[SiliconBeach] Accepting USD Payments on Australian Business Website

[Gary]

Hi Silicon Beach Listers,

Has anybody successfully setup a credit card payment system on their
website that accepts USD in Australia? How did you do it?

I've hit a few walls looking at getting this setup as follows -

NAB is apparently the only merchant facility in Australia that has
multi-currency options and whilst NABs merchant facility for AUD
transactions is competitive their multi-currency option isn't (why
would it be if its the only one).

We currently use PayPal but want to move away from having the user
directed to PayPal we'd like to keep them on the site.


Thanks,

Gary
http://builtwith.com

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[Tristan]

Hi Gary,

From all the research I did, NAB was indeed the only option for a
multi-currency merchant account in Australia. Only other option
seemed to be World Pay if you wanted an embedded (non-hosted) solution
for payment processing. However, World Pay's fees are very high,
something like 3.4% of each transaction and it restricts your cashflow
somewhat.

Another option seemed to be opening a bank/merchant facility in the US
then managing your cash/forex risk yourself. Problem then becomes
that you have multiple accounts for reconciliation.


Good luck!
Tristan

On May 21, 7:49 am, Gary <gbre...@gmail.com> wrote:
> Hi Silicon Beach Listers,
>
> Has anybody successfully setup a credit card payment system on their
> website that accepts USD in Australia? How did you do it?
>
> I've hit a few walls looking at getting this setup as follows -
>
> NAB is apparently the only merchant facility in Australia that has
> multi-currency options and whilst NABs merchant facility for AUD
> transactions is competitive their multi-currency option isn't (why
> would it be if its the only one).
>
> We currently use PayPal but want to move away from having the user
> directed to PayPal we'd like to keep them on the site.
>
> Thanks,
>

> Garyhttp://builtwith.com

[Geoff McQueen - Hiive Systems]

If you open up a US bank account, you can use PayFlowPro (and plenty of other options in terms of merchant accounts), and then do a SWIFT transfer of the funds that land in that account on a semi-regular basis.

Caveat: I'm not across the 'implications' of this from a tax/IRS/compliance perspective... yet. Would love to hear from anyone on the list who is...

[Joseph Renzi]

We use NAB for USD going into an onshore USD bank account with NAB.

We have spent a large amount of time and effort researching all the
options we could find and I was very disappointed with the lack of
options.

At the end of the day, the real challenge is getting a USD merchant
facility.
If your company is setup in Australia only, then to my knowledge NAB
is the only organisation in the world that will provide a USD merchant
facility onshore in Australia.
If you are happy to set up a company in the USA then there are many
options available to you.
To my knowledge, PayPal's PayFlow Pro will still require a merchant
facility and this might come back to NAB, but things may have changed
and Geoff seems to know more about this.

Note: The NAB solution will handle Visa and Mastercard, but not AMEX.
If you want AMEX in USD in Australia then you also need to use AMEX's
own product (similar to NAB).

From a business point of view, I think it is a concern that one
company seems to have a monopoly in this area. In this day and age I
would have hoped that the options for a true multi-currency system in
Australia would not be so limiting ... maybe a business opportunity
for some entrepreneur out there?

Joe

On May 21, 10:49 am, Gary <gbre...@gmail.com> wrote:
> Hi Silicon Beach Listers,
>
> Has anybody successfully setup a credit card payment system on their
> website that accepts USD in Australia? How did you do it?
>
> I've hit a few walls looking at getting this setup as follows -
>
> NAB is apparently the only merchant facility in Australia that has
> multi-currency options and whilst NABs merchant facility for AUD
> transactions is competitive their multi-currency option isn't (why
> would it be if its the only one).
>
> We currently use PayPal but want to move away from having the user
> directed to PayPal we'd like to keep them on the site.
>
> Thanks,
>

> Garyhttp://builtwith.com

[Keith Lang]

If you do decide to go down the US route;

For our needs, we set up a US corporation and bank account, and are
looking at using authorize.net as the gateway and merchant account.
Our bank account is with Silicon Valley Bank in California who I
cannot recommend more highly. Their service (via email etc) has been
way above any other banking experience I've ever had. We probably
won't be using them as the merchant account though (We'll have
authorize.net do that), because of their need to have a months worth
of credit transactions secured by cash. Setting up a US bank account
requires that you have a ITIN number, which takes a fair bit of
paperwork to get.

