6 ms·

I've held off developing / launching a few small biz ideas because of the state of payment providers in the UK - ready and waiting to help you test when you're

by keeran 15y ago

I've held off developing / launching a few small biz ideas because of the state of payment providers in the UK - ready and waiting to help you test when you're over here :)

Silhouette 15y ago
I concur entirely (and have spoken with my MP about it). However, as far as I can tell, anyone using any of the more established "big name" billing services to collect payments for a UK company is almost certainly breaking at least one law on a "your business is at risk" scale. Stripe would have to be very special to do better. The usual culprits are VAT (I have yet to find a billing service that would actually allow a UK business to comply with its basic statutory requirements on this count, including several that claim to support VAT) and privacy (exporting personal data, such as names and credit card details, outside of Europe requires certain guarantees, which again I don't think would be met by any of the services I've looked into so far). I imagine quite a few businesses are getting away with using these services and not meeting their obligations, but personally I wouldn't want to operate with that sort of risk, particularly now Business Record Checks are becoming big news. Stripe does seem to have a fairly clean API, but on the flip side, it also seems very limited in features next to some of the more established competition, so maybe it's just horses for courses. Again, I know that none of the other billing services we've considered this year even got close to supporting the basic charging model we wanted, never mind all the bells and whistles we've been considering, and if you wind up having to do a bunch of financial legwork yourself, these services start to look like very poor value for money pretty quickly. IMHO, what small businesses in the UK really need is for the government to stop hassling banks about lending lots of money (sometimes useful, but not to many of us) and just get them to provide basic services like card payments in a sane manner: no multi-month waits to get up and running, directly comparable charging structures on some standard basis, transparent migration of customer card data between all the vault services without causing a PCI nightmare so there is genuine competition in the market, and so on. And then I woke up. :-)
- AndyJPartridge 15y ago
  +1, well said. As I said in the live chat to them tonight - please guys, get to the UK soon :-)
- tablatom 15y ago
  I don't see the problem with VAT. Just keep rack of where your customers are and pay the VAT on those in Europe. Where does the payment processor come into it? If you owe VAT then pay it.
  - Silhouette 15y ago
    It is not as simple as that, at least in the UK, and the fact that so many payment services seem to think it is explains why any UK business relying on them for payment processing is probably breaking the law. There are all kinds of rules on disclosure of VAT registration details on invoices, sequential numbering of VAT invoices (across an entire company) for audit purposes, etc. Any payment system that doesn't integrate with other company procedures to meet these basic statutory obligations can't be sufficient.
    - speleding 15y ago
      I have an online business selling globally operating out of the EU and I now know more about VAT than I care too. I agree that the rules can get quite complex but as far as I can tell the payment processor does not need to be able to do anything special other than the ability to store/display the required information with each transaction (date, sequential invoice number, and VAT number in the case of a B2B transaction). You can just put that in a free format field (in PayPal for example), that's all they would need to add I think. Sure it would be nice if they stored tax (multiple rates possible on one invoice!) and VAT numbers in a separate field, it would be even nicer if they validated the VAT numbers for you, or the buyers location, but it can all be done outside the payment processor.
      - Silhouette 15y ago
        Indeed, but you do need to be able to store and display that information in the right places. As you say, technically invoices are supposed to record the VAT against each line item, because the rates can be different for different types of product/service. Regarding the serialised invoice numbers, if you as the merchant are having to keep track of such things then you're still doing some of the tedious work so the value of outsourcing the billing process is lessened. I agree that it might be viable to record the extra information in a separate field for one-off transactions, if the billing service allows that kind of annotation on transactions and your systems can generate the appropriate number taking into account any other sales channels you're also using. Even then, for subscription services that renew automatically, there would need to be some robust mechanism for the billing service to "claim" the next invoice number when they collect a scheduled payment. Perhaps some of these services could cope with this, but I have yet to see one personally whose documentation explains how to set it up using their APIs and callbacks. And if you get to the point where you have to handle scheduling regular subscription payments on your in-house system to account for this, again you're defeating the point of outsourcing the billing in the first place. IME, it doesn't take long before you have to do so much in-house anyway that you might as well do the lot and save yourself a signficant overhead and the additional risk/dependency of involving another organisation in your billing process. This sort of processing is tedious but not rocket science, so if you can't just wrap everything up and shove it out to a specialist service, avoiding having to go near that sort of stuff in-house at all, I just don't see how the cost/benefit of these services is going to make them attractive to a business here in the UK. YMMV, of course.

