There are a lot of smart business owners who usually forget a certain part of having and maintaining an e-commerce website. They might spend a lot of time on creating the website, creating an inventory of their offerings, and posting pictures of what they can do. Sadly though, they forget about dealing with the very important aspect of making it easy for your customers to do the transactions. This is where an online credit card payment facility comes in.
The most common and easiest way of making online payments is by using a credit card. There are many other options that sellers and customers can take advantage of but we will concentrate on how to set up a business so that it can receive payments online. Because an online credit card payment is a really common way for online customers to pay, this is not simply an option for you; it is a necessity.
The Internet was created to give a person instant access to different types of information and services such as what your business is offering. Customers love how easy it is to use the Internet and they do not want the hassle of having to call someone to make an order or writing something and mailing a check to pay for it. If you are not capable of finding them an option that is easier and more convenient, they are likely to bring their business somewhere else. Another thing is that because your business does not really seem tangible to them, making an online credit card payment facility is one way to make it more real. It is also easier for you since you do not need to go to the bank every now and then and worry about cheques that might potentially bounce.
Step one in preparing an online credit card payment facility for your business is to get in touch with providers that give merchant accounts who can supply you with this feature. There is an application process involved with this and you need to meet a few qualifications to be eligible to sign up.
There are three kinds of merchant account suppliers. The first kind is the direct processor. These are the banks that give you direct access to process the credit cards. You need to have an order form that you will fill out and send to the secure server who stores your credit card information and transmits it to the concerned bank.
There is a certain disadvantage to this type of online credit card payment since banks do not usually like getting involved with e-commerce businesses. The main reason for hits is that they are not given access to the transaction slips that are signed by the cardholder.
Another kind is the broker. These are the middle people such as the Monster Merchant Account and PayPal. They are the intermediate parties between you and the direct processor. There is a system called the discount rate that is the one who pays for their services.
The discount rate is the price for every transaction that is charged by this intermediary each time you use their services to get paid. For example, if you sold something for $500 and there is a discount rate at 5%, you get $475 which is 5% less than the amount you should get since the $25 is left with the broker. If you operate with a big profit margin and you are smart in making wholesale transactions, you can really profit from this online credit card payment option.
There is also what is known as third-party processors. They work on a similar system as the brokers but you get additional features from them. They come in two main types – the fulfilment houses and the service providers.
The fulfilment houses are those like National Fulfilment Services and Webgistix. They are the ones that take the orders for your products using a live operator contacted using a toll-free number. They are the ones that ship these packaged goods from you to your customer. They provide you with the online record of this transaction. This is a decent process since the houses only charge a discounted rate of 5%.
The service provider is good for people who do not have a reliable credit history. They let these people bypass the criteria of the merchant account because the payments that the customers make are processed through the merchant account of the service providers. Legally, the service provider is the retailer and you have the status of an agent. However, the fees are a lot higher for this online credit card payment option.
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