Accepting payments by credit cards through the Internet is the norm today for any business. Especially for small business as it is important for their continued existence.
So finally you have resolved to discover the payment mode presented by the Internet. Accepting payments by credit cards has only proved to boost the income, especially by small time merchants. More and more people today are making their purchases online; so it is a wise decision to make it all the more convenient for the shoppers by letting them make payments by way of credit cards. So now the next big question that arises is how to go about it? There are basically three factors, which are involved in the processing of payments done through credit cards.
Merchant Account – This is an account that is held by the trader with a bank. This account permits you to accept payment via credit cards. The bill is sent to the bank and then the payment is collected from the consumer. Merchant accounts are basically of two types:
Where the card is present- i.e. where there is a retail merchant and POS, which is also known as the Point of Sale merchant.
Where card is not present – Wherein the purchase order is made through mail or telephone. The merchants using Internet for sale are also classified under these. In case of Internet Merchant Accounts payment through credit card is possible. There are three methods of procuring an Internet merchant Account:
Account can be procured by way of a bank
An intermediary like a broker
Any third party
Banks are not very interested in acknowledging businesses, which is in the nascent stage. If you try to procure a merchant account, it will depend on both the size of the business and the nature of the business. Businesses which are in the field of gambling, travel related, entertainment for adults etc wouldn’t even approach a bank as it is certain that the deal will not work out.
This is where the brokers come in and they would be in a position to get you your merchant account by posing as your agent. Just like banks they also tend to stay away from businesses, which seem to have very high risk involved. In such a scenario you would have to produce all the necessary documents such as the total borrowings, net worth, business plan etc.
In case this option of the broker also fails; then merchants would head towards a third party who would get them a merchant account. Third party processors do not charge anything for processing the application and generally also provide certain extra services for free.
They process the application very soon and merchants are able to start trading within 24 hours. Since third party processors would be the last choice of the merchants they would have to pay them a higher fee for each transaction unlike when having one’s own internet merchant account.
Payment Gateway – This is what ensures an absolutely safe and secure transfer of funds received from customers who have made payments through credit cards into the Internet merchant account. This whole procedure is undertaken by the company, which provides the payment gateway. They are the ones who collect all the necessary information about the credit card and also let the customers know if their card transaction has been approved.
These companies usually charge a fee for the service provided by them. Fees tend vary from one company to another. There are three important features of these payment gateways. They are:
Dependability – That is if their servers offer the services 99.9% of the time
Scalability – The ability to handle large volumes of transactions
Safety – The Company will have to take all the necessary security measures as without that customers will not feel safe to use their credit cards on the site. There are various tools available to keep the hackers at bay.
Website – One need to have a website which is very well designed i.e. it is very user friendly or else selling the products on the Internet would be a Herculean task. You can add certain features, which make it an added advantage and a pleasure to shop on your site.