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ACCEPTING CREDIT CARD PAYMENTS. Accepting credit cards on the website is carried out by setting up a merchant account. For this the website owner will need to know the basics involved in the setup process. As the ability to process credit card payments on the website is something that has a great impact on the revenue turnover from the site, we thought about putting the required information about the same in this article. Here are some things that are crucial to your internet business solution setting up of a merchant account to accept credit card payments on your website. The role of the bank: It is the bank which will set up a merchant credit card account for your site; they are normally of two types Visa and Master card merchant accounts. You could choose to use your existing checking account or get a new account set up with your bank for the purpose. There is some amount of risk involved in providing merchant accounts, especially for the internet use, so the bank may be a little careful with the set up. The bank may check your credit worthiness before opening an account for you. Once the bank is convinced internet business solution about you and your business, they will extend full help to set up your merchant account. But there are chances that your bank may not have the facility for an online merchant account, so you may have to look up for a merchant credit card broker, who will do all that is required to set up a merchant account. All this will require some fee to be paid. When on a look out for brokers beware of the shysters spread all around. The brokers will have nothing to do with your online transactions, all they do is simply set up your credit card merchant account with some bank and are there only till the set up is complete. Transaction clearinghouse: The banks normally give transaction clearing house the contracts for processing credit card transactions. These transaction clearing houses are the ones which at the time of an online order checkout will internet business solution check whether the card being used is a valid one and if there is sufficient credit limit on the card to process that transaction. You may not be paying any direct fee to the transaction clearing house but your will have frequent and constant interactions with them. Software and Hardware Gateways: The gateway is what connects your site to the transaction clearing house. There are three types of gateways. The first one being card-swipe machines, which are used to swipe credit cards in physical stores. The second one is desktop software; here the merchant does not use the actual credit card, but uses the credit card details sent by the customer through the phone, mail, email or web-forms. The merchant is required to fill in the credit card and order amount details in to specially designed software and then sends it over to the clearinghouse over the modem. The clearing house will send a report to the merchant on the status of the cards, whether they are in good or bad standing. The merchant then informs the clearing house to accept payments from the good standing cards and will accordingly ship the orders. This type is error prone and time consuming and suitable only for small quantities of orders. The last on the list is the most important for online businesses and it is called real-time gateways for websites. There are several sources under this category, offering fast online checking of credit cards and accepting payments from them. Under this you will find two types, one being those which require you to make a special set up with your internet service provider and the other one being which uses internet business solution connections to a service bureau gateway. These gateways help connect your website to a modem channel to validate the credit card information filled in by the customer, and this all happens within a fraction of a minute. Some shopping carts may not be compatible with such gateways, so before you choose you shopping cart check fort his factor as well. The cost issues: The entire cost of this set up would vary on how you go shopping around for these features. Some market study and analysis can save you some good amount of money. Ideally the bank is the best place to get all this as they are the ones with the most nominal pricing. When getting it done through brokers you will be paying extra money to the broker which can be saved by directly dealing with the bank. But then if you have more important things to do, you could use the services of a merchant credit card broker. The costs involved in processing credit card payments are: Discount rate: These are the charges that the bank will charge for every credit card transaction, the percentage of this varies from 1.5 to 5. For high annual sales the rate normally is dropped to some extent by the bank. Try to get the best deal here as this is a constant and recurring expenditure for you. Minimum monthly processing fee: This is charged by the bank if your website fails to generate some minimum amount of transactions each month. The fee could be from 15 to 40 dollars. Transaction fee: This is either charged by the bank of the payment gateway for any transactions which are below a defined amount as per their policy. The charges are 15 to 30 percent of the transaction amount. Application charges: these are one time charges you have to pay the bank or the broker and these could vary from nothing at all to 500 dollars. The bank or broker may also charge a setup fee ranging from a few dollars to a few hundred dollars. Gateway software: the fee will have to be paid to the bank or the gateway and it may vary from 300 to 1000 dollars. Gateway monthly fee: the internet gateway may charge a monthly fee for validating credit cards and the fee could either be a fixed amount of may be in the form of a percentage of the transaction amount. With all the information provided here you are now ready to go on and open a merchant account to facilitate credit card payments on your website. Other Articles |