Posted Saturday, November 6, 2004
Take a second and imagine your shopping on a website, find the product you've been looking for, and as you go to the order form to purchase it, you find out that the company doesn't accept payment online. Instead, you must mail a check. If you were like me, you would probably click off the site and search for another company that offers the same products and *does* accept payment online, whether it is by credit card or online check. It doesn't take a super, intelligent person to realize that it is inconvenient, time consuming, and adds on lag time till you get your purchase when you must sit down, write out a check, and mail it. That is why it is extremely important that you offer some type of online payment solution for your e-business.
Accepting credit cards is the most well known way to accept payment on the Internet. Almost everyone has a credit card and by accepting his or hers, it makes customers' ordering process much more convenient and time saving, not to mention it encourages them to purchase from you. Accepting credit cards has become a necessity to the survival of e-businesses.
In order to accept credit cards, you're going to need a merchant account. To obtain one, just do a search on your favorite search engine. You will be provided with a list of many different merchant account providers to choose from. Merchant services contract with several merchant-processing banks that will actually accept and process your business transactions.
For each transaction the bank processes, you will be charged a discount rate, or percentage, of the face value of the amount charged, along with a per transaction fee (usually ranging from $0.20 to $0.30). When you perform your transaction, and receive an authorization number, the charged amount is immediately wire-transferred out of your customers' credit card account into your merchant account. The merchant bank will then discount, or deduct, the percentage rate and per transaction fee, and wire-transfer the balance of the charge into the business checking account of your choice. At the end of the month, you will receive a statement, for your records, so that you can balance your account.
There are three ways to perform transactions:
2. Point of Sale Software
3. Real-Time (Automatic Online Transactions)
Since this article is focusing solely on online payment solutions for your e-business, I will focus on real-time. How real-time works is when your customer is finished shopping and is ready to pay, they simply go to the secure order form page where they type in their credit card information. In a few seconds, a message appears on their screen, showing whether their card was accepted or declined. A few days later, the money will appear in your business checking account. With real-time, you will be provided with an online database containing all of your credit card transactions so you can balance your account at the end of the month. There's a second, and probably more unfamiliar way, to accept payment online, and that is accepting checks by email. Until recently, service bureaus have been responsible for check drafting, but now any business can do it. Federal banking regulations and the Uniform Commercial Code permit this process.
How it works is: a customer submits his checking account information and authorization to draft their account; then the merchant takes the information and enters it into a check printing program on their computer. From that point, the merchant can print it on special check paper (available from the software provider) and take the check "draft" to their bank and deposit it as if the check was mailed directly to them. Not only can a merchant accept checks by email with the program; they can also accept them by phone and fax capabilities, also. This is a great alternate solution to credit cards as you will find some customers who aren't interested in putting their credit card information on your site. If your interested in this type of payment solution many merchant account providers can help you get this solution along with a merchant account for credit card acceptance.
In summary, I would highly recommend obtaining a merchant account for your business. As the Internet continues to grow, more businesses come online and more people decide to make purchases on the Web, it will become essential that your business accept payment online (especially credit cards) in order to survive in today's business world.
I hope this helps in your future marketing decisions.
About the Author
David Bell is Manager, Online Marketing, at (http://www.wspromotion.com/) , a leading Search Engine Optimization services firm and Advertising Agency.