There is a dual advantage to a merchant using a hosting service for processing payments rather than linking direct to the bank, says Andy Cullen, of hosting company DPS (Direct Payment Solutions).
The charging scheme is more flexible and cheaper, and the merchant is free to change banks, as the hosting service usually links to most if not all banks’ systems.
“There is a big cost to merchants in linking directly to the banks. They levy a charge per transaction, usually 3% to 4%, but it can run up to 9%,” depending on the circumstances and the amount of influence the merchant has in the market, he says.
DPS charges a regular flat fee for its service, which can work out considerably cheaper, says Cullen.
The second advantage is simply in not creating a “lock-in” to a particular bank’s systems, Cullen says.
DPS provides the BNZ with the front-line processing for Payline the version of its Buyline service where merchants manually transfer incoming internet transactions to the bank application. It also put up the first “Verified by Visa” site for the Farmers chain of stores.
DPS does not feel threatened by banks’ penetration more deeply into the territory of IT for the business customer, with developments like the ETSL infrastructure, Cullen says.
“It has always been difficult to integrate online payment into a company’s internal business systems”, and it is a task better managed by IT professionals than by banks venturing into IT territory, he says.