Keith

[Joseph Renzi]

By the way, I think that when we investigated WorldPay, they "claim"
to collect USD, but when you dig a bit deeper they will only redeem
all of the moneyin AUD (if you are in Australia), but things may have
changed.

Joe

[Andrew J]

We've used PayFlowPro for this purpose, and it worked pretty well.
From memory we were able to set it up to transfer directly to an NAB
account, without an intermediary. I can't add any insight on the tax
implications, other than that the accountant was OK with the whole
thing :)

On May 22, 7:17 am, Geoff McQueen - Hiive Systems

<geoff.mcqu...@hiivesystems.com> wrote:
> If you open up a US bank account, you can use PayFlowPro (and plenty of other options in terms of merchant accounts), and then do a SWIFT transfer of the funds that land in that account on a semi-regular basis.
>
> Caveat: I'm not across the 'implications' of this from a tax/IRS/compliance perspective... yet. Would love to hear from anyone on the list who is...
>

[Gary]

Thanks everyone for the feedback. It's amazing NAB is the only one
providing this.

Gary

[David R]

I was involved in working on something like this for a business in the
travel industry. They acquired in about 12 currencies, including USD.
We used Citibank Singapore to acquire in everything except NZD and AUD
for which we used local banks. However this was for large amounts of
money (I would guess at least a million per month per currency) so the
level of attention and customisation available might be different.

Credit charge interchange in the US is a lot higher (maybe 2-3 %) so
if the merchant service fee is looking expensive, that is one reason
(because a big chunk of the money goes back to the issuer of the
cards.) In Australia the Reserve Bank has been regulating the
interchange rates downwards, which is why it's less expensive to
accept credit cards here.

[Daryl]

Interesting I was thinking of setting up in Hong Kong for much the
same reason though mainly I expect to receive in USD, Euros, UK£ and
AUD.

Any experience with that ? Hong Kong appears to be all kosher with
Australia in this regard and taxes and a lot less hassle than trying
to sort a US bank account (and I say that as a Canuck).

Just wondering if anyone had experience with it. I was looking at HSBC
but admittedly have been busy trying to get coding done... =]

ciao !
Daryl.

[Derek Clapham]

Hi Gary,

Interestingly enough, the CBA has foreign currency merchant
facilities. We have a USD merchant facility with them as part of a
pilot program they are running. We use it with our product
PhotoMerchant (http://www.photomerchant.net).

They have not made this product public at this stage.

We have been planning to lobby the CBA to seriously consider making
their foreign currency merchant facilities available to other
Australian companies and this thread has prompted us to gauge how many
people out there in the SB community might be interested in what the
CBA has to offer.

I've anyone's interested, register you interest here:
https://spreadsheets.google.com/viewform?formkey=dC1wOHVpb0hoRWtHal9TV2M4Qko5aHc6MQ

Any interest registered will be used to "lobby" the CBA to launch a
competing product to the NAB.

We found the NAB to be very expensive and quite inept when it came to
supporting their product.

As I said, this facility is not available to the general public at
this stage, but hopefully if we can demonstrate enough demand, the CBA
may make it available, or at the very least consider adding more
companies to their pilot program.

Hope this goes somewhere :)

Derek
http://photomerchant.net

On May 21, 10:49 am, Gary <gbre...@gmail.com> wrote:

> Hi Silicon Beach Listers,
>
> Has anybody successfully setup a credit card payment system on their
> website that accepts USD in Australia? How did you do it?
>
> I've hit a few walls looking at getting this setup as follows -
>
> NAB is apparently the only merchant facility in Australia that has
> multi-currency options and whilst NABs merchant facility for AUD
> transactions is competitive their multi-currency option isn't (why
> would it be if its the only one).
>
> We currently use PayPal but want to move away from having the user
> directed to PayPal we'd like to keep them on the site.
>
> Thanks,
>

> Garyhttp://builtwith.com

[Gary]

Hi Derek an everyone else,

I registered my interest on your form although my experience with CBA
is they can't be bothered unless you are making millions. When they
rang me to follow up a lead regarding a domestic merchant account they
basically weren't interested and recommended I tried other banks as I
wasn't currently banking with them.

