Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Taking payments online in Europe in 2013

jamesmaskell.co.uk

Post reply on HN
Print view View original

161–170 of 182 posts

Re: Taking payments online in Europe in 2013

#161

Post by Silhouette »

fastspring wrote: post #157
Silhouette wrote: post #54

Agreed, the effort required to collect payments is absurd for a UK start-up today. I haven't added up how much time we've spent just trying to find a good way to let customers pay us, but I'm quite sure we would have launched long ago if we'd had a simple no-brainer option and spent the rest of the time building our service instead! As it is, we've been looking into options for months and nothing is perfect. For us,…

Re: tax and data protection rules in Europe, over 1/2 of our clients are located outside the US, the majority of those in the EU, and so we have been handling the key EU issues (VAT, euro payment methods & currencies, EU language support, etc.) for some time now. In terms of cost, there's a major distinction in that FastSpring's pricing of 5.9%+$.95/txn or a flat 8.9% is inclusive of the cost to process credit card a…

Thanks for replying. As I did acknowledge, we looked into your services some time ago and things may have moved on, so perhaps for everyone's benefit you could clarify a few things that bugged us back then?

As far as VAT goes, at the time you appeared to collect it and then remit it directly to national tax authorities, not to your clients. If that is still the case, could you explain why you are required to collect VAT at all if you're acting as a reseller and based outside the EU? If you're acting as the merchant for tax/legal purposes, how do clients offset VAT they have paid themselves against VAT on the purchase if you handle all of the collection and remittance directly? If you're acting on behalf of the merchant, how do clients integrate with your systems so that any invoices generated on your side meet the requirements for sequential numbering if they also sell via other channels?

In terms of data protection, are you now covered by Safe Harbor or equivalent provisions, so there is no risk of clients running into trouble because you might be considered to be collecting personal data on their behalf and then exporting it outside the EEA?

Regarding the pricing, I'm afraid you just have to eat that one. Obviously you're offering a tailored service in exchange for the higher rates, so it's an apples to oranges comparison, but just about everyone from newcomers like Stripe and GoCardless to old school payment gateways now offers hosted options or transparent integrations that can be set up in hours, not "months or even years of dev work". Meanwhile, none of the options we've been considering recently are anywhere close to the rates you charge even with extreme adverse factors. In more normal cases, you're about 3x as expensive as various card payment services, and GoCardless charge a flat 1% and that's it.

Re: Taking payments online in Europe in 2013

#162

Post by contingencies »

Silhouette wrote: post #54

Agreed, the effort required to collect payments is absurd for a UK start-up today. I haven't added up how much time we've spent just trying to find a good way to let customers pay us, but I'm quite sure we would have launched long ago if we'd had a simple no-brainer option and spent the rest of the time building our service instead! As it is, we've been looking into options for months and nothing is perfect. For us,…

I recently (~2010) had good experiences with HSBC's card gateway in the UK. XML based integration. Fast. Global. Full access to fraud information.

Re: Taking payments online in Europe in 2013

#163

Post by contingencies »

Silhouette wrote: post #63
mootothemax wrote: post #24

Not to forget the other half of the story: issuing invoices. In Europe this can quickly become a pain, not only due to the extra information you need to collect (names, addresses and so on) but especially if you also need to collect Value Added Tax (VAT). This means asking for VAT IDs for companies - if they have them - and then calculating the tax based on whether the customer is in the same country as you or not. T…

Oh, VAT, how I hate you so! You'd think if the tax authorities were going to saddle us all with worrying about other countries' VAT rules, they could at least provide a list of the ISO country codes and applicable tax rates we need to charge in a format that could easily be imported into a database. Some sort of simple automatic notification system for when the rules change would be useful too. At least that way, eve…

The UK isn't as bad as the US, which brings the (often unknown) customer's location (present, domicile or claimed?), the (set of all) vendor locations, and the classification of the good under some all-encompassing system in to play as additional variables.

Re: Taking payments online in Europe in 2013

#164

Post by vidarh »

Xylakant wrote: post #67
Silhouette wrote: post #63

Earlier quoted context omitted.

Oh, VAT, how I hate you so! You'd think if the tax authorities were going to saddle us all with worrying about other countries' VAT rules, they could at least provide a list of the ISO country codes and applicable tax rates we need to charge in a format that could easily be imported into a database. Some sort of simple automatic notification system for when the rules change would be useful too. At least that way, eve…

The problem is that the VAT you need to charge does not only depend on where you're located and where your business partner is located, but also on the goods/services provided and on wether the partner is a business or a person and maybe even the moon phase and the current water level of the north sea. You can't just create a lookup table, you have to implement the actual rules.

This is complex if you're selling a lot of different goods/services that may be different VAT rated, or enter into complex contract. But for companies dealing only with simple uniform stuff that's sold at the full VAT rate, it is very straightforward, and thankfully that makes up a substantial proportion of businesses.

The EU-based businesses I've handled billing for have processed a few tens of millions without ever worrying following more rules than these:

* Outside the EEA? If yes, no VAT. Done.

* Got a VAT registration number? No VAT. Done

* Otherwise, apply current standard VAT rate (20% in the UK)

Of course, I have had the "luxury" of not dealing with any products that have other VAT rates applied. But even then, for a UK seller of products it's generally sufficient to mark the products with a VAT category and apply a lookup in the last case to determine which of the handful of rates applies.

There may certainly be edge-cases where this meant we ended up overcharging VAT of customers, but nobody goes to jail for that.

If you provide B2B services with complex contracts it certainly can get quite hairy, but that can get hairy in the US and elsewhere too.

