Online Payments

Finding the correct payment service provider for your online shop can become a bit tricky, but is hugely important. There are major differences in terms of pricing and offered services. In this article, we will show you how to untangle the terminology jungle so you have a better understanding of how wallee can work best for you. We also did some calculations in terms of pricing. Please note, this is done based on information that was publicly available in May / June 2020 and we tried our best to represent the current landscape as neutral as possible. If you find errors or changes let us know.

Topics we will cover in this post:

• Online Payments: How does it work and what parties are involved?
• How to pick the plan that suits you best
• Integration Methods and Plugins
• Supported Payment Methods
• Pricing comparison

Online Payments: What is it and who is involved?

In order for you to be able to offer online payments in your online shop, you would need to have an active contract with an acquirer and a processing contract with a payment service provider.

What is a Payment Service Provider (PSP)?

Payment Service Providers are those who have the technical ability to integrate your payment methods to your online shop. The merchant only has to negotiate with that PSP to get their desired payment methods, such as Mastercard, VISA, PostFinance and TWINT, into their shop, rather than having to deal with a number of contractual partners. So basically the payment service provider has two primary functions.

1. Technically facilitate the acceptance of multiple payment methods like Credit Card, PostFinance Card, TWINT, Invoice etc. The payment service provider offers through one API the option for merchants to accept those payment methods in an online Shop. Otherwise the merchant would have to integrate and maintain multiple integrations
2. Security: PCI DSS is important in order to make sure the payment can be processed securely. The payment service provider reduces the burden of a merchant of becoming PCI DSS compliant. The payment service provider is assessed on a yearly basis to comply with the latest PCI DSS Standards. This reduces the scope for merchants as the payment details are entered in payment form that is provided by the payment service provider.

What is an acquiring or acceptance contract?

When speaking of banking, acquiring refers to the acquisition of contractual partners who are willing to accept payments by credit card. These partners, or acquiring banks, is the credit institution that settles payments for the merchants. A merchant must have an agreement with an acquiring company such as SIX Payments, Concardis or PostFinance or with a payment facilitator such as wallee. The acquirer is generally regulated by an official supervisory body that makes sure the acquirer follows the anti money laundering laws as well as the needed security for the money that is held and transferred to the merchants. A credit card acquirer holds a license of Visa / Mastercard and makes sure he follows the rules and regulations of the schemes.

What is a Payment Facilitator?

A payment facilitator operates on the license of an acquirer an, is in direct contact with the merchant and manages the merchant account with the acquirer. A payment facilitator can therefore sign the acceptance contract on behalf of the acquirer, thus facilitating the establishment of online payments because the merchant has fewer direct relationships to maintain. The main advantage for a merchant / acquirer is that he is able to sublicense his ability to accept and move money to a agile third party - also known as FINTECH.

How to choose the right Payment Partner?

Keeping the costs as low as possible is crucial for merchants. The main points to look at are the setup and monthly fees, as well as the transaction fees. It should be clear which payment methods and which tools are required for the online shop before deciding which partner to go with. Secure payment processing is of utmost importance. Compliance with the PCI DSS Level 1 standards is important in this regard. Besides the costs, however there are also additional factors that need to be taken into account. They mainly depend on the business model and use case of the merchant. It is easy to compare the costs for payment acceptance however, the way the payment form can be integrated also has a huge implication on the conversion rate, which is finally the most important factor to be considered.

Most Important Cost Factor - Conversion Rate

The conversion rate is difficult to assess for merchants and to compare between the different payment providers. However, you should check for a seamless integration into your flows. For merchants the main goal should be that the integration of the payment methods is as seamless as possible and fully integrated into the checkout flow of a merchant shop. This allows you to fully customize the experience for the different devices (mobile, tablet and desktop.

Besides that we also recommend that you check other conversion optimization tools such as one-click checkout. There are certain payment provider like wallee which work on the latest technology that allow merchants to store the payment details at Visa / Mastercard. This allows them to be informed when the card is exchanged or updated without any work needed from the customer.

Cost Analysis

Online shops with a monthly turnover of up to 2'000 CHF

The cost analysis shows the monthly fees for smaller online shops with a monthly turnover of 2,000 CHF for 20 credit card transactions per month.

