How To Accept Online Payments on Your Website
There are many ways of collecting payments for the goods and services that you sell online. Many are simple to set up, and just involve pasting a bit of code onto your existing web pages.
I’ll start off by discussing the easiest method – the non-bank service providers.
Non-Bank Online Payment Methods
Over the past few years, many online payment services have sprung up. These services accept credit card numbers on your behalf, process the transaction, remove their fees, and pass the balance on to you. They offer a quick, simple way of selling your goods online with a minimum of fuss.
This is the Big Gorilla of non bank payment systems. It’s now owned by E-Bay, who is about one of the least customer focussed organisations on the planet.
There are many rules, strange policies, and risks associated with using Paypal. See PayPalSucks.com for some horror stories.
But having said that, I’ve never had problems in using Paypal. Just be careful what you sell, and transfer money across to your bank account regularly.
Paymate.com.au is an Australian based payment processor.
The fees and terms are a bit different to Paypal. I haven’t used them, but I understand that their service is very good.
Authorize.net Another popular payment processor for you to check out if you are in the USA.
Bank Merchant Accounts
The traditional method to accept online payments is to use a merchant account from a major bank. This method is more difficult than the other methods, but gives you maximum control over the payment process.
A normal merchant account allows you to accept credit card payments when the customer presents the card to you in the store. If you want to receive payments over the internet, you’ll need to be approved for a MOTO (Mail Order/Telephone Order) account. If you are just starting off in business, or don’t have an excellent credit rating these can be difficult to obtain. When I got mine about 10 years ago, the number of hoops I had to jump through was incredible. It’s a bit easier now that online payments are more mainstream.
Having your own merchant account also requires that you take steps to secure the transmission and collection of credit card numbers. This can be done by using an approved payment gateway that connects to your bank’s merchant account facilities. You’ll probably need a specialist to set this up for you.
If your volume of sales cannot justify a payment gateway (fees and setup costs can be expensive) then you can collect the credit card numbers, and process them manually. To do this, you’ll need a secure way of collecting the credit card data. This will mean an SSL security certificate for your website, or you can use a third party shopping cart service like Mal’s E-Commerce to collect and store the card numbers until you collect them.
SSL Certificates vary in cost from around $20 per year to over $1,000 per year, depending on where you purchase them. You’ll also need to get the certificate installed by your web host onto your hosting account.
So – Having your own merchant account can be the best way to accept online payments if you have sufficient volume of transactions, and the means to install the required systems.
To give you a VERY rough idea, It could cost up to $2,000 to implement your own merchant account if you outsourced the work. There would also be ongoing transaction fees if you used a payment gateway. This work would normally be done by your web developer in conjunction with setting up a shopping cart system. As a rule of thumb, you should be anticipating at least $100,000 in annual sales before considering a system based on your own merchant account.
Summary:
You have 2 main choices if you want to accept online payments:
1 – A MOTO account with a recognised bank. This gives you the most control over the transaction, but is not cost effective if you only have a small volume of transactions.
2. A non bank payment processor who handles the secure side of the payment transaction, deducts their fees, and makes the balance available to you.
Do your homework, and compare the fees and charges associated with each of the options. Some processors will hold back a portion of the amount collected to cover and future chargebacks.
Paypal offers a wide range of services and options, including recurring charges for monthly membership fees, etc. Although many people have had bad experiences with them, they are probably the processor that I would suggest you use if you are just starting out in e-commerce.
Shopping Carts
The method of accepting money online is only the first part of the process.
You also need to have an electronic “shopping cart” to handle the purchase transaction.
Paypal offers a “buy now” button system, which is fine if your needs are simple.
At the other end of the scale, are huge, custom shopping carts that can cost tens of thousands of dollars or more. You DON’T need one of these.
I’ll be writing another post on shopping carts soon, but check out these providers of shopping cart services which work well for small business purposes. After you set up your products in the carts, all you need to do is paste a bit of code onto your website for the cart to become operational.
www.e-junkie.com (Yes, I know. Terrible name. But for $5 per month, they provide great services.
www.mals-e.com – Free shopping cart system. Very reliable – I’ve used it on many sites. The Paid version makes it easier to collect your credit card numbers if you have your own merchant account.
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Great information and your site is helpful. Please, i want you to advice me on this, i want to buy micro niche finder software and they only allow payment through paypal and clickbank but whenever i try to my credit card paypal and clickbank will reject my order but i use to use the same credit card that paypal and clickbank is rejecting to buy goods and services on the internet. Please, can you help me to get another credit card processor to buy micro niche finder.
Thanks
Sorry, I can’t help you get another card processor.
Try buying one of those prepaid credit cards. That’s what I use on the web, and I have never had problems with buying through Paypal or anywhere else.