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Everyone is an online merchant these days and you can be too.
Taking credit or debit card payments online is not as difficult as you
might think...
Merchant Bank Accounts - huh?
In order to take credit/debit card payments online, you will need an
Internet Merchant Account with your bank.
Even if you already have a merchant account for mail order / telephone
order Card Not Present transactions, you will still need a seperate Internet
Merchant Account for Internet transactions.
In addition, you will need a way of handling the payment process - this means collecting the credit card details yourself and
processing them through a terminal, or getting a third party to securely
process the payment and pass the funds on to you.
So, in short, there are two ways in which you can accept credit cards on your site.
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Using Your Own Merchant Account. To do this, you will
need a bank that will allow you to open a merchant account - check with your bank for more
information on this.
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Using a Third Party Merchant. There
are any number of companies who will willingly process credit cards for
you, but they charge various fees (per month, per payment - it depends
on who you use) and per-sale commissions.
Using your Own Merchant Account
Why would you do this? The initial costs of opening your own
merchant account is usually higher than when you use a
third party merchant. BUT! If you expect to be making a lot
of transactions, this may be the better otpion because the the
transaction fee that you pay the bank or third party merchant for
each sale is much higher when you use a third party as compared to when
using your
own merchant account.
Another reason that you might do this is because you are getting a
lot of credit card details though the post and you need to process them
manually. However - there is a work-around to this. Virtual
Terminals - which we'll come to shortly.
How does this work? Speak to your bank about opening a
merchant account and the possibility of getting a terminal to process
card payments. Processes vary from bank to bank.
If you already have a terminal to process credit card payments, you
can collect the credit card details yourself and process them through
the terminal.
Using a Third Party Merchant or Payment Service Provider
Why would you use a third party merchant? It much
cheaper - sometimes even free - to set up a third party merchant
account. It's also much quicker. On the plus side, the 3rd
party merchant is responsible for all the security issues relating to
the payment as well as privacy issues relating to confidential data, so
you can rest easy. On the down side, the fees and commissions are
usually a lot higher than when you have your own merchant account.
Third
party merchants are the best solution if you want to know that the
security of your customers' details is in good hands. If you just
want to test the water to see how things are,
this is usually a good way to start. It is also convenient in that the
merchant takes care of
everything for you.
How does this work? Once you have
chosen your preferred 3rd party merchant and registered with them, they
normally provide details on how to link your shopping cart to their
site or make one off payments using their service.
When the buyer comes to enter their credit card details, they are taken
to a secure website - usually the 3rd party merchant's site - where the
card and details are taken. Rather than processing the payment yourself, and being responsible
for the security of your customers card details, the Payment
Service Provider (PSP) handles the card details and authorisation.
Payment Service Providers charge a percentage of the transaction
value, or a set monthly fee, in addition to the internet merchant account
charges.
Virtual Terminals - Processing Manual Payments WITHOUT a Terminal
What is a virtual terminal?
It’s an online version of the credit card swipe machines used in
stores. This means that you can manually process credit cards
fromcustomers who order by phone, fax, or mail with credit card. But it
gives you added advantages:
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Increase sales. Expand your business beyond the internet.
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Save money. There’s no need to invest in expensive
equipment as you would need to do if you had your own merchant account
and terminal from the bank.
Why would I use a virtual terminal?
If you want to take
orders from customers who order by phone, fax, or mail with credit card
without going through the expense of having your own merchant account,
this is the solution.
Where To Go For What You Need
Have a chat to your bank and find out what they
offer. They many need information from you regarding your trading
history etc., so be prepared for lots of form filling!
There are lots to choose from! Some of our preferred providers are listed below:
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PayPal is a fast and secure way to get paid online. No set-up or monthly fees - just pay a small amount for each payment received.
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Protx
specialises in processing secure online credit and debit card
transactions, and is one of the UK's most competitive payment service
providers (PSPs).
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Secure ePayments is a secure service for card payment authorisation and settlement from HSBC.
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SECPay is one of the leading independent payment service
providers in Europe; secure, industry compliant, innovative and
respected. They have a solid and well-deserved reputation for service
and value whilst having a very flexible interface.
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WorldPay enables thousands of businesses to accept payments on
the internet, by credit and debit cards - in any language and most
currencies. Worldpay are part of the The Royal Bank of Scotland
Group and are seen a "corporate", high-end provider.
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The NOCHEX online payment system enables businesses and
individuals who are trading online to accept payments from anyone with
a credit or debit card.
Here are some good starting points...
Additional Useful Resources
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