Beyond this, the only extremely vital things to consider in Europe when it comes to invoicing that seems to regularly confound US developers (and some European developers too):

* Invoices don't change. Ever. No really. And that means storing a copy of the invoice as it was presented to the user rather than dynamically regenerating it from a template that might later change.

* Specific phrases or wording and rounding rules tends to apply depending on the country you provide the service in. But this is rarely harder than getting your accountant to approve a suitable template.

Re: Taking payments online in Europe in 2013

#165

Post by stevoski »

mattmanser wrote: post #126
stevoski wrote: post #114

Earlier quoted context omitted.

The cost for a payment processor 3% and 30 cents per transaction PLUS the costs (time-related, development-related, support-related) to manage to obtain a merchant account, deal with VAT, fraud detection, a nice customer experience, and many other things. For startups you end up way ahead by NOT rolling your own solution to this and other problems.

9% of your turnover vs ~ 3.1% of your turnover . You're a mad man to pay that much. It's a right pita, but it's not worth 6% of your company.

Let's get the comparison right.

FastSpring charge me 5.9% + 50c A merchant account will cost me 3% + 30c.

My software sells for $69. So it is 6.62% vs 3.43%. Actually it isn't.

The comparison is (6.62%) vs (3.43% PLUS dealing with all those VAT issues, fraud detection, fighting and/or wearing chargebacks, coding and maintaining the payment system, allowing direct bank transfers in countries where consumers prefer them, and many more things).

Re: Taking payments online in Europe in 2013

#166

Post by vidarh »

stevoski wrote: post #114
jusben1369 wrote: post #103

Earlier quoted context omitted.

PayPal, PayMill, Braintree etc are all 3rd party payment processors. So I don't quite understand your distinction. I believe FastSpring may mean you avoid having to get a merchant account directly so perhaps that's the difference you see? The biggest objection I've heard is the 9% flat rate they take vs 3% and 30 cents per transaction that you'd roughly see from a payment processor.

The cost for a payment processor 3% and 30 cents per transaction PLUS the costs (time-related, development-related, support-related) to manage to obtain a merchant account, deal with VAT, fraud detection, a nice customer experience, and many other things. For startups you end up way ahead by NOT rolling your own solution to this and other problems.

There are plenty of businesses where 9% is more than the gross margin. And plenty of businesses where the gross margin is higher than 9% but small enough for you to be totally unable to compete if you spend 9% on transaction fees.

It certainly can be worth it for high margin services and products, but it's by no means something that's always viable.

Re: Taking payments online in Europe in 2013

#167

Post by mietek »

contingencies wrote: post #162
Silhouette wrote: post #54

Agreed, the effort required to collect payments is absurd for a UK start-up today. I haven't added up how much time we've spent just trying to find a good way to let customers pay us, but I'm quite sure we would have launched long ago if we'd had a simple no-brainer option and spent the rest of the time building our service instead! As it is, we've been looking into options for months and nothing is perfect. For us,…

I recently (~2010) had good experiences with HSBC's card gateway in the UK. XML based integration. Fast. Global. Full access to fraud information.

Do you mean HSBC Merchant Services?

http://www.globalpaymentsinc.com/UK/index.html

Re: Taking payments online in Europe in 2013

#168

Post by ersii »

pathy wrote: post #118

What about using Klarna ( https://klarna.com/ )? Admittedly not credit card payment but also decreases risk as they take on the risk, according to themselves. Reputable company based in Sweden so no dealing with American companies - more suitable for European markets.

Indeed, I thought the same.

It's in my opinion more costumized for the European market - they can handle credit cards - but they also have setups where they buy the invoice from the merchent and handle the payments and stuff like that.

It's extremely widely used in the Swedish online merchent business world. And they're available in most European countries it looks like.

Re: Taking payments online in Europe in 2013

#169

Post by kakoni »

mrkmcknz wrote: post #101
Silhouette wrote: post #63

Earlier quoted context omitted.

Oh, VAT, how I hate you so! You'd think if the tax authorities were going to saddle us all with worrying about other countries' VAT rules, they could at least provide a list of the ISO country codes and applicable tax rates we need to charge in a format that could easily be imported into a database. Some sort of simple automatic notification system for when the rules change would be useful too. At least that way, eve…

So I sell a simple SaaS service and asked my accountant one question. Do I charge VAT. Here is his reply: " Vat rules You need to identify B2B and B2C UK, EC and outside EC customers. A vat registration number is usually accepted as evidence of B2B. 1 All sales outside the EC have no vat implications and are ‘outside the scope of vat’. 2 All sales to UK customers (B2B and B2C) have UK vat to apply to them and are sta…

Some more twists; - If you do distance selling(=mail order, ecommerce) from UK and lets say you've got lots of Finnish customers

1. B2C to Finns using UK vat up till 35000 euros of sales

2. Once you pass that 35ke distance selling threshold you need to register for VAT in Finland and start applying Finnish VAT to your goods.

(http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_wo...)

Re: Taking payments online in Europe in 2013

#170

Post by contingencies »

mietek wrote: post #167
contingencies wrote: post #162

Earlier quoted context omitted.

I recently (~2010) had good experiences with HSBC's card gateway in the UK. XML based integration. Fast. Global. Full access to fraud information.

Do you mean HSBC Merchant Services? http://www.globalpaymentsinc.com/UK/index.html

Corp people handled it via HSBC bank account. Certainly not via randompaymentrelatedwebsite.com. But yeah, that sounds right!
Post reply on HN