However I have found out about "Website Payments Pro Payflow" which
"is the Payflow Pro payment gateway solution that uses PayPal as the
Internet Merchant Account to process Express Checkout or Direct
Payment credit card transactions online."

I'm not sure if it is available for Australian PayPal users but I've
posted a thread over there in the hopes it is - https://www.x.com/thread/43455?tstart=0


Gary

On May 24, 3:07 pm, Derek Clapham <derek.clap...@gmail.com> wrote:
> Hi Gary,
>
> Interestingly enough, the CBA has foreign currency merchant
> facilities. We have a USD merchant facility with them as part of a
> pilot program they are running. We use it with our product
> PhotoMerchant (http://www.photomerchant.net).
>
> They have not made this product public at this stage.
>
> We have been planning to lobby the CBA to seriously consider making
> their foreign currency merchant facilities available to other
> Australian companies and this thread has prompted us to gauge how many
> people out there in the SB community might be interested in what the
> CBA has to offer.
>

> I've anyone's interested, register you interest here:https://spreadsheets.google.com/viewform?formkey=dC1wOHVpb0hoRWtHal9T...

>
> Any interest registered will be used to "lobby" the CBA to launch a
> competing product to the NAB.
>
> We found the NAB to be very expensive and quite inept when it came to
> supporting their product.
>
> As I said, this facility is not available to the general public at
> this stage, but hopefully if we can demonstrate enough demand, the CBA
> may make it available, or at the very least consider adding more
> companies to their pilot program.
>
> Hope this goes somewhere :)
>

> Derekhttp://photomerchant.net

[Alan]

Hi All,

I stumbled across this thread via Google search. Thought I'd throw in
my 2 cents worth.

We've been struggling with this same issue for some time. I must say
I'm appalled by the lack of services in Australia.

We're currently attempting to sign up with NAB, but it's been slow
going. Rather than fill this thread with our trials and tribulations,
feel free to read here: http://www.angrymonkeys.com.au/blog/2010/05/10/why-being-an-aussie-startup-sucks/
It's worth noting that although I've made no critical comment of NAB
in the post, I was still asked to remove the post before continuing
with our application (which I've refused to do)!

Our problem, in brief, stems from wanting to do subscriptions. Whilst
Paypal has been acceptable for simple purchases, their subscription
billing is woeful not only from a dev POV, but from a customer POV.
We're wanting to use Chargify for our subscriptions, which means using
PaymentExpress as we're Aussies, which forces us to use a local bank.
Sucks to be us!

After months of investigation, it is evident that you essentially have
3 options.
1. NAB
2. WorldPay (although the setup is >1 month)
3. Go offshore.

There are actually plenty of international merchant providers, but
none of them will even talk to you unless you have a +$2M turnover. Of
course, this is something of a catch-22. How can you ever get a
significant turnover if you're unable to collect any money?

Should I find a better avenue, or option, I will be sure to post it
here! I'm actually leaning towards option 3, but am struggling to find
a place to start!

Alan

On May 24, 5:41 pm, Gary <gbre...@gmail.com> wrote:
> Hi Derek an everyone else,
>
> I registered my interest on your form although my experience with CBA
> is they can't be bothered unless you are making millions. When they
> rang me to follow up a lead regarding a domestic merchant account they
> basically weren't interested and recommended I tried other banks as I
> wasn't currently banking with them.
>
> However I have found out about "Website Payments Pro Payflow" which
> "is the Payflow Pro payment gateway solution that uses PayPal as the
> Internet Merchant Account to process Express Checkout or Direct
> Payment credit card transactions online."
>
> I'm not sure if it is available for Australian PayPal users but I've

> posted a thread over there in the hopes it is -https://www.x.com/thread/43455?tstart=0

[Andrew J]

Hi Alan,

If the problem is subscription capability you could look at coupling a
subscription billing service on top of PayPal PayFlow Pro (which
allows charging in multiple currencies and has costs about on par with
NAB merchant facilities - and is much quicker to set up).