by keeran 15y ago

I've held off developing / launching a few small biz ideas because of the state of payment providers in the UK - ready and waiting to help you test when you're over here :)

Silhouette 15y ago

I concur entirely (and have spoken with my MP about it). However, as far as I can tell, anyone using any of the more established "big name" billing services to collect payments for a UK company is almost certainly breaking at least one law on a "your business is at risk" scale. Stripe would have to be very special to do better. The usual culprits are VAT (I have yet to find a billing service that would actually allow a UK business to comply with its basic statutory requirements on this count, including several that claim to support VAT) and privacy (exporting personal data, such as names and credit card details, outside of Europe requires certain guarantees, which again I don't think would be met by any of the services I've looked into so far). I imagine quite a few businesses are getting away with using these services and not meeting their obligations, but personally I wouldn't want to operate with that sort of risk, particularly now Business Record Checks are becoming big news. Stripe does seem to have a fairly clean API, but on the flip side, it also seems very limited in features next to some of the more established competition, so maybe it's just horses for courses. Again, I know that none of the other billing services we've considered this year even got close to supporting the basic charging model we wanted, never mind all the bells and whistles we've been considering, and if you wind up having to do a bunch of financial legwork yourself, these services start to look like very poor value for money pretty quickly. IMHO, what small businesses in the UK really need is for the government to stop hassling banks about lending lots of money (sometimes useful, but not to many of us) and just get them to provide basic services like card payments in a sane manner: no multi-month waits to get up and running, directly comparable charging structures on some standard basis, transparent migration of customer card data between all the vault services without causing a PCI nightmare so there is genuine competition in the market, and so on. And then I woke up. :-)

AndyJPartridge 15y ago
+1, well said. As I said in the live chat to them tonight - please guys, get to the UK soon :-)
tablatom 15y ago
I don't see the problem with VAT. Just keep rack of where your customers are and pay the VAT on those in Europe. Where does the payment processor come into it? If you owe VAT then pay it.
- Silhouette 15y ago
  It is not as simple as that, at least in the UK, and the fact that so many payment services seem to think it is explains why any UK business relying on them for payment processing is probably breaking the law. There are all kinds of rules on disclosure of VAT registration details on invoices, sequential numbering of VAT invoices (across an entire company) for audit purposes, etc. Any payment system that doesn't integrate with other company procedures to meet these basic statutory obligations can't be sufficient.
  - speleding 15y ago
    I have an online business selling globally operating out of the EU and I now know more about VAT than I care too. I agree that the rules can get quite complex but as far as I can tell the payment processor does not need to be able to do anything special other than the ability to store/display the required information with each transaction (date, sequential invoice number, and VAT number in the case of a B2B transaction). You can just put that in a free format field (in PayPal for example), that's all they would need to add I think. Sure it would be nice if they stored tax (multiple rates possible on one invoice!) and VAT numbers in a separate field, it would be even nicer if they validated the VAT numbers for you, or the buyers location, but it can all be done outside the payment processor.
    - Silhouette 15y ago
      Indeed, but you do need to be able to store and display that information in the right places. As you say, technically invoices are supposed to record the VAT against each line item, because the rates can be different for different types of product/service. Regarding the serialised invoice numbers, if you as the merchant are having to keep track of such things then you're still doing some of the tedious work so the value of outsourcing the billing process is lessened. I agree that it might be viable to record the extra information in a separate field for one-off transactions, if the billing service allows that kind of annotation on transactions and your systems can generate the appropriate number taking into account any other sales channels you're also using. Even then, for subscription services that renew automatically, there would need to be some robust mechanism for the billing service to "claim" the next invoice number when they collect a scheduled payment. Perhaps some of these services could cope with this, but I have yet to see one personally whose documentation explains how to set it up using their APIs and callbacks. And if you get to the point where you have to handle scheduling regular subscription payments on your in-house system to account for this, again you're defeating the point of outsourcing the billing in the first place. IME, it doesn't take long before you have to do so much in-house anyway that you might as well do the lot and save yourself a signficant overhead and the additional risk/dependency of involving another organisation in your billing process. This sort of processing is tedious but not rocket science, so if you can't just wrap everything up and shove it out to a specialist service, avoiding having to go near that sort of stuff in-house at all, I just don't see how the cost/benefit of these services is going to make them attractive to a business here in the UK. YMMV, of course.