Better Payment Technologies - More Direct, More Profit

1 replies
These days, online payment technologies like the giant PayPal, Google Checkout, and even lesser known Dharma Merchant Services enable online merchants to accept credit cards, processing and authorizing requisite information, and depositing new money into your account.

All of these afforementioned services charge about a .30 transaction fee, plus 2 or more % of the total price.

I am interested in setting up an online digital music shop on my website devlindewittdonnelly.com.

Trouble is, if I choose paypal or even dharma merchant services to process payment for mp3 and other audio files, I will stand to lose a significant percentage of the price of the mp3's (.69, .99, 1.29) to cover the fees.

If I sell a song for .99, I will only stand to actually take in .66 or so.

Since financial information of this kind is digital information like any other, we could build a new system which allows to send exact amounts. So that whenI wire you $5, you get $5.

Do any of our esteemed warriors have any technical expertise in these areas of programming or know of any projects going on trying to help business people to reap in more of the money from their customers?

Thanks for any input.
#direct #payment #profit #technologies
  • Profile picture of the author Melody
    Hi Devlin -

    Unfortunately, it takes more than some programming to put together a payment processing system. Although you can send the information digitally, you have to have a financial institution involved to 'trade' that digital information for cash at the end of the day - and that's where the expense comes in.

    My background is in the development of 'alternative' payment systems - meaning non-credit card based systems - and no matter what you develop - you cannot actually get the money from point A to point B solely on your own system.

    There are some banks, here in the US, and in Europe (those banks that are part of the SEPA initiative) that do allow a customer to make a transfer from their bank account to another person's account - but they all come with their own set of different problems - the bottom line is that they are not designed with ecommerce needs in mind.

    There have been many companies that have tried to develop a working micropayment model but between the high 'core' cost, and the low per transaction revenue - to date, there really has not been a successful model. It's pretty much considered the 'Holy Grail' of payment processing.

    But....Google is supposedly working on something - if anyone can come up with a workable model, it will probably be either Google or PayPal.

    I've been involved in the development of 'alternative' (non credit card based) payment systems for the last 10 years, and have launched 4 totally new payment products in that time - and believe me - the hurdles to launch a global payment system are immense and expensive.

    Melody
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