GetYourGuide Supplier-Blog – News and Development

Since the early days of the Internet before the 2001 Dot-Com-Crash one big issue always troubled e-commerce: How to receive payments?

Although much has changed in how payments are handled and the general eagerness to pay online has drastically increased thanks to big players such as eBay & Amazon, I would like to argue in this blog post that online payment systems still lack essential features that are needed for the further developmet of state-of-the-art e-commerce solutions.The rapid growth of social networks and the overwhelming success of Google’s AdWords application has brought Internet pioneers to think that e-commerce is a 90’s thing and the future of the web is in some form of advertisement or “premium feature” business model. I strongly disagree. At least the start-ups that have been recently backed in Germany & Switzerland mostly have solid e-commerce business models. VCs seem to have a clear preference towards transaction based business models these days. Just take a look at the newest offspring from Marc, Alexander and Oliver Samwer’s Rocket Incubator and you will see a variety of 90s style e-commerce start-ups centered around common consumer goods. Whether such websites are technologically innovative (and/or successful in the long run) or not is another discussion, but it underlines that e-businesses rediscover their original approach: Make money the straight way!

Now, it is clear that the landscape has changed. At least since Amazon’s move to integrate third-party suppliers on its website, payments are not straight forward between customer and supplier as they used to be in 1999. Still, payment systems such as Paypal. Moneybookers or Amazon Web Services have not fully adapted, yet. In my eyes the main problems small e-businesses currently have with the existing online payment options are the following:

1. The gateway systems and developer’s frameworks that can be built in a website are still very poor in functionality & flexibility. Let’s say you have a product for which a customer pays on your website, but you need to process this payment further to a couple of secondary suppliers at distinct points in time. Imagine some entity in your supply chain cancels a payment and you need to reverse the money flow and cancel automated transactions…All these things mentioned are really common sense to most web businesses (notably in the travel space, where everyone earns commissions), but very hard to execute in the given payment frameworks.
2. Integration of payment interfaces into third party solutions are still VERY ugly and look like webdesign in 1995. I understand that it needs to be safe, but you could certainly do a better job to improve the look-and-feel. After all design and intuitive UIs are extremely important for purchasing decisions.
3. The margins of payment providers are still completely outrageous. For instance Paypal commissions between 3-4% for credit card transactions, even if you have a reasonable turnover. There is a great need for better payment solutions (particularly micropayment) that carry less risk than the antique credit card business. And I don’t mean paying only with your Paypal account.

At least Paypal announced that it would launch a new flexible Payment API soon (see Techcrunch article here). Whether this will be sufficient to allow new innovation in e-commerce business models is still to be seen….

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1. Flavio says:

   July 29th, at 14 PM

   interesting article! I agree that it is nice to get revenue from the services you offer, as opposed to generate income with ads where the main goal is to create a page/platform with a high volume of traffic. Still expectations of most internet users are that services should be for free… but the ads look like a bubble that will burst at one point.

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