There are several systems to manage payments on the internet. Simply put, there are roughly two types of solutions: solutions with a VAD contract Distance Selling and solutions without a VAD contract. In the category of solutions with the contract, a distinction must be made between solutions offered directly by banks and third-party services. You can watch here and find the best options.
Online payment solutions with VAD contract: banks
Historically, the online payment market was initially dominated by conventional banks. It continues to occupy an important place in the landscape of online payment solutions, even if other players have appeared since. Schematically, the customer enters his bank details on the bank’s transaction server, which confirms the validity of the transaction. The bank acts as a virtual sales terminal, a simple intermediary between the e-merchant and his customers. Transactions are completely secure.
Online payment solution bank
The e-merchant, to be able to benefit from the online payment solution offered by the bank, must first sign a Distance Selling contract, called VAD contract. This contract allows the merchant to obtain certain advantages. To benefit from the best conditions, the merchant must present serious guarantees. The VAD contract is the result of a file study and negotiation. Most banks offer distance selling services to professionals. Discover the different possible legal statuses for e-commerce activity.
Online payment solutions with VAD contract: third-party solutions
Companies specializing in the provision of online payment solutions then appeared. These “third-party” solutions act as intermediaries between the company and its customers on the one hand and the banks on the other. Concretely, when a customer buys on the e-commerce site, it is redirected to the server of the payment company. This requests authorization from the customer’s bank. If the authorization is granted by the customer’s bank, the transaction is validated: the merchant’s bank is credited. The advantage of using these third-party solutions is that they can deliver services that the banks do not offer, and in particular complementary insurance services. These solutions are also based on the signing of a VAD contract. They are generally significantly more expensive than “bank” solutions. In return, the risk of fraud and non-payment is minimized, which ensures optimal reliability of transactions.
Third-party solutions without VAD contracts
Finally, there are online payment providers who do not offer an online sales contract. There is no contract, there is no subscription: you only pay commission, depending on the transaction volume managed by the service. The price of these solutions is therefore entirely variable and depends on your activity. The commission rate decreases with the volume of transactions. If you are new to e-commerce and your site is not yet generating a lot of turnovers, online payment solutions without VAD contracts are particularly interesting financially speaking.
But beware the commission rate practiced by these solutions is generally much higher than those practiced by traditional players. The major drawback of third-party solutions without VAD contracts concerns transaction insurance. In the event of fraud or non-payment, you will be much less well protected than by resorting to the two other categories of solutions presented above. You will have to prove that the package has reached the customer, which is often difficult. If you sell high-value products, this is a significant risk to take into account.