ESWC06: Panel, eCommerce Issues

The first panel of the second day was about eCommerce issues.

Dave Collins of Shareware Promotions
Sharon Housley of Notepage
Phil Schnyder of Avanquest USA (not pictured)
Guy Wilnai of Plimus
Daniel Kleinberg of Plimus
Edward Leigh of OSoLiS
Jessy Jex of SWREG (not pictured)
David Boventer of ESWC eV (Moderator)

Q: Are the payment processors on the panel afraid of Google Checkout?

Not really, software registration is a lot more than just taking payments. Google Checkout isn't targetting this market. One of the Plimus guys suggested that maybe PayPal should be worried, because Google Checkout is really going after that mass-market payment processing. All the extra services on the software distribution providers such as upselling and branded order pages gave them an edge for now. Dave Collins: Worried about how much Google knows about our businesses. They already have mail, ads, searches, analytics. With Checkout they will know how much money we make too.

Q: What about a single ID, why hasn't this been acheived yet?

There are too many factors and too many parties, and most of them just aren't interested in making this happen. Microsoft tried it, and if they couldn't make it work, who could? It would require a lot of trust and confidence from consumers, and everyone is paranoid. It used to be possible for anyone slightly technical to be 100% sure that their PC was safe & clean, these days most people aren't so sure. PayPal fraud is increasing because it's only secured by a password, so any single ID system would probably need more security. Most sites now offer not to save your card details, it's almost like we're moving in the opposite direction. An anecdote about a greetings card sent to the home addresses of customers highlighted the care needed when dealing with personal information. Although the customers in this case didn't really mind receiving the card, it did make them uneasy as they weren't aware that their home address was passed on by the payment processor.

Q: Do digital IDs have less customer comeback than credit cards?

That's true, credit cards offer so much protection, and the banks have major ad campaigns to drum in that feeling of protection. If you start to make people more accountable online with digital IDs, who knows what will happen.

Q: What about Verified by Visa?

They don't seem to have followed through, it's problematic, the protection policies have loopholes, and the process takes users away from the site they are on, when we're trying to puch integration and a seamless process. [I've lost the context, but Avanquest noted that only 10% of their software sales were online.] To move forward with something like this, it needs to be verified by more than just a password, and it's hard to do that online, but we'll see what happens in future. For example, in Germany you have to prove your age at the post office before you can sign up to use 18+ services online.

Q: Do you payment processors differentiate in any way other than price? Basically, will you help me sell more?

They try, the software distribution service has to include some form of sales and marketing too, but there's no easy answer. OSoLiS offers a free frugal feed, Plimus tries to innovate with pricing schemes and upselling/cross selling, SWReg try to offer different services for different business types.

Q: But you all sound the same. Do I just go with whoever seems nicer? Is there anyway to find out which will be best for me?

We do sound the same, but you need to spend a bit of time with us, invest the effort and you will be able to see who is the most suitable for your business. Some solutions are better for some customers than others. There used to be more difference, but it's becoming a commodity business, we have to keep checking to see who has the best services for our unique needs. We sometimes expect too much for these guys, they need to be reliable, available and affordable, but do we really expect them to sell our software for us?

Q: What about Credit Card Fraud?

Fraud isn't going away, and credit card companies don't really mind that much. They make money either way, and although fraud is inconvenient, it usually doesn't end up costing the consumer. The algorithms for detecting the fraud can be good, but still maybe 1% of fraudulent transactions go through. Most of the time, fraud doesn't originate with these payment processors, it comes from banks not disposing of things correctly, phishing, or some kind of physical theft or scam. Plimus don't have any outside call centers, no paper records, and everything is audited and encrypted. The payment processors are usually taking this stuff much more seriously, and are secure. Some of the techniques they use are excluding or deferring orders from "hot" countries, based on time of day, proxies, etc. Profiling fraudulent transactions does work pretty well, it needs to get better still, but it is working. Also, authors aren't usually penalized for fraud by software registration services.

Q: How many valid transactions fail because of false positives?

No exact numbers, there's always a grey area, similar to with spam filtering. They have manual procedures in place to deal with boundary cases.

Q: Do you support pay-per-use, and Micro Transactions? Do you see a future there?

Plimus support them, and they are an incredibly powerful concept. It's not been popular in shareware so far. Another perspective was that Dynamic Pricing was better, let the software figure how much it should cost based on the usage & features required.

Q: Affiliate Screening?

It's best to monitor the initial transactions and build a profile, we try. Affiliates often sign up for a discount, or run fraudulent cards to get their commission.

Q: What's your commission on a $99 product?

Plimus: 7%, OSoLiS: 10% + 75c, SWReg: between 2.9 and 6.9 + $1, depending on options.
It's important to look into different pricing systems, they can work for you. Consider financing and taking payments in installments.

For UK readers, a new service from HSBC was mentioned, which allows you to open a US dollar account with a US bank, free of charge. I'm sure that's well worth looking into.

Gary Elfring mentioned a possible test scenario for multiple processors. By adding an image map to your Buy Now button and sending clicks to one of two processors, you would be able to monitor the number of transactions from each and get a better idea of which has the best experience for your customers.

Tags: micro isv shareware eswc06 ecommerce