Many online systems reach the point in their development where there arises a desire to trade with the user; or at least to take money in return for goods or services. Clearly it is possible to ask users to post payment or a cheque but the traditional on-line method of addressing this requirement is to arrange to take credit and debit cards and to be assured of funds almost immediately.

In a shop or other face to face environment there are a variety of mature services available for Chip and PIN transactions where a customer inserts their card into a reader, enters their PIN and a remote computer either confirms or refuses the payment. Both the retailer and the customer instantly know the status of the transaction and can follow through or retry as appropriate. The card readers, payment software and merchant services are all rented from a payment supplier.

 

Credit card processing is subject to the strictest of financial regulation and very difficult to achieve compliance. The standard business model is to sign up for a ‘merchant’ service from an online payment supplier. This involves re-directing potential payers to a specially built and secure payment site, forwarding details of the product or service, the amount and providing a reference number for payment. The online service processes the payment and notifies you when funds are secure. By providing you with a unique merchant code your money can be distinguished from that of their other customers and settlement can occur some time later.

Virtually no small to medium sized software developer attempts to write code in their customer facing application to take and process credit cards directly.

The model works well but it can be expensive. The online payment supplier will charge you for a setting up and maintaining a merchant account (£75/month is not uncommon), they will charge you a fixed fee (10p – 20p) for each transaction and take a percentage of the transaction value (1.0%-2.5%). Rates vary with each supplier and come down with volume but are unhelpfully high for the small trader.

In addition to the cost the online trader also faces a second challenge which is the lack of human intervention to know when a payment is successful. A small trader standing by a till or sales point will wait for the transaction to go through before handing over the goods or accepting that payment has been made. The physical trader and the customer will be on hand to address the situation if a payment should be declined etc. A virtual trade, made online, has no such intervention. To work properly the online application must have some way of asynchronously receiving a message that a payment has been completed, that it was (or was not) successful and dealing with fulfilment of the order. These are not easy challenges to address and increase the barrier to taking payments on line.

IT Services has recognised the difficulty, the need to take online payments across a range of processes across the university and devised a solution.