A business that exists online today cannot survive unless they accept credit cards. No matter what type of products or services you sell over the internet, credit cards will be the primary payment method for many of your customers. Accepting credit cards over the internet the correct way will increase your business’s sales, and also make your business more professional. When it comes to accepting credit cards, an e-business owner has two options:
- Use a third-party service – Companies such as PayPal.com, CCBill.com, and 2Checkout.com are considered third-party merchants. With these companies, you logon to their website, enter in your product, product’s description, and product’s price. The third-party company will then generate a link for you, which you place on your website. Visitors to your website click on that link, and the third party company takes care of everything else such as processing the credit card, crediting the payment to your account, and notifying you about the visitors order. Third-party merchant accounts are good to use if you are selling a few products, and have the skills to properly setup your e-business using a true merchant account.
- Get a merchant account – Getting a merchant account for your website give’s your website a more professional feel and look to it’s visitors. Merchant accounts can be obtained through your local bank, or through online companies such as CardService International, or Yahoo Merchant Solutions. By getting your own merchant account, you have more options. If you know programming languages such as PHP or ASP, and you have an SSL certificate, you can accept credit cards without the visitor ever leaving your website. By getting your very own merchant account, your transaction fee’s will typically be less compared to using a third-party merchant account service.
Lets take a look at what you usually have to pay in order to accept credit cards:
- Setup Fee – Most third-party and regular merchant account providers charge a setup fee, ranging in prices from $19.95 to $79.95. Some merchant account companies may not have a setup fee, but may have a high transaction fee
- Transaction Fee – Every time a visitor to your website buy’s something, a certain percentage of that payment is payed to your merchant account provider. This is called a transaction fee. Transaction fees range between 0.75% to 14% of the amount of the transaction. Here’s an example: If a visitor buy’s $20.00 worth of products from your website, and your merchant account providers transaction fee is 2.5%, then you’ll receive $19.50 instead of $20.00. 20.00 x .025 = .50 cents. 20.00 – .50 = $19.50.
- Software Fee – Most merchant account providers may charge you a monthly or one-time software fee. Usually when you apply for a merchant account, you’ll get a piece of software called a Virtual Terminal. A virtual terminal allows you to manually enter credit card information, and process it. This is great if you want to accept phone orders, or mail orders too. A typical software fee is between $10.00 and $20.00.
How to link your website, to the merchant account – Most third-party merchant account providers, and some regular merchant account providers have shopping cart software installed on their web servers, which you can integrate with your website and products. This is great for the beginning webmaster who wants an easy way to setup his or her products, and accept credit cards. Some merchant account providers allow the advanced webmaster to use his or her own shopping cart, and process the payments from his or her website, so the visitor never actually leaves the website. This is done using advanced PHP or ASP scripting.