I know for a fact that Zuora (www.zuroa.com) have a pretty reasonable
subscription product which can back onto PayFlow Pro (although their
pricing isn't very startup friendly). More recently this market has
gained some competitors (CheddarGetter, Recutly etc.) who may offer
more attractive entry level offerings, and would be worth checking
out.

Cheers, AJ

[Geoff McQueen]

An update and a request for some advice from anyone on the list who's
dealt with an LLC and Tax Identification Number issues in the US.

Update:
We've found there are three ways to charge in $US and have the money
come back to Australia without registering any sort of US presence or
opening a US bank account.
1. Go with NAB - they're the only Australian bank that can provide you
with a multi-currency merchant account. As has been covered here
before, this isn't exactly great value for a number of reasons, mostly
price and surety related.
2. Set up an EU equivalent of an ABN, and then you'll find a bunch of
banks who are more competitive, and will happily provide a merchant
account that takes money in $US and has it deposited into your AU bank
account. Still getting down to details on fees and affordability vis a
vie the NAB option.
3. Go with a "Reseller", someone like Plimus of Fastspring. Their %
rates are much higher than you'll pay for a gateway, but because
they're "reselling" your product/service, they do all the work and
they'll happily wire the money to your Cayman Islands account in time
for you to buy another Pina Colada. Reportedly, though, Plimus hold
back some money in case people run chargebacks on you.

Another option of course is to get a US entity, bank account, and tax
identification number.

Advice request:
From what I've read at sites like http://www.incnow.com/faq.shtml, the
costs of incorporating an LLC in Delaware are pretty minimal. The
annual francise tax and filing fees are just a bit over $100. Having a
Delaware LLC will allow you to open a bank account in the business
name, and then get your own Merchant account. Outfits like
Authorize.net charge bugger all (in magnitude and percentage) for this
sort of arrangement.

Big question/risk: I'm worried about the real/hidden costs associated
with this, specifically filing fees and tax stuff with the IRS. While
Delaware might be cheap, the IRS scares me. We're planning on using
this LLC just to receive payments, and then wire them back to the
Australian bank account of the business. The LLC wouldn't actually
"trade", but I'm worried that the IRS will hit us up for tax, and then
the ATO will hit us up a second time.

Has anyone on the list got any experience or IAMYL advice they can
provide?

[Brendan Quinn]

Hi Jeff, can't help you on the Delaware thing but I'd be curious to
hear more about option two, the EU approach. I'm in the EU at the
moment so that might work well for me... do you have any more info or
know anyone who has?

Brendan.

[Ryan Cross]

Hey Geoff,

I'm sure you've thought of this and are incorporating it into your
calculations, but doesn't option #2 (setting up in EU) also have
similar ramifications as setting up in the US? I would expect some
similar costs for incorporation as well as the same potential for
taxation on the money received there from the appropriate EU tax
entity.

I'm also curious - have you found organizations that won't trade with
you because of the currency issue? or because you don't have a US
presence? I have heard of that its not uncommon in some industries
where some companies (usually medium to large corporates) won't do
business with non-US companies (unless there is a US-subsidiary or
something) or at least make it much much harder.

Thanks,
Ryan

[Geoff McQueen - Hiive Systems]

Hi Ryan,

Re EU 'legal entity': I'm led to believe that you don't in any way become a taxpaying entity in that jurisdiction, you don't file any income or tax return type paperwork to authorities. So, it seems like you're registering a business, but never 'trading' on that business and the credit card payments actually come back to your Aussie bank account; you're not opening a bank account in the EU, just a merchant acquiring account/code which actually clears straight into Australia. Again, so I'm led to believe.

Re Drivers for doing this: while there's certainly an aspect of "If you're not here and we can't sue you then we're not going to trade with you" out there, the immediate reason for setting up the LLC is just to get paid in USD. Depending on the IRS situation and with the risk of double-taxation with Australia, this could be the best course of action as the business registration and annual costs are bugger all. The unknown is the IRS...

