Payment Systems, Legality...

I have a client who wants to accept online payments. As he is just starting off, he and I both feel that the systems currently avaliable are a little too expensive (most seem fixed fee per month or year + %x of the transaction).

I suggested that possible as he is going to have a hand held payment system from the bank, I could implement a simply payment system on the site.

The clients details (address, service required) are taken, then through ssl the clients CC details are taken and encrypted using pgp. This is sent straight through email to his account (this info is not store anywhere) where on his computer he can decrypt the message using the key and validate the payment.

Now the only weakness as far as Im aware is his computer.

I asked for some advice from a friend who think its a bad idea due to personal liability (and my lack of insurance).

I want to do a good job and have finished the main site, just the online booking/ payment system to go. I dont want to get screwed by a bank for being negligent regarding CC fraud.

I would appriciate any advice.

*paypal is an option but seems a little unprofessional given that image is everything in this sector of work - an idea though.

If image is everything, then I think you would be better off sticking with a well-known provider. There's nothing wrong with using PayPal as a processor. They're well known, quite a large corporation, and have a very extensive API to allow you to customize your system in great detail.

The liability involved in *emailing* credit card information, then processing it by hand, is just outrageous. If a mistake is made entering 1 digit, it could cost the customer fortunes. Even if you are able to void the incorrect transactions, as you said, image is everything. If a customer makes a mistake with your PayPal-integrated system, you aren't liable; they are.

If it were up to me, I would most definitely go with PayPal. Sure, 3% can be a lot, but it's well worth it, with all the benefits you receive.

Even though I have a paypal account I recently paid someone on their site using a form that transacted with paypal by using my visa card without actually signing up for paypal nor referencing my account. Do that. Once you're big enough to move from 3% to 2% use a merchant processor. Either way you pay for processing cards. Figure it into the revenue formula. Recoup it from "handling" fees.