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Understanding the payment processing options

FlickRocket offers many different payment processing options and it is essential to understand them early on to make the right decisions. Let me explain the general differences in this blog post – without going into details about the different payment service providers.

Introduction

Payment processing is obviously one of the most important points for every shop system and we at Flickrocket have been working hard to give you all the options you need and make the process as simple as possible.

Compared to traditional simple shopping cart software which you install on your own server, FlickRocket (being a cloud based solution) offers a number of advantages and options which you don’t have or which are very hard to do on your own server:

  • You can select if you want to use your own payment account or FlickRocket processes the payments
  • You don’t have worry about security limitation (PCI-DSS) which would limit your choice of payment procedures
  • You don’t necessarily need to have your own payment accounts (and related costs)
  • You don’t have to install and maintain your own payment modules
  • Enjoy advantages of scale and robustness by using FlickRocket’s server infrastructure compared to a local server

Given these, it is clear that FlickRocket is vastly superior to a shop platform which you host locally on your server.

As always, there’s one exception: That is, if you use a payment system that FlickRocket has not yet integrated. If that is the case, you should contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. and let us know. There’s a good chance we have already made a non-public integration and even if not, we can likely add it within a few days.

Using your own payment account or Flickrocket to process payments

When deciding how the payments are processed, it is all important to understand the fundamental differences between using your own account or Flickrocket. We are trying to be crystal clear on the web site, but still many errors are happening, and so I’ve created the following table to show the differences.

Payments handled via your own payment account

Payments handled via FlickRocket

You sell the content directly to the customer

You license the content to FlickRocket and FlickRocket sells it to the customer

You receive money directly from the payment service (based on the terms and conditions you agreed with  them)

You receive the money from FlickRocket in the month following the sale

You pay the fees directly to the payment service

You receive the payouts from which FlickRocket has deducted the fees

 

So this is really more about the relationship between you, FlickRocket and the customer than anything else.

Cost

Cost of the different payment options is something we get asked often. Interestingly, there isn’t all that much of a difference.

As of today [2013-08-15] FlickRocket charges 5%. If I am not mistaken (but please feel free to check it yourself), PayPal charges 2.9% plus $0.30 per transaction. So, for sales of up to $15 the FlickRocket payment processing costs are lower than PayPal costs. At very high values PayPal becomes cheaper, so for example, if you sell a film for $25, PayPal is $0.22 cheaper.

Another thing which gets forgotten quite often is the different cost which payment systems charge for currency conversion and the monthly base cost which so providers charge.

Other considerations

As you can see from this example, cost in itself is not a major differentiator. If you decide which payment system to select, the following factors are probably more important:

  • How about risks? Can the payment be blocked? Are accounts getting frozen?
  • When does the payout happen?
  • Can all currencies be processed?
  • What is the process for refunds?
  • How easy is it to reconcile payments?

Summary

As you can see from the above, selecting the right method for payment processing is something for which you should take some time.

Unfortunately, when you sign up to FlickRocket, you are asked to make this decision as part of the process to get your shop ready right away, which does not leave you time to think about the right choice. But the good thing is that you can change this option at any time under Shop -> General -> Settings.

So, please take your time and select the payment option which works best.