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The Latest News, Industry Insights and Research Findings on Global Payment Markets


Guest Post: How to Choose Your Payment Service Provider

By Martin Schuppelius

[Editor's note: This is a guest post by Moritz Koenigsbuescher, SoundCloud Product Manager of Payments.]

When I started working at SoundCloud in February 2012, I found a company that was growing quickly with users from around the globe. And while the technology and product are world class, SoundCloud’s billing and payment platform needed an overhaul. To start, it seemed logical to identify where the biggest problems were located – one of them being that the Payment Service Provider (PSP) at the time only processed VISA, MasterCard and PayPal. These payment methods may be sufficient if the majority of users are from North America, but alternative payment methods must not be ignored. For example, in the Netherlands, iDEAL has a 50+% market penetration for web based payments.

In order to provide local payment options we had to select a new PSP. With numerous companies offering payment services, SoundCloud used the following criteria to best suit our needs:

  • Scalability and robustness of processing platform
  • Overall track-record
  • The number of payment methods offered worldwide
  • Expertise in payments and fraud management
  • The ease of adding additional payment methods to the existing ones
  • The technological integration of our checkout process
  • The cultural fit (i.e. technological approach, professionalism, creativity and mutual understanding of each other’s needs, ways of communicating, etc.)

In order to dive deeper into the criteria above, SoundCloud needed to figure out the knowledge base, technology, and diversity of potential PSP’s platforms.
So for starters, in order to find out about the potential company’s payments expertise and how quickly they integrate new payment options, we asked the PSPs whether they supported PayPal´s digital goods workflow in combination with PayPal’s reference payments. With answers to that question, SoundCloud could better assess the depth of what each PSP and if they were already supporting it or were planning to support it in the future. This in turn would show how fast the PSP would actually be able to implement changes or new technology.

For SEPA direct debits, SoundCloud needed to understand what was the PSP’s approach on mandate handling? Were they waiting for legislative changes or best practices or were they ready? Would they suggest a “wild” SEPA Direct Debit (like the German “ELV” on the web, without a written mandate)? Did they warn of the 5-day submission period prior to due date? Did they provide a warning for the 5-day period on automatically returning direct debits (due to insufficient funds or non-existing accounts)? These issues would make it hard to allow spontaneous purchases due to difficult fraud control. Would they discourage or encourage SEPA Direct Debits for SoundCloud?
In addition, we asked about foreign usage fee for customers from foreign countries ( i.e. a customer from the U.S. purchasing at a German merchant getting an extra charge from his bank for paying to a foreign merchant) because the answer to that question showed how well the future PSP understood the underlying mechanics of international (credit card) payments. That answer was used as an indicator on how well they would understand other aspects of international payments.

SoundCloud Payment Page

The new SoundCloud payment page (click to enlarge)

Other questions included the available reports, fraud management tools and also questions surrounding APIs and currently used technology. This was crucial because SoundCloud has a very tech-savvy and efficient engineering team who would refuse to work with a ten-year-old API design.

The time and detail level of answering the questionnaire also played a role. Not that we were overly focusing on the return time, but it showed us how keen the potential PSP were partnering with us. One question specifically tailored to our relationship with them was how high they would rate their attention towards SoundCloud on a scale from 1 to 10 (1 worst, 10 best). Most answered with a 10 (Thank you!), a few with 8 or 9 (Thanks for being realistic!) and one with an 11 (Thanks for being that enthusiastic!).

Once we received all the answers from questionnaire, we talked with all of them, and met with the most promising ones. In the end, the biggest factor influencing our decision was the payment methods offered internationally and the cultural fit with us in regards to sleek technology, their team, and an overall mutual understanding. The commercial terms were a factor too, but they did not overrule the other aspects.

Check out the embedded interview with Moritz to learn which PSP was selected by SoundCloud:

About SoundCloud: SoundCloud is the world’s leading social sound platform that lets anyone create, record, promote and share their sounds on the web. SoundCloud has a freemium model where users have up to 120 minutes of free sound with the option to upgrade to premium services. Currently, users pay via Visa, MasterCard and PayPal.


Online Merchant Guide: How to Accept Credit Card Payments – Part 1

By Martin Schuppelius

Over the years, credit cards have become the most popular payment methods for online purchases worldwide. Although new payment solutions like PayPal or Dwolla and alternative payment methods such as Bitcoin are gaining traction, credit cards have established as default e-commerce payment method. This is particularly the case for international transactions – there is almost no way around credit cards for online merchants that want to sell international. In this article we take a closer look at the credit card payment ecosystem. The next article will focus on how to choose a merchant account and payment service provider.

How credit card processing works

Credit card processing involves several parties, the customer, the bank that issues the credit card to the customer (issuing bank), the merchant, the merchant bank (acquirer bank) and last but not least the credit card network (e.g. Visa, MasterCard or American Express). In most cases online merchants also use a 3rd party payment service provider (PSP) that bundles a variety of payment methods and acts as a gateway that can connect to multiple acquiring banks and credit card associations. Furthermore a PSP can offer additional services such as risk management, reporting, fraud protection and multi-currency support.

Credit Card Processing: Authorization



Adyen and cashU Team Up to Expand Presence in Middle East and North Africa

By Martin Schuppelius

Adyen, a Netherlands-based payment processor, partners with cashU to expand its presence in the Middle East and North Africa (MENA) region and increase its portfolio of services. CashU is one of the leading payment service provider in MENA.

With its focus on internet payments in this region, cashU will help Adyen to meet the demand of local merchants and serve online shoppers in Arabic speaking and surrounding countries with payment solutions. By partnering with cashU, Adyen can expand its international coverage and enter into emerging markets to support the growing number of internationally operating merchants.


Ogone Acquires Indian Online Payment Provider EBS

By PaymentObserver

European online payment provider Ogone Payment Services has acquired E-Billing Solutions (EBS), India’s second largest online payment provider, for an undisclosed sum. This is Ogone’s first acquisition and its first move outside the European market. EBS retains its name and brand in the Indian market and will continue to operate under its current management structure and market approach.

Peter De Caluwe, CEO of Ogone Payment Services, said: “Only 8.4% of the Indian market is currently online but this translates to 100 million users which makes it the fourth largest online country in the world and this is set to grow rapidly with online travel accounting for 80% of the commerce in India. Acquiring a leading company such as EBS represents huge potential for us and our European merchants.”