Geoff

[Geoff McQueen - Hiive Systems]

Hi Brendan,

Here's the important quote from the guys at PayVision, who act as a gateway provider:
-- snip --
We can authorize in USD and 150 other currencies, then remit to your local bank account in AUD. Funds will be wired directly from the acquiring bank in the EU, so a quick incorporation in the UK will be required. This is not a requirement for a bank account or settlements. It is basically a piece of paper for credit card compliance, and we remit settlements directly to your account in Australia in AUD. Below is information on the EU incorporation process.

http://www.fletcherkennedy.com/payvision-client.html
-- snip --

Another vendor, GlobalCollect advised me of the following:
-- snip --
There will be a need to establish an EU entity and this entity only needs to be a non-trading entity for the purpose of establishing Merchant IDs with the acquiring bank. A non-trading U.K entity may be set up quickly and easily via websites such as simpleformations.com or completeformations.co.uk. The contract with GlobalCollect and invoicing etc may all be with the Australian entity.
-- snip --

I have a sneaky feeling all these scenarios with the EU have a relatively high hurdle cost or other hassles. GlobalCollect have a minimum monthly fee that is very serious, and PayVision said they actually have difficulty getting startup applications up - I don't know if the guy was saying this as a function of risk, or as a function of "you won't be able to afford us if you're a startup".

Perhaps I should take on the EU option and keep the money in Lichtenstein or something? ;-)

Hope this helps.

Geoff

-----Original Message-----
From: silicon-bea...@googlegroups.com [mailto:silicon-bea...@googlegroups.com] On Behalf Of Brendan Quinn
Sent: Friday, 2 July 2010 3:00 AM
To: silicon-bea...@googlegroups.com
Subject: Re: [SiliconBeach] Re: Accepting USD Payments on Australian Business Website

Brendan.

--

[Elias Bizannes]

Hi guys - I would highly recommend you get an accountant for this kind of stuff.

But if not, the basic knowledge to help you research this:

- you theoretically should get taxed on wherever a company is domiciled it. The tests for that are basically where the board makes decisions, where the company is registered etc.

- This is all defined and dependent on the tax treaty between countries. Australia has quite a few of those, and these issues are spelled out in those treaties.

Elias Bizannes
http://eliasbizannes.com

[Geoff McQueen - Hiive Systems]

Elias,

 

Would you recommend an accountant in Australia with knowledge of US affairs, or an accountant in the US who can speak about what the IRS needs/wants?

 

Do you have any recommendations on startup friendly – ie, not going to cost $10K in fees – outfits?

 

Geoff

[Elias Bizannes]

Unfortunately, you're going to need to step up. Part of the value of these international accounting firms is exactly this.

And outside of myself I don't know anyone qualified and with US experience  - and that isn't going to charge big firm fees, sorry. But as Silicon Beach's Chartered Accountant, I suggest you start here and not pay anyone a cent :) http://www.ato.gov.au/corporate/content.asp?doc=/content/59547.htm

Elias Bizannes
http://eliasbizannes.com

[Michael Guilfoyle]

setting up an LLC in Delaware or a UK company is ok in regards to TAX
as there are agreements between most western nations in regards to tax
so you are not taxed twice on the one income. Talk to your accountant.
I think last time I checked your Australian company simply invoices
your US/UK/EU company as I understand it.

Also search on 'international merchant account' and there are a number
of agents and brokers that will go through the whole process for you
to get you the best deal and setup. But you still must check with your
accountant about the proper setup to handle the tax.

On Fri, Jul 2, 2010 at 12:31 AM, Geoff McQueen
<geoff....@hiivesystems.com> wrote:

[Geoff McQueen - Hiive Systems]

Elias,

 

Well, that link sent me down a bit of a rabbit hole, so I decided to try and understand the issues rather than just delegate it to an advisor. To save other entrepreneurs this effort in the future, I’ve written up what will become a bit of a “howto” for other Aussie entrepreneurs trying to do this stuff: http://www.geoffmcqueen.com/2010/07/02/going-to-america-online-business-from-down-under/

 

I’ve put in a few calls for specific professional advice, and hope that by the end of next week I’ll be able update the post to answer some of the outstanding questions and turn it into a bit of a howto.

 

If anyone on the list has any experience with this stuff and wants to fill in any inaccuracies or blanks – David Jones, I’m looking at you mate ;-) – feel free to email me off-list or give me a call.

[Mark Burch]

Out of curiosity, how does this situation in Australia compare to comparable countries like NZ and Singapore? Anyone know?