Price Calcuation
The most favorable offers from a number of payment providers were used to carry out this cost analysis. The prices are largely taken from the websites of the individual payment service providers.

	wallee	SIX goCard	PostFinance Checkout	Datatrans Starter	Stripe	PayPal
Prices in CHF
Setup Fees	0	0	249	495	0	0
Monthly Fees	19.95	75	15	20	0	0
Percentage	1.70%	2.00%	2.90%	2.00%	2.90%	3.40%
Fix	0.18	0.10	0.00	1.00	0.30	0.55
Total Fees	56.56	97.00	73.00	80.00	64.00	79.00

Not displayed in the diagram are the costs for the setup and integration. For businesses with a monthly turnover of 1’000 CHF, SIX Payments offers a package including these transactions for 75 CHF. External acquiring costs are added to the Datatrans starter price offer. In order to display this price calculation, an assumption of a transaction fee of 2% was made.

Payment Provider

Conclusion: Costs for small online shopsThe lowest fees are with wallee, followed by Payrexx and Stripe. SIX Payments is the most expensive for smaller online shops, at 97 CHF. The absolute price difference between Payrexx and SIX Payments is 35 francs. Consequently, the costs of the cheapest payment provider Payrexx are 36% lower than those of SIX Payments.

Online shops with a monthly turnover of 20'000 CHF

The cost analysis shows the monthly fees for medium-sized online shops with a trade turnover of 20,000 with 200 credit card transactions per month.

Price Calcuation
The most favorable offers from a number of payment providers were used to carry out this cost analysis. The prices are largely taken from the websites of the individual payment service providers. SIX Payments offer a package of up to a turnover of 5’000 CHF, including transaction fees for 152 CHF.

	wallee	SIX goCard	PostFinance Checkout	Datatrans Starter	Stripe	PayPal
Prices in CHF
Setup Fees	0	0	249	495	0	0
Monthly Fees	69.90	152	15	20	0	0
Percentage	1.70%	2.00%	2.30%	2.00%	2.90%	2.70%
Fix	0.10	0.10	0.00	1.00	0.30	0.55
Total Fees	273.30	472.00	475.00	620.00	640.00	650.00

Payment Provider

Conclusion: Costs for medium-sized online shopsWallee offers the lowest fees of 142 CHF a month and is the cheapest provider. Followed by Payrexx, then by SIX Payments. For medium-sized online shops, providers such as Datatrans, PayPal and Stripe are the most costly. Payrexx is 181 CHF cheaper than their competitor Stripe, what makes a percentage difference of 28%. For larger online shops, no price calculation was made, as a lot of providers do not openly share their special conditions for these larger merchants. For example, Payrexx and Stripe offer special conditions to merchants who have more than 30’000 CHF monthly turnover. Wallee offers special conditions to merchants from 100'000 CHF monthly turnover.

Wallee in Overview

Wallee is a new payment provider with integrated e-commerce solutions.

Wallee is both a payment service provider with connections to all relevant acquirers and a payment facilitator with its own acquiring and onboarding. As an all-in-one solution, Wallee is a modern and user-friendly alternative thanks to its low price model and the number of payment interfaces and e-commerce tools. Additionally, wallee offers free shop plugins for the most popular e-commerce shops, such as Shopify, Magento, Prestashop, WooCommerce, Shopware, Ecwid, and Lightspeed.

Advantages

• Cheapest provider
• Omnichannel provider Stationary (terminal) and online offers

Disadvantages

• Companies only on the market since 2015
• Low level of awareness
• Price overview from wallee

	License	Setup Fees	Monthly Fees	Transaction Fees
Basic	free	free	19.95 CHF	0.18 CHF + 1.7%
Business	free	free	69.90 CHF	0.10 CHF + 1.7%

What do the merchants have to do for the integration?

To register with wallee, you need a valid photo ID and, if necessary, an entry in the commercial register. No prior programming knowledge is required in order to integrate with your online shop.

Questions / Help

We hope that we were able to answer your most urgent questions. If you need further input, have questions about wallee or about the offers presented here, please contact our support quickly and easily.