e-commerce services. But Singapore banks are geared towards servicing brick and mortar companies aiming to build an internet store. They’re not start-up friendly. What do I mean by that? It is required that you go through an application process, where you fill up many forms, and wait. And in fact, their e-commerce service providers are either E-Nets or E-Clearing. So please save yourself trouble and possible middleman fees by approaching the payment gateways directly. For overseas payment gateways, they usually offer their services through E-Nets. That is the case for Payment Express which is based in New Zealand.

Cost Comparison

Final Decision?

Eventually, we decided to use Paypal Website Payment Standard. Why? First, the cost is the lowest. There’re no set up fees or monthly fees. You only pay when there’re purchases. Second, the process is easy to set up. All I needed is a credit card. Applying for a merchant account at the banks is a hassle in comparison. There is processing time, and added charges for the set up can be quite hefty.

How to build an e-commerce cart?

There’re all sorts of technologies available. It depends on the person coding it.

If you’re using Rails, I highly recommend the following blog post from fortytwo.

Good luck on your e-commerce endeavours!

Update – Jan 2010

I’ve found out that Cybersource offers an API for direct integration on your website. Their prices is reasonable too. They have a Singapore office. It’s best to call them directly. Their emails keep bouncing.

Another option that is coming is 2C2P. They will link to local banks on March 1st 2010. They also have an API.

Update – Apr 2010

Another option is Payvision. They have a local office. Their sales staff can be annoying. They want to see your website before further discussion. With Payvision, you can use CheddarGetter for recurring payments