An online business that doesn’t accept credit cards is not an online business at all. If you expect customers to mail a check or money order, you are just an offline business with a Web site. The vast majority of online sales are paid for by credit card. If you want a piece of that action, you need to accept credit cards, too.
Luckily, it’s getting easier and easier to accept credit cards online. From a PayPal account to a full-fledged merchant account, there’s a whole spectrum of services you can use to get in the game.
PayPal is a common payment processing method with more than 98 million members. PayPal allows customers to pay by credit card, instant transfer, EFT, or e-checks. However, the checkout process is long and may not be appealing to some customers. The upside is that you can get signed up and start accepting payments almost instantly.
If you predict a large volume of credit card sales, a merchant account may be your best bet. There are hundreds of companies that offer merchant accounts, and most local banks offer them as well.
Typically, a merchant account provider may ask you to provide a setup fee, gateway fee, and monthly fee for using their service. This is in addition to processing fees, which can range anywhere from 0.3 to 6 percent, depending on the provider. Research all the companies and their offerings to make sure that you’re getting the best deal.
Once you set up your merchant account, you can integrate it into your online shopping cart, which will allow either real-time processing as customers enter their information, or offline processing, where you run the credit cards in batches by yourself. If you have long lead times or make custom products, you’ll probably want to run your transactions offline.
If you can’t qualify for (or don’t want to pay for) your own merchant account, there are still several ways that you can accept credit cards for your store. There’s no shortage of third-party processors available to small businesses in this predicament.
Third-party merchant accounts allow you to process credit cards using their merchant account, usually for a larger percentage of the purchase price. This percentage is usually anywhere from 6 to 15 percent of the total amount. While this may be high, it is helpful for businesses who have no other way to process credit cards.
If you choose a third-party service, their name will appear on your customer’s credit card statement, not your company name. You will need to make sure that you clearly state the name that will appear on their statement to avoid chargebacks and unhappy customers.
ProPay is very similar to a merchant account and allows you to accept Visa, Mastercard, and Discover payments as if you had your own merchant account. With ProPay, you collect your customer information and credit card numbers and process them at the secure ProPay Web site all at once. There is a yearly fee and a small per-transaction processing fee, comparable to a regular merchant account. If you do not have the amount of business to justify expensive minimum amounts with a regular merchant account, this may be a good alternative.
With the wide array of options out there, there is really no excuse not to accept credit cards. Especially because it could make or break your e-business.