 

Regards,

Mark Burch

[Kev]

Sorry to dig up an old thread but wanted to share our experience.

With one of our products it is primarily subscription based and
targeted at the US market in large part. We too went exploring all the
options and came to similar conclusions as you folk with respect to
options. We went down the NAB route and it was a bit of a hard slog
getting it through - literally took about 3 months - but the good news
is once it was set-up all has been running well, with acceptance of
$US Visa, Mastercard and Amex (set up separately). A barrier to
selling to the international markets that obviously is not faced in
the USA. It is a shame there is not more competition in this area.

It is not only the tech area that suffers. I have a friend who has a
fashion business and buys and sells in Australia and in the Far East -
she is constantly struggling with payment options and often resorts to
just dealing in cash!!!

There really is a general opportunity for an AU bank to be start-up
friendly and aware - with provision of relevant products - they sure
would win my business.

Kevin

[Geoff McQueen - Hiive Systems]

Kev,

Do you mind sharing the cost-structure, etc with the NAB deal? I've heard they have ask to hold back a significant amount - 5 figures - to cover themselves against charge-back risk, and that the % they charge on the transactions is also pretty rough.

I'd love to know myself, but I've filled in the online form at NAB, and also called the merchant sales team (having been promised a call back in 3 days), but that is getting on two months ago now. Shameful really.

Any light you can shed would be appreciated...

Geoff

-----Original Message-----
From: silicon-bea...@googlegroups.com [mailto:silicon-bea...@googlegroups.com] On Behalf Of Kev
Sent: Sunday, 8 August 2010 2:13 AM
To: Silicon Beach Australia

Kevin

--

[Frances Jones]

Yes I'm interested too. If there was a get-together to talk about this issue, I'd come along.

Frances
http://twitter.com/franciejones

[Phil Sim]

Is it just me, or is this absolutely diabolic in this day and age that such a service is so difficult to attain! 

Phil Sim
Chief Executive Officer,
MediaConnect Australia Pty Ltd
www.mediaconnect.com.au
phi...@mediaconnect.com.au
Ph: +61 2 9894 6277
Fax: +61 2 8246 6383
Mobile: 0413889940

[rc]

Hi All

We're in the process of setting up with NAB and yes, it's extremely
difficult. With regards to not getting call backs, I had to go into
the branch and refuse to leave to actually arrange a meeting with a
business banker. When I met him he basically outlined that even
without the expensive (1200 setup fee) multi currency facility, NAB is
the most difficult to get a merch account with because they got burned
so badly by Ansett. Basically from the time that a payment is made, to
the time that the product or service is delivered, the bank is liable
for that payment. If your business goes down, the bank has to refund
the customers. So, even with NAB depending on your delivery times
there may be strong resistance to giving you an account.

In the context of an online service, where we provide permanent online
archiving, this time period is both immediate (they pay and receive
the listing immediately) and forever (we're expected to maintain that
information online as long as we're in business). I have yet to hear
the outcome of how their merch approval board is going to deal with
this scenario.

I'd like to know did others who have succeeded getting a merch
facility with NAB, to get the PCI Security compliance for your online
payments did you just do a self-assessment or did you have to get a
third-party scan done? I spoke to a security expert who said NAB
shouldn't expect us to get full compliance, but the nab website
approval form seems to think we do have to.

We'll be using it with Eway who can handle subscriptions easily (in
response to a comment above). We've been using Eway for a while and
found them to be excellent.

I don't recommend any entrepreneurs try and develop a solution for
this as one would expect Google Checkout and Paypal Pro to offer
direct services to Australians ahead of anyone else.

It's incredibly annoying that it can't be done easily, we've got an
immense number of startup online businesses here getting international
customers. It's weird actually selling in AUD to European and American
customers, but we're doing it. However it's painful to know that for
every dollar we achieve in AUD sales, we could have had a few thousand
in USD or EUR.

Someone mentioned setting it up in Hong Kong, any more advice there?

Thanks for the info provided above. I'll be exploring CBA as an option
in the meantime.

[rc]

Quick follow-on, just called CBA merch and they've been told to tell
people they can't offer multi-currency except eftpos in person.
Does anyone have a phone number of a business manager who might be
able to offer it?
tia